Woodford: cautious optimism
Advertising agencies are beginning to feel more upbeat about future economic prospects, following a new communications industry report that says business confidence is growing.
"There are grounds for cautious optimism," Stephen Woodford, President of the Institute of Practitioners in Advertising, told Media Week on Monday (Oct 6).
His outlook was shared by the IPA's Director General Hamish Pringle who nevertheless warned that the economic recovery was still fragile and could easily be upset by a major terrorist attack.
Pringle added that it would be interesting to see if the sense of optimism was reflected in the forthcoming Bellwether Report on the views of clients to be published later this month (Oct).
Referring to the last Bellwether Report which came out in June this year, he said: "That indicated continuing economic uncertainty during the second quarter."
Both men were speaking three days after Friday's (Oct 3) publication of the Communications Agencies Federation (CAF) Agency Barometer survey.
A total of 170 agencies represented by three organizations - The IPA, the MCCA (Marketing Communications Association), and the PRCA (Public Relations Consultants Association) - were questioned in August.
Sixty three per cent of the agencies surveyed said they were more optimistic for their own agency than they had been three months ago.
Only 11 per cent said they were less optimistic.
But the same report revealed that it was in the advertising sector that the net declines in budget commitment were greatest.
CAF Chairman Graham Lancaster said: "Advertising agencies are slowest to bounce back, but even here over half now say that client spending has increased marginally or stayed the same. All our sectors report a busy time on new business."
Woodford, of the WCRS agency, said: "What we are seeing is that although that weakness in budget-setting is still being reflected by the bigger agencies, people are now seeing some signs of recovery. And, in a sense, if people start to feel optimistic, things will turn up. It's a self-fulfilling prophecy."
Pringle said the prospect of increased activity for advertising agencies was being boosted by signs that the American economy was strengthening.
He said: "I would say it is a question of 'cautious optimism' because there is the USA presidential election next year. It will also be Olympic Year - and traditionally that has always primed the pump. But it does remain very fragile. A major terrorist incident in central London, for example, could make a huge impact."