Last December, ad executives and industry watchers talked hopefully about a "soft landing." At the time, Universal McCann's Bob Coen projected 5.8% growth for U.S. ad spending this year. John Perriss, chairman of Zenith Media, also predicted growth for 2001, saying: "If the U.S. catches a cold, then the rest of the world catches the flu. The U.S. shows no signs of having a cold."
They were wrong, we now know.
Last week, Mr. Coen said 2001 spending will drop 4.1%. For 2002, Mr. Coen sees a small spending increase while Mr. Perriss expects a small drop.
A significant advertising turnaround is unlikely till 2003. But the ad industry's embrace of cautious pessimism is as misplaced as last year's optimism. There's fair reason to believe the 2002 market won't be markedly different from this rotten year, but bumping along till we hit bottom is manageable. Next year's spending comparisons also will be easier to swallow; bust vs. bust won't look as bad as bust vs. boom. And, in contrast to December 2000, most companies now have staffing in line to face a weak year. That's also manageable. The weakest rivals are gone; that makes things more manageable for those in the game for the long haul. This year showed even unfathomable tragedy is somehow manageable; life is going on.
One year ago, WPP Group's Martin Sorrell said: "There is no reason for anybody to cut their throats-at least not yet." Last week, Mr. Sorrell said he sees no indication that the downturn is bottoming out, adding: "I don't see the rays of sunshine." But he vows WPP will keep growing.
The year 2001 probably will see the biggest year-over-year U.S. ad-spending decline since the Great Depression. Next year could mark the first two-year decline on record. But the painful restaging that took place this year will make next year easier to navigate. Everyone will have a chance to get positioned for a rebound. And no one will be blindsided by 2002. That's not all bad.