So finally, after two years many out there would like to forget, the good news is starting to arrive north of the border. Certainly this was the message put forward by the IPA last week as it unveiled the findings of new research which named Scotland as the fourth biggest advertising region in the UK.
A brainchild of new Scottish IPA chairman Ian McAteer, the research found that £482m was spent on advertising through Scottish sales teams in 2003, with £89m spent by the top twenty advertisers, a list which consisted of names such as Procter & Gamble, Arnold Clark and the Scottish Executive.
Following the unveiling of the research at the Scottish AGM, The Drum took the opportunity to chat to IPA director general Hamish Pringle about his views on the marketplace.
“The fact that these are major national players, by and large, who are investing in this market is significant in itself.” Pringle comments. “I think what this really says, though, for Scottish IPA agencies is you’ve got to look national. You can’t rely on just being Scottish agencies for Scottish businesses spending money in the Scottish market. I think that’s one of the benefits of having done this research, because it kind of dispells the myth that it’s a parochial business.”
With so many sizeable companies spending considerable amounts of money in Scotland during the past year, the IPA is optimistic about the year ahead. Pringle explains: “ With all the data that we’ve got from things like the Bellweather Report and the Agency Barometer we’ve basically called the end of the recession by the end of the second quarter of this year, and I think all the signs are that is indeed happening. We also have Sir Martin Sorrell, who I think has called the economy pretty accurately. I think he too has called the end of it and his data is upswinging and the recent declaration of results from some of the big groups also supports that. I suspect that the expenditure will be up across the country, and therefore will be up in Scotland too.”
Expenditure by itself may not be enough to bolster the country’s agencies, however, in the face of client procurement. This, says Pringle, is to be the main focus of the IPA going forward.
“I think the challenge for agencies in Scotland, and also the UK, is that it’s not necessarily the case that an increase in expenditure results in increased profitability for agencies. That is because of the enormous pressure on the business from procurement and purchasing. The number one item on the IPA agenda at the moment is that we know historically agencies have tended to give away their intellectual property for free. The whole creative thinking process, that whole body of work, the magic of which often creates incredibly valuable brand ideas, agencies have tended to give away for virtually nothing.
“I think we have been in a bit of a downward spiral on that and I think that there’s increasing recognition amongst the more sophisticated procurement people that procurement can no longer operate on simply reducing the rate year on year on year, because at a certain point you hit bone. The more far-sighted of those people in conversation with ourselves are saying ‘hang on a moment, there must be a different way of dealing with this. Should we not be valuing the intellectual property contribution of agencies in some other way?’ There’s a mutual interest here in sustaining a vibrant agency culture because of course the partnership between clients and agencies creates these brand building ideas and those brands create shareholder value.”
While the agencies Scotland will be in little doubt as to the impact marketing can have on a client’s business, how do they go about increasing confidence with client companies?
“I think the way in which confidence can be increased in Scottish agencies in particular, is by increasing their real and perceived value to clients. There are a number of key things which will achieve that. Firstly, the Scottish Effectiveness Awards are a very powerful symbol of the effectiveness of agencies, and we need to do more work to merchandise the successes of those cases.
“We’ve also just had the first IPA exam. 15 people from Scottish IPA agencies took the exam up here, and that was a great contribution, because on the one hand we can demonstrate through case histories, while on the other hand we have to demonstrate it through the quality of people. For Scottish agencies, if I was them, I would be over-represented in getting these qualifications. I’d want to be able say to clients up here and nationally ‘hey, not only are we well-resourced, down to business and all the rest of it, there’s a higher proportion of people in Scotland that have these qualifications than anywhere else in the country.’ If I was them that’s how I’d be seeking competitive advantage.”
Pringle is upbeat about the Scottish market. With a predicted increased expenditure, a new Scottish chairman and six of the top agencies in Scotland IPA members he would seem to have good reason to be. Hopefully this confidence will be reinforced when the Scottish IPA publishes its figures again, in 2005.
TOP 20 SCOTTISH ADVERTISERS 2003
1. Procter and Gamble -£10.3 million
2. Scottish Executive -£6 million
3. Arnold Clark Motors -£5.9 million
4. British Telecom -£5.5 million
5. COI Communications -£5.5 million
6. DFS Furniture Plc -£4.7 million
7. Lever Faberge Personal Care Ltd -£4.6 million
8. Loreal Golden Ltd -£4.5 million
9. Ford Motor Company Ltd -£4.4 million
10. Nestle -£4 million
11. Renault UK Ltd -£4 million
12. Masterfoods -£4 million
13. Lever Faberge Home Care Ltd -£3.8 million
14. Vauxhall Motors Ltd -£3.7 million
15. Orange Plc -£3.7 million
16. Reckitt Benckiser Ltd-£3.2 million
17. News Intl Newspapers Ltd-£3 million
18. Volkswagen UK Ltd-£2.9 million
19. Toyota (GB) Ltd-£2.9 million
20. Newsquest (Strathclyde) Ltd-£2.6 million