LONDON: Sir Martin Sorrell, ceo of WPP Group, the world's biggest marketing services conglomerate by revenue, believes "the mood in the last couple of months has got better," but also argues this has not yet "translated into increased spending or willingness to commit" among advertisers.
While there is considerable evidence that brands which maintain their adspend levels during economic slowdowns typically benefit from pursuing such a strategy, this is only one of a number of approaches that are typically adopted during such periods.
Sorrell famously described the last recession as "bath-shaped", and has similarly stated that the current downturn will be "L-shaped".
This means that 2009 is effectively a "write-off", while the first half of 2010 will usher in a "recovery of sorts", although WPP's chief executive expects the effects of the financial crisis to be much more long-term.
Despite this, Sorrell stated that the "mood" among marketers and investors has improved slightly, partly because the widely-predicted "Armageddon doesn't seem to have happened."
Many American chief executive officers and chief marketing officers, he suggested, also now "feel more confident or better than, say, two or three months ago."
Indeed, some observers in the US have suggested that the situation there will improve in the final quarter of 2009 and early 2010.
As such, Sorrell stated that, at best, the current crisis might take the form of "an italic L – that is, flipping up."
He also warned, however, that any renewed optimism "isn't reflected in the real world," and it was "too early to call" if this renewed optimism was "due to restocking or genuine green shoots."
By contrast, the situation does seem to be improving in China, where many major multinational companies are heightening their activity, meaning the country will be a key focus for WPP going forward.
Consumer insight, which is also becoming increasingly important to advertisers in the current climate, will also be among the holding group's other areas of focus.
Data sourced from Reuters; additional content by WARC staff