Sir Martin Sorrell predicts adland is in for a coronavirus-led bumpy ride for at least the next six months but sees a healthy rebound in the last quarter of 2020.
Speaking to UK industry title PR Week, the 75-year-old S4 boss predicted a recession over the coming months but “we’ll see a sharp recovery in Q4; brands will let rip. This will be a V-shaped recession”.
He said that he expected spending to be down across the board, however, socially beneficial or purpose-driven marketing should actually improve over the coming months.
Sorrell also dismissed the idea that brands could simply spend their way out of trouble.
“What we will see is an acceleration of what packaged-goods firms were already doing. They will cut budgets and shift to digital. We realise that people are at home talking to each other via digital technology. They are also using home deliveries as never before.
“Yes, we saw clients briefly put big ecommerce projects on ice, but they were deemed mission-critical, so they have already come back.”
He added: “This is not 2008, it’s not 9/11, it’s not the 199/92 downturn. It’s not even the 1970’s oil crisis – this feels like wartime.”
Meanwhile, in an opinion piece, he penned for the UK’s Financial News earlier this week, Sorrell said that the global pandemic had meant that “uncertainty had become a valid excuse” for many businesses.
“Historically, uncertainty or lack of visibility has been used to cover up problems. This time around, no one knows with any degree of certainty what will happen,” he wrote.
Again, he predicted a quick, vicious recession with a fast rebound.
“After severe falls in GDP in the second quarter of 2020 there will be stabilisation starting in the third quarter and a sharp upward correction in the fourth quarter — all in real markets, with the stock markets moving earlier. In essence, it will be an event-driven recession, not structural or cyclical, despite the long bull market since 2008, which to my mind makes it cyclical, as well as event-driven.”
Sorrell added: “Whatever the shape of the recession, I am sure that consumer, enterprise and media patterns of demand will not change, but only accelerate, as a result of this recession. All the trends since the flowering of the internet at the turn of the millennium will accelerate.
“The standard advertising or marketing mantra of spending to reposition your brands coming out of recession, will be refined to switching spend from traditional to digital media, as consumers, media owners and enterprises accelerate their business or digital transformation,” Sorrell wrote.