What part will digital play in a downturn?

Here is a gloomy first slide of a presentation by Roger Martin-Fagg, Client Director Henley Management College, on the subject The UK Economy: Soft landing, Recession or Full-blown Depression? He gave the keynote address at the recent Summer Eventia, the events industry annual event, on 6-8 July. His point – that the price of oil has a very direct impact on the world’s economies.

The good news, and my second slide, is that the only increase in marketing spend during Q1 in the UK has been digital. The figures come from the speech of Neil Jones, from Avantgarde, on the subject Economic Impact on Marketing Spend: The Bellwether Report and its Implications for Experiential Activity, also at the same event.

But the apparent robustness of digital in a declining market will not fill all the holes. Another of Jones’ slides points to the proportion of the total spend that digital played across marketing in 2007 which was no more thatn 8.7 per cent.

Meanwhile, this week it became clear in an article in yesterday’s Barron’s Tech Trader Daily that web companies themselves were not immune from the economy with companies such as Google, Valueclick and all beginning to report declining earnings. So the question is this. As pure web companies become battered in this economy, will digital revenues remain robust for those companies for which it is just part of their revenue? Or will they too succumb to sentiment?

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