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Subject: Re: UKNM: Recession will hit in 1999
From: jim smith
Date: Wed, 16 Dec 1998 10:20:40 GMT

>I have already been told by a client that (media and marketing) costs will
>be kept under tight control in 1999 owing to recessionary pressures. This
>might worry some people but I think it could also be a big break for many in
>this biz.
>If Internet solutions cannot be used to provide more cost-effective service
>to client what can?
>There are going to be lots of new online merchant ventures, new online
>retail brands, etc., that come into the market without any baggage. If done
>properly some of these ventures will be in a strong position to displace
>their established rivals.
>It should also present a good opportunity for online media owners to reduce
>their CPM rates for banner advertising - which will of course increase the
>uptake in the UK.
>Roll on the recession?

On the contrary. The Uk web industry is poised at the same position as the
direct marketing industry was in the late 80s/early 90s. Everyone knew the
post-housing boom recession was coming but the DM agencies thought they
were immune because they were accountable and more cost effective.

The flaw in the reasoning was that while a client can find a good reason to
slash above-the-line expenditure from a paltry 10 million a year to, say,
a measly 6 million - after all, all the marketing textbooks say you have
to keep advertising in a recession or lose market share when the upturn
comes - it becomes incredibly hard to get sign off on even a 100K project
if it has the scary words "new expenditure" attached to it.

What's a more likely scenario is that we'll see yet more contra-deal mania,
with everyone trying to get something out of everyone else for nothing
(here, have some content for a banner), while the investors get screwed.
The sooner the industry matures to the point where people actually pay for
tangible assets and ROI the better. It's still a long way off.

Meanwhile, UK agencies have only just got out of the habit of partying like
the late lamented Evans Hunt Scott.

And what happened to direct marketing? The Americans came and bought it
lock stock and barrel and made it a far duller and much more accountable
place. They even bought the trade association, which takes some chutzpah.

Meanwhile, the freeloaders moved to new media...

I'm all in favour of New Media parties where the booze runs out after an
hour. Make some money first.


jim smith - jimatpsychedelic [dot] org - http://www.psychedelic.org 0961 319040

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  UKNM: Recession will hit in 1999, Ray Taylor

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