Is That the Light at the End of the Tunnel?

With Some Publications Saying the Economy Is About to Hit Bottom, Ad Age Asked Influential Readers if They Sense an Upturn

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Photo: Edwin Remsberg

NEW YORK ( -- It was as if the news media last week was told to start seeing the sun behind the clouds. The Wall Street Journal and The New York Times began running stories indicating the economic bottom was near. And Hewitt & Associates released a survey that found that 54% of human-resources executives at 518 U.S. companies who account for $4 trillion in annual revenue spy an economic upturn at the end of this year or early next year. Given that there's still a haze hanging over Madison Avenue, Ad Age decided to ask some of the industry's top executives whether they do, indeed, see an end in sight -- or whether the light at the end of the tunnel is an oncoming train.

"We are seeing -- not only in the U.S., but it's starting in the U.S. -- a slight but still modest improvement in the mind of the people we are working with. They are continuing to think that costs should be cut, and they are still working on the idea that they need to be cautious, but we are starting to see some clients saying it's time to get prepared for the upturn and receiving some briefings from some clients asking how they should take maximum advantage of the upturn."
Maurice Levy,
CEO, Publicis Groupe

Rich Barton
"I'm starting to get the excited little butterflies in my stomach, and it's been a while since I've had that. And that's telling me there's light coming through trees, even if we're not out of the woods. What makes me think that? It's a constellation of data points. The first and biggest is itself, which is a leading indicator in interest in housing market. We had 8.8 million unique visitors last month, which is up 71% -- and we don't spend on advertising, so that's all people being interested in mortgages or homes. ...

The overall transaction volumes of home sales aren't necessarily on the rise yet, but in certain markets they are. In fact, markets that fell hardest and first, like Las Vegas and California, are up dramatically year over year. ... Home values have come way down at the same time that mortgage rates have come way down. We've got people who've got good credit getting into 30-year fixed mortgages for less than 5% and that's been going on for three to four weeks. ... I'm a math guy, so I think it signals that the second derivative of the curve has gone positive. That means if you see a curve, the decline is not accelerating. My sense is it's decelerating, or the curve is beginning to bottom out. I don't think we're at bottom, but I think the Hewitt Associates stat that we'll be there at end of year, beginning of next, feels like a reasonable guess."

Rich Barton,
CEO, Zillow

Doug Spong
"Marketers are not out of the woods yet. I can see glimmers of light shining through the trees at the edge of forest, but we're not out in the clearing with the sunshine pouring down on us. Optimism says we make it out of the economic shadows sometime in fourth quarter 2009."
Doug Spong,
president, Carmichael Lynch

Lee Doyle
"We may be turning the corner on the recession but we're going to continue to feel the pain on media budgets into next year, since advertising/media spending lags the economy overall."
Lee Doyle,
North American CEO,
WPP's MediaEdge:cia

Steve Cone
"The bottom is here to stay in many ways, meaning we will rise a bit from where we are right now but not dramatically -- point being the 'go-go' economy of the last 20 years is not coming back.  Certain industries are never coming back to full vigor, such as publishing. ... New-car sales will never come back to where they once were. ...

A few specific niches will have good growth going forward.  And innovation, especially in high tech, data management and biotechnology, will made a few folks very wealthy. Other industries will be fundamentally changed and downsized for good. Publishing will be one of the hardest hit and it's possible that newspapers will completely disappear in a few years. Consumers will not return to their former spending habits and will save more -- good news for investment counselors, bad news for overall economic growth."

Steve Cone,
chief marketing officer,

Mike Jackson
"The downward death spiral [for the auto industry] has ended and that's significant. First-quarter industry sales were worse than the fourth. My prediction is the second quarter will be equal to, if not better, than the first. But it doesn't end the recession. The key is to get some sort of normalization around credit. You can't sell cars without financing."
Mike Jackson,

"While I'd like to think the recession is nearing an end, I still don't see it from a client and prospective client standpoint. Budgets are still being trimmed, and decision making is still taking forever. ... I don't think we'll see any meaningful turnaround until the first quarter of next year."

Steve Cody,
managing partner and co-founder,

Andrew Swinand
"I do think we've turned the corner. I still think there's some bad news to come, but I think we've turned the corner."
Andrew Swinand,
  president-global operations,
Starcom MediaVest Group

MaryLee Sachs
"I don't think we will start to see any significant upside until the first half of next year, at the earliest. While the worst may be over, it is going to take some time for the market to level out, particularly on the employment front. And when the market does start to return, I believe consumers will have adopted some new economic spending habits that will stick for the future, which will require a certain mind-set readjustment in marketing."
MaryLee Sachs,
U.S. chairman-worldwide director marketing communications,
Hill & Knowlton

"Consumerism is alive and well. Americans may be keeping their wallets in reserve, but consumers are out there kicking tires. Traffic in our showrooms increased 8.4% from a year ago, and the leads we collect online and send to dealers jumped by 67%. All of this tells us people are interested in cars but may not be ready to take the plunge. A Federal Reserve report found nearly all the [U.S.] regions are stabilizing. I'd like to be the voice of measured optimism that Americans are poised to buy."

Johan de Nysschen,
Audi of America

Frances Allen
"We're still in this, and I think the economy is too unpredictable right now. It's too early to call 2009, but I will say we've seen some important positive signs. ... I think the recession is here with us a few months longer at least."
Frances Allen,
brand marketing officer,
Dunkin' Donuts

"We are beginning to see an uptick, and companies once again are committing to sponsorships, events. And we are seeing the public-relations business continue to actually be flat year over year, which in essence is an up compared to previous recessions. So our sense is that business is returning to normalization after what appeared to be a panic in December and January. And we are seeing commitments once again and discussions with clients about how to go forward with programs. But having said that, it's still a pretty hazy marketplace."

Harris Diamond,
head of Interpublic's Constituency Management Group

Mark Penn
"I wouldn't call it a bottom, but I think people have begun to realize the world is not ending anytime soon. There is a sense right now that being aggressive in some strategic areas will pay dividends for companies and brands in the medium term.  I am not sure this equates to a bottom, but I do think there's a growing focus on the fact that the recession will end and there will be winners and losers on the other side. Nobody wants to be caught hiding under their desk when things pick up again, and so I think people are starting to realize that the business risk might be beginning to tilt in that direction."
Mark Penn,
CEO, Burson Marsteller

Laura Lang
"I'm cautiously hopeful. We have a couple clients where the results are starting to be a little better than they expected. The interesting question is: What do we look for? And there are a couple things in our business we should be looking for. Right now, most clients are still holding on to budgets. As we start to see people release budgets, make more long-term deals and take on more risk and larger projects, it will be a sign things are starting to come back. Some industries are right now where they may feel they're hitting bottom. There's pent-up demand. And I do believe people are going to spend, [but] they may spend differently."
Laura Lang,
CEO, Digitas

Sarah Fay
"It's tough to call. A lot of people are reacting to minor, incidental things, and we certainly have a lot of those types of clients that are in fairly recession-resistant categories that are still doing well. We predicted that the U.S. market will be down more than 9%, and we're not coming off that prediction. Whether or not there is a light at the end of the tunnel is really hard to say. ... Because we have taken a conservative view on the year, we're prepared for it to be a down year, and anything beyond that will be an upside."
Sarah Fay,
CEO, Aegis Media

"I am not sure we are going up, but it does seem like we have leveled off. I can say there is now more time and discussion about future plans rather than reaction to current pressures."

Doug Checkeris,
CEO-North America,
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