The gloom enveloping Britain’s ad and media industry shows no sign of letting up, with forecasts from analyst Plimsoll Publishing that some 2,000 jobs will be cut in the sector over the next year.
The problem, says the 2002 Plimsoll Portfolio report, is that the cost of paying advertising staff has risen faster over the last three years than the industry can withstand. Salaries have soared 41%, while sales revenue has on average increased by only 27%
Barely half of ad agencies are profitable, while one-fifth post losses. With salary increases anticipated at 5% over the next twelve months, the report concludes that there will be layoffs at 59% of companies in the coming year.
In addition, the survey slams managers for not taking action sooner, warning that they should address problems more swiftly in order to minimise losses.
Said Plimsoll senior analyst David Pattison: “There is little doubt that managers will use the current economic and market conditions to make decisions that, frankly, they should have made eighteen months ago.”
News source: Media Week (UK)