George Osborne has declared that Britain is “open for business” and the advertising industry is preparingasupporting case. Adland is pulling clear of recession. We know this not (just) because London’s best restaurants are doing good business with the media set, but because the Advertising Association has just released some triumphal statistics.
The AA has been totting up all the advertising space bought last year and found that UK advertisers spentamighty£15.5 billion promoting brands in 2010. That represents a seven per cent spurt on 2009 and is proof that confidence is returning to British boardrooms.
As the country slipped into recession in 2008, advertising was one of the first industries to reflect the new austerity; marketing budgets were brutally slashed as consumer confidence collapsed.
But – first in, first out – the ad business now seems to be an early indicator of recovery. Although growth is expected to slow in 2011, from 6.9 per cent in 2010 to 2.9 per cent this year, it’s expected to rise again to 5.5 per cent in 2012 on the back of Olympic fever. Recently released annual results in adland reflect this trend.
But there is another reading of the data. Advertising is not a long-term commitment and can be halted at anytime. For nervous companies whoare unconvinced that we’re in the economic clear, advertising is a less risky way of supporting their business than building factories or developing new products.
The advertising recovery could reflect corporate economic fears. Andif big business isn’t making the longer-term structural investments which ensure future growth, then neither the ad industry nor George Osborne can take comfort from the green shoots.