Recession’s perfect storm speeds up change in ad industry

December 2, 2009

Why is it that the United States’ advertising as a proportion of marketing services is at its lowest point since 1977, maybe even lower than since the Second World War?

You may have guessed it it’s the recession.

But it will get better, Martin Sorrell, CEO of advertising giant WPP, said.

“The recession is less worse,” Sorrell said, repeating a favourite phrase of late, and while it’s the biggest recession since 1929 it is also “a perfect storm” that has brought forward change. 

“The recession has accelerated structural changes that were already happening,” Sorrell said at the Reuters Global Media Summit.

Will advertising ever go back to where it was? Yes, if you are looking at new media advertising on Kindles and mobile.

Will the United States rebound? Western Europe? Yes, to both.

But future growth will be found elsewhere, Sorrell said.

“The delta in our industry comes from China and the Internet.”

There will be three key drivers, Sorrell predicts: BRIC countries, online and new media and lastly insight into consumer behaviour.

One thing, however, needs to change fundamentally: “The Chinese have got to learn to spend, the Indians have got to learn to spend, we’ve got to learn to save.”    


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