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Claire Beale on Advertising: ‘Advertisers have had a stay of execution’

Spotted: a silver lining. Only sterling silver, but a lining nonetheless. And for once adland has the Government to thank.

We might be hurtling towards the worst recession in adland’s living memory, but there’s a new upside. The Labour party is now promising the ad industry a little TLC.

Not before time. After years as whipping boy in the battle for popular votes, the ad industry has won a reprieve. It turns out that all those pernicious curbs on advertising freedoms – those regulations on advertising naughty food and drink, the threats to car ads or marketing toys – might not be good for the economy. And we need to be good to the economy now, or it will be very bad to us.

No-one at the sharp end of advertising and marketing, will be surprised by the news that restricting ads will have a knock on effect on the health of the country. It’s obvious to anyone without a cause to grind. If brands don’t (or can’t) advertise, sales could be hit, revenue could slide, profits could plummet, jobs could go. Recession might come harder, faster and for longer. And all because advertising has been fingered for something it didn’t really do, like cause obesity or binge drinking. In fact, if you cut advertising because you hold it responsible for deep-rooted social problems like this, you might just end up fuelling an economic crisis that exacerbates them.

The ad industry has long argued that clipping its wings would retard growth. So the continuing threat of a pre-9pm ban on the television advertising of so-called junk food and drink could cost the food and drinks industries as much as £200 million; a similar ban on booze would cost north of £100 million. Both could cost the country at large significantly more. It’s a brave politician that ignores such a risk in the teeth of downturn.

Yet as recently as last month there were fresh threats from the Government that it could impose curbs on junk food advertising in the press, in cinemas and on the radio and web. And the threats came despite a study from the Department of Health, conducted by the media monitors Ebiquity, that showed child-themed advertising across all media had fallen from £103 million in 2003 to £61 million in 2007. Such declines in spend will have affected the manufacturers, and the advertising and media industries alike.

Then last week it emerged the Government had quietly admitted that further restrictions on advertising freedoms could drag down plans to buoy the economy, which will be announced in the Pre-Budget Report later today. It seems that recession has given the Government license to reject demands for tighter ad rules – at least for the moment.

The news is a relief, but the battle is far from won. And Labour’s newfound concern for the ad industry will have won it fresh support because, just as ministers were whispering about the need to protect advertising, the Tories were calling for more money to be pulled from the market.

David Cameron reckons the Government should slash its own ad budgets and use the money to supplement taxes such as council tax. The Central Office of Information, which manages the Government’s ad expenditure, is one of the country’s biggest advertisers and its £400 million ad purse is a lifeblood for agencies and the media. Plans to chop that will have a direct impact on the fortunes of some of the industry’s biggest players. Hopefully the Labour Party can resist such pressure.

So the ad industry is set to be granted a stay of execution, the chance to focus on survival without the imminent threat of tighter controls. But, really, there’s no time to relax; there’s no doubt that this is merely a temporary reprieve.

Top of the agenda must be to find a first-rate replacement for the out-going chief executive of the Advertising Association, Peta Buscombe, who’s off to head the Press Complaints Commission. Buscombe has done a fantastic job fighting advertising’s corner, but the battle’s very far from won.