Direct Marketing News spoke with Jonathan Barnard, ZenithOptimedia‘s head of forecasting, about the ad industry’s progress in recovering from the “Great Recession.” ?
Q: Most holding companies and independent agencies are reporting revenue gains. Are they seeing significant growth or only a “dead cat bounce” due to a poor 2009??
A: Last year wasn’t actually that bad. It was a subpar year, not as good a year as advertising normally has, but it had about 5.5% global growth last year. Any growth on top of that has nothing to do with comparisons to a weak year-on-year point. The one thing I would say, though, is that we are still recovering from the very bad year of 2009, and of course 2008. We have still not recovered from the recession. Even by the end of this year, we are unlikely to be back to 2007 levels. ?
Q: How has the US fared versus the rest of the world??
A: US ad spending has been steadily improving, which is good, and it has basically caught up with Western Europe. Last year, Western Europe was basically growing at about twice the rate of the US, but the gap is narrowing quickly and it will be close to zero by next year, and that is very promising. It’s surprising because there has not been that much difference in growth rates, economically, and the US did slightly worse through the downturn, so you would think there would be more of a big bounce back. However, it’s still the case that the US is stuck in the slow-growth category, alongside Western Europe and Japan. ?
Q: How is marketing evolving as it continues to recover from the recession??
A: It is coming out more slowly than you would expect, similar to the general economic growth rates. Also, there has been a continued shift in where the money is being spent. If you focus mainly on bottom-line advertising, for a long time we saw a shift from newspapers and magazines to Internet advertising. That has continued, and in fact has been exacerbated throughout the recession, because of the greater accountability that Internet advertising has. Using it, marketers can provide a measurable return to the advertisers who are working with the medium.?
When times are rough, what you absolutely need is a clear and measurable return. Another thing that has happened is a shift of spending towards TV advertising. That has partly to do with the consumption of TV, which has gone up. It also has to do with tough economic times — people tend to spend more time at home during a recession — and also with technology.?
Q: Is there more acquisition or retention marketing happening right now? How has that shifted throughout the recovery??
A: Anecdotally speaking, I would say there is more acquisition marketing going on over the last six to nine months. As advertisers have felt more confident in the economic prospects, they’ve given more of their budgets to acquiring new customers rather than maintaining their market share through existing customers.
