Ben Shepherd writes: So we all knew Q1 would be a tough one … but how tough has it been so far?
Well – quick disclaimer. I can only really comment from where I sit … and I sit in a reasonably comfortable chair at a desk at a media agency in Melbourne. This doesn’t mean my observations are reflective of the wider market or even anyone else aside me.
The Quarter has been relatively quiet so far. Is this to do with the economy? Who knows … Q1 is always relatively quiet but it feels to me – gut feel – that this is quieter than Q1 2008. Advertisers aren’t scared of what is happening, they are more cautious and looking at spend levels and approach a lot closer. I have had C-Level execs at some clients personally ask or email me questions about media strategies we have presented – this rarely if ever happens – wanting to get rationale behind reasonably small investments. I think this is a ridiculously positive thing.
Liam comments: Um it is the economy! The industry hasnt done enough on measurement which is costing them those brand dollars but make no mistake, economy is number one. Just go ask a Sydney radio station.
Publishers are suffering … and the market isn’t discriminating. I think everyone is taking a hit – big guys, small guys, mid tail etc – and I believe this is more a consequence of a lack of a real point of difference and market offering than purely a soft broader climate. Note to sales people – blanket bcc’ed emails asking for dollars or late briefs isn’t going to win you any new business. Again, this isn’t a bad thing as ultimately soft revenues work their way up the line and the bigger players notice them … and they can put measures in place to improve this – better strategy, better planning, stronger ideas etc
Liam comments: It is still the economy. The sales side is probably a little flabby because online has grown so well, market share is hard to define and frankly we just havent been pushed too hard. But to repeat myself, anybody can look at the weaknesses of the industry but fundamentally it is the economy.
There is a lot of competition. So things might be a little, ahem, soft … but there’s still a lot of mouths looking to be fed. There are more assertive sells from mobile people, in game, search, portals, mid tail, ad networks … the phone is ringing a lot more than it was last year. In terms of ‘pants dropping’ (the term used by most to indicate when a supplier dramatically reduces their asking price to try and get close to target) it’s already started happening … problem is it’s too late as Q1 is pretty much closed.
Not much is new … yet … The problem is when there’s more competition, it makes it harder to work out the difference between all the options. What helps with that is doing things that make you stand out – new product, new approach … but so far there’s not a whole lot of new. However – there are a lot of ‘relaunches’ planned for Feb/March which hopefully can deliver something for user and advertiser. My advise … do LESS but do it BETTER.
Better questions from clients and more involvement … Clients are expecting a lot from their agency and rightly so. Accountability, rationale and diligence. Yeah … all obvious things but often ignored. A wise guy who works at a small creative agency (who are bloody awesome) said he loved recessions … as it shook up the industry and made clients look for the best partners. Doing something because it seems like a good idea, or because some US strategy guy put it on the a slideshare preso you ripped off is starting to be seen for what it is – empty and derivative. Generating a reputation or a business by trying to deflect attention away from “boring” things like ROI and results and playing the social media/everything has changed/sky is falling/traditional media is dead/consumers are in control card seems to be on the up, but I question who is listening outside of those who pedal the hype.
Liam comments: I am not convinced these last two do not contradict each other. The desire for new does not sit well with better questions. New is only good in a business if it improves profitability. Lots of new things feels like a distraction from the business we are in.
Optimism is high for the rest of the year … Most believe things will get better. Not sure if that is wishful thinking or actually backed up by data … but generally most people feel it will get better, and I am one of them.
Liam comments: Possible but unlikely, we are entering the recession, not exiting it. Things are going to get much worse.