Claire Beale On Advertising: Calling all colleagues: adopt brace position

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The Independent Online

If you work in advertising or the media and you haven't had the email yet, it's only a matter of time. It's the email that orders collective belt-tightening, a brake on all recruitment, perhaps mandatory redundancies and it's infiltrating in-boxes around town. Adopt the brace position.

Last week the email arrived at WPP. Sent by WPP HQ to all agencies within the group (JWT, Ogilvy, Grey, MindShare: some of the biggest players in British advertising) it announced an immediate and apparently unconditional freeze on all staff hirings until further notice.

Prompted by the deepening economic crisis, the email apparently suggested that the group's headcount growth over the last twelve months had significantly outstripped revenue growth. So WPP-ers cannot replace departing staff or create new positions, until at least February next year. And any job offers that have been made but not yet accepted must be withdrawn. No exceptions.

It's a harsh but prudent move, coming from what is quite possibly the tightest and most efficiently run of the global communications companies. And you can bet WPP is ahead of the curve when responding to market conditions. So consider this a stark warning of what's to come.

Quite where it leaves WPP's biggest UK creative agency, JWT, I can't fathom. The agency's chief executive Alison Burns is heading back to the US soon and the hunt is on for her replacement. The agency desperately needs a strong leader to build on its fragile momentum and it would betray staff and clients to delay the appointment of a new chief until next spring. Will WPP override its own no-hiring diktate for such a significant post? We wait to see.

Meanwhile, the WPP email preceded a bumpy ride for shares of the big marketing services companies. Last week WPP's rival, Omnicom, announced that its retail and automotive clients showed tangible signs of curbing or cancelling marketing spend. Trading of marcoms shares responded appropriately and both Omnicom and WPP share prices took a tumble. Confidence in the sector is leaching away. The analysts at Collins Stewart followed up by downgrading their profit forecast for WPP by 15 per cent for next year and by 32 per cent in 2010.

But it's perhaps among the media owners where the implications of recession are being most sharply felt. Barely a day passes without more gloomy headlines for the people selling advertising spots and space. Many job losses are coming as the decline in advertising revenues forces publishing groups and broadcasters into obvious and overdue efficiencies. But the bloodletting is no less painful for being sensible.

As many as 60 per cent of the 175 sales staff at Associated Newspapers are expected to be squeezed out as the groups sales operations come together in search of efficiencies. Global Radio, which owns Classic FM and Capital, is set to reduce headcount in its advertising sales department by about a third, News International has already made 10 redundancies by merging digital ad sales, and Channel 4 is following suit, culling digital sales posts.

Compared to the advertising sales sector, creative and media agencies have so far avoided significant sweeps of redundancy. But that may yet come. Consensus among adland chiefs who have lived through the recession of the early 90s and the burst of the dotcom bubble at the tail end of the decade suggests difficult decisions should be made before they actually become imperative.

While recession laps at the industry's toes, now is the time to cut jobs and unnecessary overheads. With banking finance having all but disappeared, the industry's experts are counselling the conservation of cash and a focus on slimlining the workforce. But a recession is also a time of opportunity. As marketers struggle to prove to their boards that they are making significant strategic changes to combat downturn, ad agencies that can position themselves as instruments of change can thrive. And the ad industry has never been more in need of change.

Best in show: Wall's (BMB)

*When the credit crunch is biting, ads that make us smile for things we can actually still afford are particularly welcome. In that spirit, Beattie McGuinness Bungay has unleashed a series of vignettes telling us how Wall's uses only the two best bits of pork to make its sausages.

So we see a proud dad cradling his newborn son. Quick cut to 18-odd years later and the lumbering youth is packing up and flying the nest. The two best bits, you see. I'm still none the wiser what the two best bits of a pig are but this is a very sweet and beautifully campaignable idea.