• The Economist, Friday, January 25, 2008 10:46 AM

Traditionally, a recession really hurts the advertising industry because marketers scale back spending when the economy slows. Advertising execs Maurice Levy, CEO of Publicis Groupe, and Martin Sorrell, CEO of WPP, two of the largest ad holding firms, agree that clients will eventually scale back their budgets, but not until 2009.

This is partly due to three major global events in 2008: America's presidential election, the Olympics in Beijing and soccer's European Championships in Austria and Switzerland. Levy says the big-ticket events could add as much as 1 percent growth to global ad spending, off-setting any economic weakness this year.

The light at the end of the tunnel is Web advertising, which has brought greater accountability to the industry. Marketing execs can now see when their spend leads to a sale. Research groups disagree about whether global ad spending increases over the next few years, but they agree that underlying growth will come from the Internet. There is a gap between how much time consumers spend on the Internet and (about one-fifth) and how much money marketers devote to the Web (about 7.5 percent). Companies are trying to narrow that gap. Search should be safest.

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