The warning signs became clear from February last year and, when the economic downturn gathered pace, it "caught Ireland so unawares, and so suddenly, it was as though someone pulled the plug out of the socket", according to Graham Taylor, chief executive of independent media agency GT Media.
The situation was worsened by the Government's decision last year to change the annual motor and vehicle registration taxes. Car buyers who would have traditionally bought a car in January delayed spending until the new tax rates came into force on 1 July 2008 - but, by then, the economy was in freefall.
Total advertising spend in the Republic in 2008 was ¤1.577bn, down from ¤1.592bn in 2007. The decline accelerated over the first three months of this year, when press spend dropped 15% compared to Q1 2008 and TV spend fell 32% in the same period.
State broadcaster RTÉ responded to the estimated 30-40% drop in TV airtime prices by introducing a fixed ad rate for the remainder of the year in a bid to stabilise the market and allow advertisers to plan their budgets beyond the short term.
The troubled economy is also threatening the future of digital television. The Government is committed to analogue switch-off in 2012, but as the One Vision consortium responsible for delivering digital terrestrial television includes struggling pay-TV broadcaster Setanta, some believe the future of DTT looks shaky.
However, radio is holding up relatively well, due to cheaper production costs and a trend for a greater number of retail, price-driven ads, as is outdoor, thanks to new formats such as JCDecaux's Metropanels and Metropoles, which Dublin City Council installed in return for JCDecaux supplying a city-centre bicycle scheme.
Meanwhile, online representatives are working on an Internet Advertising Sales House-compliant network to ensure maximum security for brands and hope to introduce a "single, credible currency" for measuring internet advertising.
Ronan O'Loughlin, chief executive of ad network Digitize, says: "A lack of consolidation and unity is the biggest issue facing the [online] industry. While an Irish Internet Advertising Bureau has been explored, it is still some way from being an active entity and, therefore, there is still no real set of standards."
The online industry is also dependent upon the roll-out of the National Broadband Scheme, which - if the Government achieves its target of 100% broadband coverage in the Republic by September 2010 - is ahead of the UK's Digital Britain process.
Sean McCrave, chief executive of the Institute of Advertising Practitioners in Ireland, believes the 100% target is achievable only "if the Government resources the NBS properly". He says: "Broadband is vital to the future of the media industry; we need it on so many different levels. A lack of funding in this area is the single biggest drawback to Ireland's communications landscape."
The Irish Government insists it is on track to meet the targets of the ¤223m scheme and is "monitoring closely the progress being made". If this is the case, Ireland has the opportunity to develop media such as web TV and mobile smart phones and win back the claws its communications industry so desperately needs.
Harriet Dennys is features editor of Media Week
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