The advertising industry is passing through one of the most disorienting periods in its history. This is due to a combination of long-term changes, such as the growing diversity of media, and the arrival of new technologies, notably the internet. Consumers have become better informed than ever before, with the result that some of the traditional methods of advertising and marketing simply no longer work. More people are rejecting traditional sales messages, presenting the ad industry with big challenges.

Smaller agencies believe they can still compete by being more nimble. “There is definitely a change in the landscape,” says Jane Asscher, chairman of 23red, a London-based agency that describes itself as “media-neutral” in its choice of outlets for campaigns. Ms Asscher believes that consumers are becoming far more sophisticated in their reaction to all forms of advertising and marketing, so smarter ways have to be used to reach them.

Despite all of these complications, many in the advertising business remain sanguine. For Rupert Howell, chairman of the London arm of McCann Erickson, which is part of the giant Interpublic group, the industry's latest downturn was the third he has experienced. As it did from the others, he says, the industry is emerging a little wiser. But, he insists, “the underlying principles haven't changed.” Even the arrival of new media, like the internet, does not spell the demise of the old. Indeed, as he points out, TV never killed radio, which in turn never killed newspapers. They did pose huge creative challenges, but that's OK, he maintains: “The advertising industry is relentlessly inventive; that's what we do.”