Last of the big spenders
I’ve spent the last few weeks talking to Agencies, Media Owners and Clients and there is a general consensus that, although the economic outlook is improving, the future for the Scottish Advertising Industry in its current form is uncertain. Why should this be?
Certainly, we have drawn the short straw in losing out to mergers and centralisations. Additionally, the entrepreneurial businesses that we so lovingly cultivated until acquisition have not been replaced to date.
On the agency side, there is a return in some quarters to the defensive mentality I first encountered 20 years ago when I started at Hall Advertising. People are afraid of what is going to go next rather than looking to see what can be pulled back.
It is true that the cake has been getting smaller yet anyone who has dealings with London will tell you that Scottish Agencies provide value for money and a level of servicing well in excess of what is the norm in London.
So are the bigger clients spending? The accompanying figures compiled by Nielsen Media Research for The Drum across selected Scottish advertisers are a good guide to what’s happening in the market however the usual riders do apply.*
Financial advertising is a sector that’s suffered greatly over the last few years and we have seen a haemorrhaging away of prestigious accounts from Scotland. As the figures show the Royal Bank of Scotland’s spend is down consistently year on year.
Perhaps the projected continuing rise in interest rates will help to fuel this sector. On the negative side, there will be a few nervous glances in the direction of Standard Life as any change in status may well result in a change in the company’s marketing requirements in the longer term.
The Public Sector continues to prosper and there will be extensive Scottish Executive activity now the agency review is out of the way. VisitScotland has turned things round and has been gaining plaudits for its marketing activities recently. However, continued security concerns mean it will have to continue work extremely hard on attracting tourists and there may be pressure on weekend breaks after the disastrous Summer weather this year. With this in mind expenditure should continue to rise.
Meanwhile, NHS Health Scotland has settled into a steady annual expenditure that is well down on the peak of the late ‘90s. Learndirect’s activity continues to grow with a raft of new initiatives. There should be plenty of work for roster agencies here.
The drinks sector is prospering and consequently presents the Public Sector’s alcohol initiatives with a problem as to how to combat a vastly superior marketing spend. There is no doubt that the beer brands see Scotland as a key market for established and new brands and they will fight for market supremacy through sponsorship and guerrilla marketing as well as straightforward above the line work. Hopefully, any forthcoming change of ownership for Glenmorangie will not give ammunition for the doom mongers.
In the soft drinks sector, Irn-Bru is looking to regain the high ground from Coke while Highland Spring has raised its profile considerably on the sponsorship side over the last year. It is difficult to comment about Baxters as the bulk of its activity is in the Winter months but, on recent evidence, there is little to suggest that it will change its annual budget significantly.
In the media field the Scotsman will continue to aggressively market its new tabloid format. The Herald has changed hands, Newsquest shows signs of backing off from SMG’s previous heavy advertising activity, with spend being down year on year during April, May and June. The Daily Record is also increasing its spend in response to the Scottish Sun breathing down its neck. But when will the Sunday Post decide enough is enough and do something about its steadily slide down the circulation scale?
There will be an answer but it will take courage both internally and externally to address it.
Radio is likely to be an interesting battlefield over the coming months with the launch of Saga who will push itself heavily. I imagine Real will respond enthusiastically as it needs to continue to grow and SRH will be keen to defend the AM stations' share of audience.
Other advertisers to keep an eye on will be the SRU who will have a hell of a job marketing their product but in Phil Anderton at the top they have the right man for the job. Setanta will also have to continue to market heavily to make their football coverage work profitably. Robert Wiseman Dairies may now be more visible after the recent turn round in their fortunes.
So how does the Scottish Advertising scene take advantage of this upsurge? Part of its problem may be perception among clients. Some accuse the current agency scene of being very traditional with little differentiation between agency brands. They feel that talented personnel are too thinly spread out between too many agencies. Being a creative industry our first instinct is to split up when we don’t get on with each other but this invariably leads to a fragmented market place. Consequently, Agencies may be successful at servicing SMEs but are found lacking when it comes to providing the appropriate breadth of service for the major blue chip clients. Perhaps there is a need to consolidate our Agency network and modernise our proposition to start encouraging some of this business to return to where it belongs - in Scotland.