If Sir Martin Sorrell said Christmas had been moved to this weekend, it seems the entire media industry would rush out and buy their presents tomorrow. So influential is the chief executive of WPP, that his views on the media sector are perhaps listened to more carefully than those of anybody else.
With the news dominated by the US credit crunch and how this will filter through to the wider global economy, Sorrell's soothsaying is needed more than ever. Is the advertising industry set to enter the recession the press keeps telling us we are all heading for? And will clients slash their budgets as the effects hit home?
According to Sorrell, there is no need to panic - not for the time being, at least.
"WPP's performance in 2008 to date has been better than in 2007," he says. "Excluding acquisitions, we are up 6% this year, compared to 5% last year. I'm cautious about 2008: you'd be foolish not to be. However, the year has been strong so far."
Sorrell attributes his confidence for the rest of 2008 to major sporting events such as the Beijing Olympics and the Euro 2008 football tournament, as well as the ongoing US presidential election. He adds: "It's an election year in the US, and not even an outgoing president wants to leave a poor economy behind. The US is experiencing a slowdown, but I don't think there will be a worldwide recession."
However, Sorrell is not so bullish about the forecast for 2009. "The picture changes in 2009," he says. "There will be a new American president who will have to make some tough economic decisions. The effects of the credit crunch will be felt next year, but I don't think that we will enter a long period of negative news. The fallout will be a short, sharp shock, and things will pick up again in 2010.
"In 2010, we'll have the Winter Olympics in Vancouver, the football World Cup in South Africa, the Shanghai Expo and the Asian Games. There will also be some spending on the mid-term congressional elections in the US. In other words, political, business and sporting events will turn things around in 2010."
If Sorrell's tone appears largely optimistic, he does concede, when pushed, that some areas of media are already feeling the pinch, some way before 2009 even appears on the horizon.
He adds: "The areas feeling the pressure are traditional media in traditional markets. Television and press in the UK, US, France, Italy and Germany are experiencing some slowing down, but it's certainly not a crisis."
Unsurprisingly, the latest figures from GroupM, the forecasting arm of WPP, support Sorrell's view (see box on page 28). However, if its latest figures appear a little too rosy for some, we can expect adjustments on the growth for some sectors, particularly outdoor and the internet, when its revised figures are published at the end of this month.
Nick Mayberry, head of media at Barclays Commercial, whose client list covers 45% of the broadcast market including GCap, Shed Productions and Shine, agrees with Sorrell's predictions: "Sorrell has got it about right: companies are coping pretty well on the whole. There will be a reduction in spending in 2008 compared to 2007, and ad revenues will be lower than envisaged, say, a year ago."
He adds: "Nevertheless, I believe company results will be up year on year and the market will show resilience. There will be growth, but the growth will slow."
However, less optimistic is Steve Simpson, global director of MindShare ATG, who warns of a "fundamental shift" in market confidence in 2008. He says: "The slowdown in consumer spending will ultimately have a knock-on effect on advertising spend, and it's likely to create a focus on accountability and effectiveness.
"Our clients typically realise that marketing strengthens your brand even as spending slows. Those who do continue to promote their brand values experience share growth and benefit from future opportunities to command price premiums."
Sorrell's views on traditional media have been supported by broadcast groups such as GCap, ITV and SMG, who have weathered the first quarter of 2008, but are less positive about the months ahead, in the face of growing evidence that advertising budgets are beginning to be cut as the price of commodities across the globe rocket and companies' costs increase. Some estimates claim UK broadcasters could face a shortfall of more than £100m in revenues compared to last year.
Tess Alps, chief executive of TV marketing body Thinkbox, says: "Good business management practice should support maintaining marketing investment in a downturn. The best chief executives can persuade shareholders not to give in to tempting short-term profit pressures and so jeopardise long-term profitability."
She adds: "Brands that keep spending come out ahead. And brands that have already invested in brand-building media such as television are in the best position to sustain the price increases that are now inevitable because of the rising cost of raw materials. If your only message to customers has been discounting and BOGOFs, (buy-one-get-one-free), then you have nothing left to trade on when prices have to increase."
One sector that has more doom-mongers predicting its demise than any other is classified advertising, which could spell bad news for regional newspaper media owners such as Johnston Press and Trinity Mirror.
Lorna Tilbian, a media analyst and director at Numis Securities, says: "I'm not too concerned about display press advertising, which had a correction between 2001 and 2003. But classified ads have not had a correction since the early 1990s. Property, motoring and recruitment ads are all in for a big hit."
As for online, the general theory is that it will continue to grow, as the market is still maturing. But Tilbian is "more realistic" about the web. She says: "Online will grow, and grow well. But it's coming from such a small base. It won't grow anything like as much in 2008 as it has done in recent years. It has been up 30 to 40% in recent times; in 2008, I expect that figure will be up between 10 and 20%."
However, Tim Jones, head of digital services at financial specialist media agency Ptarmigan Media, argues that it is "highly likely that digital media will continue to enjoy growth over the next couple of years, whether recession arrives or not".
He says: "A media recession could prove the catalyst for the establishment of online as a core element of the marketing strategy, rather than still being a footnote, due to both its transparency and its ability to deliver a complex marketing message."
Meanwhile, Tim Bleakley, managing director of CBS Outdoor, picks up on another trend: that the money may still be around for 2008, but advertisers are holding on to it for longer in order to get the best deals.
"The market is very late this year," he says. "People are holding on to their budgets for longer and are a great deal tighter. I agree with Sir Martin that we will not see the full effects of the credit crunch during 2008. We are confident of growth this year, and I believe the outdoor market will continue to outpace traditional media, outflanked only by the internet. But, it has to be said, growth is slowing."
Dominic Carter, trading director at Times Media, agrees with Bleakley's picture.
He says: "Advertisers are going to ask money to work a lot harder, and they will want to see even greater evidence of their return on investment. But the display sector in the press is a great deal more robust now than it was, say, during the early 1990s."
The media world is not an industry known for its pessimistic outlook, but it appears there is a great deal of realism around right now. Like Tilbian at Numis Securities, the market is bracing itself for the bite and trusting the robustness of media to ride out any storm that comes its way, particularly during 2009.
One thing is for certain: nobody is panicking. However, if WPP has a few bad months and Sorrell's view darkens, you can be sure the clouds over the media sector will too.
How worried are media bosses about the outlook for the industry?THE AGENCY HEAD
Linda Smith, chief executive, Starcom MediaVest Group
I'm probably more cautious than Sir Martin. There will be some short-term boost around the Beijing Olympics, and April is holding up okay at the moment as there are some good deals to be had. But the slowdown will come earlier than 2009, probably in the second half of 2008.
I see this year as ending slightly down on 2007. We'll still have growth in sectors such as online, but there could well be a slowdown in traditional channels. Advertisers appear to be in a wait- and-see situation.
We'll see a shift in campaigns' emphasis, with more promotions such as buy-one-get-one-free offers from retailers to tempt people in.
I predict we'll be up, until June, and then start to drop. It's not all doom and gloom, but people do need to play things close to their chest.
THE CLIENT
Bernard Balderston, associate director for media UK and Ireland, Procter & Gamble
There is a widespread feeling among agencies that television spend for 2008 needs to be talked down to around break even or slightly below last year. In other media, we're seeing more short-term deals in print and, as I understand it, online will continue to grow and outdoor will also be positive this year.
Procter & Gamble has ridden through many economic downturns across the globe and we've typically found that if we continue to provide quality and choice to the consumer, then we have the kind of products and price range that are relatively impervious to economic conditions.
Sorrell may well be right, but it's difficult to tell right now. There are distinct signs of softening in television and indications that we're seeing the beginning of a reduction in investment by advertisers. Of course, this is impacted by the cost of raw material. Oil-related products and paper, for example, are getting more and more expensive, and this can impact on budgets.
THE MEDIA OWNER
Mick Buckley, president and chief executive, CNBC Europe
When budgets are under pressure, investments have to work harder to deliver results for advertisers. Increased scrutiny will mean that audience relevance and wastage play a larger role in media planning. Media outlets that deliver specialist global audiences and offer flexible and creative platforms are in a strong position to meet advertisers' needs.
THE CITY
Alex de Groote, media analyst, Panmure Gordon
Most UK sectors - commercial radio, commercial TV and national newspapers - are seeing advertising growth in the year to date, compared to last year.
However, one sub-sector in decline is classified ads, which are the mainstay of regional newspapers and directories.
Regional publishers and companies such as Yell.com are in for a rough time this year and next. Elsewhere, I'm not seeing a massive impact, since advertising has a lag relationship with company profits.
To date, the impact of the credit crunch has been negligible, other than in classified advertising.
Retailers can't afford not to advertise in any downturn, as they have to keep footfall up.
From my perspective, people are not yet cutting budgets, and I am not seeing much doom and gloom around.