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... An attention-grabbing headline, so no surprise it comes from the Mad Men of the advertising industry - to be precise, one Simon Francis, chief executive of Saatchi and Saatchi's operations in Europe, Middle East and Africa.

He was talking at an Edinburgh Chamber of Commerce event about handling brands, at a time when others in the industry are more rather concerned with steering through recession than building brand loyalty.

More below about the advertising sector in Scotland.

But according to London-based Francis: "It's been really tough.
Advertising's one of the first things to get hit. It's easy to turn off, easier than people. It's well documented that the UK market has been spectacularly badly hit, 20% down. Across Europe, it's 14% down year on year, and the year before wasn't great either."

Clients haven't disappeared, but they've changed the nature of their expenditure, he says. Some have spent through recession, particularly market leaders. Some have shifted what they're advertising on; banks on savings rather than loans, others on tactical promotions rather than brand.

The name of Saatchi's approach sounds either a bit hippie or a tad sleazy. It's a "super-evolved brand" called "Lovemarks" - the idea that you've got to take the emotional appeal and link it to the rational in equal measure, creating "loyalty beyond reason".

How that applies to the Labour Party, one of Saatchi's clients going into the general election, is something we've yet to see. Its forerunner, of course, was the Saatchi campaign 30 years ago for the Conservatives and Margaret Thatcher, a ground-breaking approach which put the agency on the advertising and political map, in the same way, according to Francis, that the Obama campaign showed the potential for a digital and online campaign.

The Lovemarks approach is pursued by brainstorming ideas in the agency's many teams across international boundaries, creating large numbers of ideas, and then whittling them down.

Even the most likeable ones have to be subjected to "brutal creativity". Hence that term "let's kill some puppies - we've got to be totally ruthless. We love them all, but you have to kill them to get the best of them".

It's not just recession that's changing the industry, of course.
There's also a technological change, which can be an opportunity.
Clients can save quite a bit on advertising spend if they use free media creatively, with viral marketing through Facebook, Twitter and on blogs.

"Our primary medium is people, and all the other media are a means to promote conversation."

And for those who wonder if the life of the advertising exec is the way it's portrayed in TV's retro chic Mad Men, the answer is: not quite.

But as an industry to work in: "It's never been better. The amount of creative opportunity! You can make films, television shows, create your own digital sites, create widgets and gadgets that they couldn't have conceived. Now is the most creative of all the ages, but perhaps the cocktail parties were more fun then".

You can hear more from Simon Francis in an interview on The Business, Radio Scotland, Sunday 13 December at 10am - also available on iPlayer and podcast.

Creative cuts in Leith

Coincidentally, I was looking at the advertising industry in Scotland this week, and it's not got its troubles to seek.

Much of it clustered in north Edinburgh, it has long operated in the shadow of London - which not only dominates the UK, but has a global role alongside New York.

Two sectors from which Scottish agencies have done well have been pulling back sharply on their spend. Predictably, the departure of Halifax Bank of Scotland's headquarters operation has taken a big client out of Scotland. Royal Bank of Scotland is hardly well placed to fill that gap.

Agencies have also won a lot of work from the public sector, but that is now being sharply reduced.

Finance Secretary John Swinney's draft budget has a 54% cut in the strategic communications budget, much of which is advertising spend on public service messages - encouraging you, for instance, to switch off the lights, use your car less, and to stop binge drinking.

That's a cut from £10.8m to £5m. And that's just the Scottish government. The other parts of the public sector, across quangos, are less obvious in their advertising spend, but there's a lot of it going on, from marketing Scottish tourism to fish, meat, water and Business Gateway.

And with the state of the public finances, that £5.8m cut is expected to be only a small part of the story.

A much bigger advertising spender is the UK government - second only to Proctor and Gamble. While others hacked back at their recession ad spend, the Central Office of Information went on a bit of a splurge.
Recent data from Nielsen shows it put up ad spending by 33% since last year, much of that on smoking and drinking messages, and protection against swine flu.

But that's coming sharply down again. Gordon Brown announced at the start of the week that Whitehall's advertising spend is to be cut by 25%.

The Scottish advertising sector has already lost a significant player in the 1576 agency, which went bust last year. Others have quietly been laying off staff, moving to shorter hours and cutting pay and benefits. Barkers went into administration, with few jobs retained under the new ownership of Penna, while brand design agency Navyblue is one of those to be struggling.

Ken Dixon, of the IPA advertising institute and boss of Newhaven says clients are cutting fees and demanding more for less, but he wants to be upbeat about opportunities. He has told the IPA members things are not going to return to the way they've been, so they have to look outside Scotland for new business.

Ian McAteer, of The Union, says the recession meant nothing happening until August, but it has picked up since then.

However, with the public sector cutting sharply, and the private sector recovery uncertain, he fears another dip in the economy would be "extremely bleak".