What can Bellwether actually tell us?
July 13th, 2010 by Lloyd Gofton
As you may have seen on Monday, a one-off supplement to commemorate the 10th anniversary of the IPA BDO Bellwether Report, was released this week.
This of course includes comment from agency sage, and Über marketing/ad sector financial commentator Sir Martin Sorrell, WPP chief executive.
His quotes include the fairly obvious: ‘The overall share of traditional areas such as television, radio, newspapers, magazines, outdoor and cinema has declined - in favour of consumer insight, PR and public affairs, branding and identity, healthcare, and specialist communications (which embraces direct, interactive and internet).’
Plus a reflection on the move toward integration: ‘Clients want more for the same money and that often means integrated solutions. Different specialities must be brought to bear coherently on a campaign. More and more clients are asking us to put together bespoke teams from across WPP, drawing the best talent from the group’s many renowned company brands.’
So, while it’s good to have these points backed up by the figures, I don’t think this is entirely new news for most of us in the marketing agency sector.
In fact, I would go as far to say that the positive and negative elements of the Bellwether report focus on very similar issues, simply because it is based on financials. This means the conclusions are accurate and trustworthy, but at the same time it also means that the conclusions are retrospective, rather than forward facing.
However, it’s still a good indicator, so what do the figures say? Well, according to PR Week; the ‘all other’ category, which includes PR and events, recorded a -7.9% downward revision in the second quarter of 2010. This revision was a significant drop from -3.5% in Q1.
‘Budgets for nearly all main Bellwether categories were revised down in Q2, with direct marketing and internet the exceptions. The findings suggest that the UK economy is now entering a phase of slower growth.’
To be fair, this was probably expected with the emergency budget announced in the UK recently, combined with a bit or realism hitting the sector as the majority realise we’re very far from being out of the financial crisis that has dogged the industry for two years. It’s also true that the actions of our Government will affect the recovery, or lack of it, but what of the effects we’re experiencing on the ground?
Although it’s a sweeping generalisation, new business across the board seems to be on the up (at least according to the PR and social agencies that I speak to). We all seem to be getting many more enquires, and as far as I can tell, the conversion of these opportunities is good.
Furthermore, of the agency people I’ve spoken to, many point to the fact that there seems to be a lot of agency reviews taking place, which may not always be positive for the incumbent, but suggests clients are either looking for more from their budget, or perhaps something different.
However, although those agencies that I’ve spoken to are generally positive, they have also caveated their excitement with a sense of trepidation about the future in terms of the economy.
So where to go from here? Well, as Sorrell says, we’re in a period of change, a change that has been very necessary for the agency sector for years. As I’ve said many times before on this blog, the change has been accelerated by the ongoing financial challenges, which has made it more painful, but necessary all the same.
In the long term, I believe the focus on integration of services and a more open and conversational approach to communication is certainly the way forward. We have been held back far too long by the rigid agency specialist approach, combined with blind broadcasting of messages.
This should also bring the era of agencies marking their territory and defending it fiercely to an end, as this approach simply isn’t relevant in a multi-skilled environment, where just saying ‘that’s our turf’ doesn’t actually mean anything. The focus has switched to well researched strategies, the ability to deliver and proven experience, whichever sector you originally came from.
For further analysis analysis of the report, check out Mark Sweney’s piece on the Guardian.
Tags: agency, Bellwether report, Integration, marketing, PR
