The unprecedented trend has seen adspend slump although the Australian economy is still in robust shape - interest rates are low, employment is rising and the housing sector is strong.
Media planning and anaylsis consultancy Fusion Strategy has labelled it
an "advertising recession". It said that advertising fell last year by
5.92 per cent to A$7.77 billion (about US $4 billion) and
it forecast that this year the figure would fall again by 2.38 per cent
to $7.59 billion.
Fusion Strategy principal, Steve Allen, said growth in media revenues
had always been "a point or two above gross domestic product
growth.
"We have never had advertising in a recession when the economy is
growing. It's only been when the economy was in recession: in 1991,
advertising (expenditure) fell more than the economy."
"(Various studies) have tried to find a linkage between advertising
growth and economic growth, and in the end they couldn't find a linkage
- it defies logic."
The adspend downturn came amid a survey which shows that the ad industry is optimistic about its prospects for the coming year. Executive
recruitment company TMP Worldwide's quarterly Job Index found that
agencies are keen to make new hires, with 31.3 per cent saying they
would be hiring staff next quarter and just eight per cent planning to
reduce staffing levels.
But local agencies say the results are off the mark. Hamish McLennan,
national managing director of George Patterson Bates, is expecting the
industry to remain the same until the third quarter. He is not planning
to hire new staff until that time, saying the agency would make do with
what it's got.
An employee from Singleton Ogilvy & Mather added: "From what we know most agencies are putting staff off everywhere and I have had more people call me for jobs over the past few months than ever before, he said.
