Back in March it looked as though advertising was due for a sustained boom period, bouncing back from the depths of 2009 when (along with most of the world’s other industries) it was mired in the worst recession for 30 years.
All the big marcoms companies (WPP, Omnicom, Publicis Groupe et al) were reporting organic growth of between six and nine per cent as advertisers began to spend the month they had hoarded assiduously through the recession.
The so-called BRIC countries (Brazil, Russia, India and, especially, China) were booming away regardless, their economies growing by up to ten per cent annually and ad spend by considerably more than that.
But it ain’t so any more. Worldwide inflation, especially commodity prices ranging from food to oil, have soared as more money chases what now seem like scarce resources and China, in particular, is putting on the brakes.
The Eurozone is currently bedevilled by the economy of tiny Greece (only 2.5 per cent of Eurozone output) with fears that bigger economies like Spain and Italy will catch the cold that has afflicted Greece, Ireland and Portugal. If they do some big global banks will have to take a haircut, exactly what led to the 2009 post-Lehman Brothers debacle.
The recovery in the US has stalled, not helped by the continuing stand-off between Congress and the White House over raising the US’s debt ceiling. If Congress won’t agree the mighty US may need to default on its debts.
The UK, which performed remarkably strongly in ad terms last year and which still accounts for a disproportionately large share of worldwide advertising, is facing the real danger of a double dip recession as a combination of inflation, falling retail sales and government cutbacks stifle growth at birth.
So if the BRICs and WPP CEO Sir Martin Sorrell’s ‘next eleven’ start to slide those cocktails and canapes in Cannes are going to look even more expensive.
Nearly 2,000 of the 9,000 delegates expected at the Cannes Lions Festival of Creativity (these days it includes gongs for everything from media to PR as well as the cinema and TV films it started with) will be from about 450 client organisations (at a cost of more than €2,000 a delegate pass).
They’ll be taking part in various confabs (News Corporation’s James Murdoch and Dreamworks’ Jeffrey Katzenberg are among the attendees) and, very likely, dispensing buckets of cold water along with the cold drinks.
There’ll be plenty of fun and games alongside the awards of course. But it won’t be quite as carefree as it looked likely to be just a few weeks ago.