Signs of economic recovery, but no medals just yet
WE ARE now experiencing what Mark Carney, the governor of the Bank of England, has called “one of the strongest recoveries in the advanced world”.
Almost all of our key indicators are pointing in the right direction. But that doesn’t mean we’ve gone from limping runner-up to gleaming medallist.
The latest Bellwether report from the marketing industry body, the IPA, showed that Scottish firms are responding to improving economic growth by upping marketing budgets. As marketing spend is usually discretionary, it can be easily and quickly cut or raised in response to a changing business environment. The industry has frequently been cited as a key indicator for wider economic conditions.
The report showed that the growth achieved in the final quarter of 2013 reached the second highest level since the study began in 2000. We’ve seen a year-on-year 30 per cent increase in new business. All of these new clients believe now is the time to be investing for growth.
From our perspective, the increase in marketing spend appears to be predominantly led by financial services, including many sub-sectors such as private banking, wealth management, investment management, mutual assurance and specialist insurance – in essence, a resurgent Scottish financial services sector.
Alongside this, we’re feeling the economic benefit of the Commonwealth Games, working with organisations such as Toshiba Tec activating a UK-wide campaign around its sponsorship position with Glasgow 2014.
While the outlook is positive, the recession has changed behaviours. Budgets, despite increasing, remain closely guarded. Our industry must be able to demonstrate the value that we create for organisations by being able to credibly measure the impact that work has on their most valuable asset – their brand and its reputation.
Finally, digital revenues have increased dramatically. This is because many brands are continuing to expand and invest in their digital footprint. This investment tends to be part of an integrated approach, meaning that we are not designing brands but we are designing businesses through strategy, creativity and technology.
• Richard Simpson is a director at Edinburgh-based creative agency Tayburn