Two cheers for advertising agencies

Mixed messages for the advertising industry in two influential reports out today.

First the good news. Recession is definitely behind us and advertising spend poised for significant growth, according to the latest IPA/BDO Bellwether report. For the first time in two-and-a-half years, a majority of UK advertisers are predicting a return to growth in their advertising budgets. That’s not confined to digital advertising, either. Traditional media is set for a boost, although sales promotion and direct marketing continue to trail. At last, a mentality of cost-reduction seems to have given way to the notion of top-line growth.

More chilling – for ad agencies at least – is the message from the CMO Council’s annual State of Marketing survey, which sifts the opinions of 5000 senior marketers who control a collective budget of over $150bn. Apparently, clients are very disillusioned with traditional agencies’ failure to get to grips with online, viral and mobile marketing skills. So much so that they are now concentrating on bringing data capture in house, or using more specialised agencies. In the words of Donovan Neale-May, executive director of the CMO Council: “You’ve got to look at the difference between the ability to create nifty interactive campaigns and actually having customer data, which underpins everything today…Whereas before the agencies had a huge amount of influence, now the companies are going to have the insights about the effectiveness of these campaigns.” He goes on to note that the likes of Infosys, Deloitte and Accenture are moving into the gap.

So, top-line growth, but not for those with an analogue mindset.