If the health of the advertiser business is a bellwether for the state of the economy, then listen up to the world’s largest media investment group.
In this video interview with Beet.TV, GroupM chairman Irwin Gotlieb sounds a worrying call.
“The troubling aspect of it is that we see more and more clients who are businesses are in distress, many of the businesses that we’re pitching are in distress,” Gotlieb says.
“You’ve got quite a number of businesses that have shrunk over the last few years. Businesses that used to be very, very stable with a long legacy of growth (are) suddenly losing market share, and this is happening at a time when you have millennials a little bit questioning brands and the value of brands, when you have the Amazons of the world minimizing the value of branding in some respects, it creates a complicated proposition.”
Zenith lowered its latest prediction for global advertising expenditure growth in 2018, to 4.1 percent to reach $578 billion by the end of the year, revising North America growth down from 2.6% to 3.4%.
In recent months, we have seen car sales, another economic barometer, continue to slow in the UK and, in the US, decline for the first year since the Great Recession.
But Gotlieb blames brands for cutting their way out of their challenges, and says marketing is a way out of the malaise.
“Many clients out there have been very, very short term in their approach and, with a focus on saving money, remove the top of the funnel layer, and refined their targets, and forgot to water the tree, right?,” he says.
“Just cutting marketing budgets is not the path to a solution. (If) you cut your marketing budget today, and you lose a couple of share points as a consequence, it makes it that much harder to restore the marketing budget that you need for growth a year from now, because your business starts off inherently smaller.”
This video was produced by Beet.TV in Las Vegas at CES 2018. Please visit this page for more coverage.