’Do you actually know anyone who’s lost their job?’ asked someone
recently during a conversation about whether we’re marketing our way
into recession. Well the answer is yes, we at Marketing do know some of
the people who have lost their jobs at CIA Medianetwork and Saatchi &
Saatchi, which both announced staff cuts this week.
Twenty jobs have gone at Saatchis and around 26 at CIA. Many of those
axed were regarded as bright, hard-working, and assets to the agencies.
But CIA Medianetwork has lost serious billings in the past few months as
clients such as Lloyds TSB and Somerfield have gone.
Similarly, Saatchis lost Camelot, with an annual pounds 20m spend, and
last week suffered as Procter & Gamble centralised its pounds 150m
television buying into Leo Burnett.
So do these job losses have anything to do with the threat of
The honest answer appears to be no, not much at all. Both agencies are
making what they consider to be a necessary, if undesirable, response to
their own client situations. These lost accounts have gone to new
agencies, where hopefully they will generate new jobs. Marketers, like
everyone else in the business, should avoid confusing the fortunes of
individual companies with any general economic trends.
That was also the message from one of the world’s biggest marketing
services companies, WPP. Its indomitable chief executive, Martin
Sorrell, told analysts that third-quarter revenues were up 11% at pounds
Sorrell’s WPP had been hit by a shares slump once, back in the early
90s, and like other companies in the marketing and media sector has seen
stocks fall again in recent months.
But his message was that the news for the industry is not all grim:
’Lower inflation means less pricing power and so clients are more
concerned about differentiating their brands through marketing, which is
good for us.’
This is not to underestimate the economic problems we are now
Business confidence is down, the Royal Institute of Chartered Surveyors
this week also reported that the housing market was being hit by
consumer pessimism about the economy and job prospects. But we can all
draw lessons from Sorrell and WPP. After the last recession Sorrell held
his nerve, he focused on his business and convinced his creditors that
the marketing services business was worth investing in.
We can’t stick our heads in the sand and pretend global economic
problems won’t impact on the UK, but we should not accept a recession as
inevitable, or confuse the problems of individual companies with a wider
trend for those in marketing services.