Dan Douglass on direct

Dan Douglass

Two pieces of news for The New Year that are seemingly conflicting but connected. First WPP looks set to shed several thousand staff in the US and Western Europe as recession bites. Any business within the group where the income to staff cost ratio exceeds 60% is a target for cuts.

Secondly, the CIPD (Chartered Institute of Personnel Development) urges companies not to 'over-sack' - the average cost of a redundancy is apparently £16,375. The cost of recruitment to re-fill the position coupled with the cost of redundancy. So in this time of economic uncertainty, it's likely that many companies will knee-jerk into false economies. And human nature being what it is, others will use the recession as a cover to pare down its workforce, maximise margins and knacker their remaining staff - which, in a creative industry, carries its own dangers.

Two things strike me. Firstly, at a time when too many marketing services companies and agencies are chasing too little in the way of budget, and clients are in need of positive results, now is definitely not the time for us direct agencies to use the 60% staff cost/income ratio as our compass. One of the ways we can insure our industry against client defections is to invest in the future and the efficacy of direct as a means out of recession. Secondly, it's become a truism that in times of recession marketing is the first to go as a budget line.

And we name and shame advertisers who have withdrawn investment in their brands through the lean times only to see their market-share plummet irrevocably (often we do so with not a little schadenfreude). Our people are our brand. Our brand is our people. So let's be careful - if we all followed Martin Sorrel's lead, we'd be guilty of undermining not just our brand essence but our credo, the very reason we're in business in the first place. And the very thing that should make us attractive to advertisers in these recessionary times.