Amid the mounting doom and gloom, ad sector is showing signs of recovery
IT'S been a bad few days for the Irish economy as we've been treated to a barrage of headlines about Bank of Scotland (Ireland) pulling out of the country, NAMA haircuts, the stock exchange falling dramatically and the ongoing worries that the world economy is a long way from being deemed healthy again.
All in all, it hasn't been a nice time for any business, except for an accounting firm that specialises in insolvencies, perhaps.
That might explain why this week's results from WPP, the world's largest advertising firm, were hailed by many people in the business despite missing some analysts' expectations. The 36pc growth in profit was seen as a shot in the arm to the industry, despite the state of the wider economy.
"We cannot remember a more speedy recovery or a turnaround of a region," said chief executive Martin Sorrell when referring to the US market.
Closer to home, the parent company of the ad agency Mediaworks just published its accounts for 2009. Despite what the layman might have expected, Addax Advertising posted a healthy profit of just under €300,000.
Most agencies posted a profit in 2008 but few accounts are available for 2009 -- the non-Plcs have until October to post accounts for last year. Across the board, the advertising sector in Ireland seems to be in reasonable health.
Apart from McConnells, the mass insolvencies that some were expecting in the sector have thankfully not come to pass.
Mediaworks MD Paul Moran says that despite the recession, the advertising business in Ireland is now in something of a recovery mode, albeit a very fragile one. "The last couple of years have been difficult ones in advertising -- I don't think anyone would disagree with that -- but we have definitely seen increased confidence in the sector in the last number of months as companies have begun to increase their advertising spend again.
"Businesses now seem to be more willing to invest in advertising and marketing as part of a long-term strategy. They are asking themselves 'how will this affect my business in three years' time' and not looking at the short term so much which was the case last year. The 'fight for survival' mindset that we might have seen last year seems to have passed.
"Online advertising has definitely seen a big uptick but clients are investing much more generally in their brands now. Companies are looking at how to drive footfall.
"It's a very tentative recovery, but a recovery nonetheless."