Gerred Blyth (Lighthouse Experience) and Be Kaler Blake (Aquent) presented on their perspective on the user experience industry and how companies and individuals can cope and find opportunities during the economic downturn. Discussions and pop quiz results from the evening are incorporated in the slides.

1. User Experience
in an Economic Downturn
Gerred Blyth and Be Kaler Blake
UKUPA Jan 09

2. Contained Within...
We will reveal thoughts on the current industry climate and also wisdoms from the
last two UK economic downturns
These are based on an initial series of phone interviews and conversations in January
2009 with a range of people:
Agency Heads In-house UX team leads
Account Managers Proprietors of Consumer Websites
Freelancers Proprietors of B2B Websites
Business Consultants Industry Commentators and Journalists
Additional material contained here was developed in workshops with UKUPA members
on the evening of the session

3. Pop Quiz!
1. How many UK companies were listed as offering User Experience services in the
2008 User Experience Directory, published on World Usability Day?
Lowest Guess - 20; Highest Guess - 1500; Average - 20; Answer - 80
2. What was the estimated value of the usability and accessibility market in 2008
according to E-Consultancy’s Usability and Accessibility Buyers Guide?
Lowest - £250k; Highest - £4bn; Average - £48m; Answer - £214m
3. What was the percentage increase or decrease since 2006?
Lowest – 8%; Highest 400%; Average – 60%; Answer - 45%
4. What was the average charge out rate for a user experience consultant in the
2008 Agency Rate Card Survey?
Lowest - £350; Highest - £1500; Average - £839; Answer - £707
5. What is the average freelancer rate for user experience roles?
Lowest - £300; Highest - £1000, Average - £430; Answer - £300

4. What’s Going On?
UK GPD Growth (%)

5. What’s Going On?

6. What’s Going On?
In the words of our interviewees:
I don’t know what all
Time to draw in and
the fuss is about!
survive
Never been busier..
Time to profiteer!
It’s part of the normal
economic cycle Everything’s totally
[ahem]

7. Bad news for...
Housing!
Financial Sector!
Motor Industry
Retail Expenditure
Advertsing Expenditure
IPA Bellweather Report shows 49% of UK companies reduced total
advertising spend in 2008
GroupM’s This Year, Next Year report forecasts an overall fall in
expenditure in all measured advertising media of 0.2 per cent.
ZenithOptimedia’s Advertising Expenditure Forecasts report predicts
advertising to fall in North American and Western European
markets by 5.7 per cent and 1.0 per cent respectively.
Enders Analysis report predicted UK newspaper ad revenues will fall
by 21 per cent in 2009
Confirmed in UK by ITV and Channel 4 figures. A 1% drop in ITV
advertising in 2008 underpinned a 28% reduction in profits in their
May 2008 statement.
Obtaining Funding: NVCA (US) survey shows that 92% of VCs
predict reduction of capital available in 2009, to an estimated $25
billion (from peak of $35bn in 2007). This overall reduction is offset
by likely increases in clean technology, medical sciences and bio
technology. Leaving interactive and new media seeing the greatest
fall.
Being a VC: 72% not expecting any IPOs un til 2010.

8. Good news for...
Poundland ☺ - 24.3% jump year on year - Dec 08 vs Dec 07
Morrisons ☺ - 5000 new jobs in 2009
UK Tourism - is going up! West end, Theatres, tourist attractions
Other: ‘Staycations’, Home Improvement, BBC Financial
journalists, Adult services, church attendance, buzzwords, lawyers
and accountants specialising in restructuring.
More importantly:
Exporting good or services
A weak pound means Britain is more attractive for exports. Selling
a £10,000 product to a German company would have cost them
€13,500 a year ago, now would cost them €11,400 (not that
anyone is buying anything, ahem)
Selling within the UK
The weak pound means importing goods or services is less
attractive for UK purchasers. Anyone buying good or services from
overseas – esp Euro zone or US will be starting to look to UK
suppliers as a way to save money
Online Retail
A survey of 1,957 people by Lightspeed Research found 36% plan
to do more shopping online and less on the high street this year.
Aldi.com - 64% y-o-y increase in uniques to Aldi.com who are now
launching a travel and flowers presence
ASDA Direct - 70% year-on-year growth
Play.com - 23% increase y-o-y sales

9. Good news for...
ETSY.com
ETSY made its record daily sales on on Sept. 29 (the day the US
stock market took one of its most significant falls),
In Nov 08, artists sold $10.8 million of goods (up from $4.2 million in
November 2007) . 135,000 new registrants and 1.1 million new
items listed, both figures more than double the same month last
year.
Experian
Now with 1 million customers with monthly payments to check their
credit rating
Software as a Service
Intuit, and Salesforce.com have both shown growth in 2008.
HR Departments - Voluntary turnover of staff falls in time of
recession
Online Advertising
2009 is the broadly agreed to be year that online advertising send
will outstrip TV. It will reach £3.58 billion in the UK by the end of
2009 (a newly corrected and more conservative estimate from
eMarketer)
ZenithOptimedia’s Advertising Expenditure Forecasts report predicts
that online advertising will grow 18 per cent in 2009.
GroupM’s This Year, Next Year report forecasts a rise of five per
cent for internet advertising in 2009

10. Good News
Neilsen Online:

11. What happened in 2000?
“From the top down the big 5 consulting firms were recommending “web strategies”
with no real basis in common sense. From the bottom up, creatives and developers
were recommending unworkable ideas. It was madness from both sides, frankly.”
Cleared away inefficient companies and business models
Wasteful excesses are shut down
Non-jobs disappear, non-business go bankrupt
Governments become more business friendly
Consolidation of companies
More start-ups – costs are low!
Was undoubtedly the birth of the UX industry as we know it
Afterwards:
It was extremely hard to rebuild key teams
Companies that held on faced reduced competition
User Experience, with its focus on measurement and incremental improvement
was forged

12. What happened in 2000?
The last three US bubbles have had
beneficial outcomes - While investors indeed
do lose money, businesses and consumers
find themselves with a residual ‘usable
commercial infrastructure’ that they quickly
put to new uses.
The telegraph led to the creation of
national and international financial
markets..
Extra railroad lines made national
consumer brands possible and gave
consumers access to distant stores
After 2000 extra fibre-optic capacity gave
everyone Internet access...
What will the finance and property
bubbles set us up for?

13. Forecasts for UX in 2009
Different circumstances in 2009 - Even otherwise sensible companies can face a
brick wall of heavily reduced funding, customer spend, or advertising spend today
Online, and interactive, represent great ways to reduce costs through customer
self-service. If this is so, the experience needs to be as good as possible.
SEO poses the most attractive –and, crucially - measurable expenditure on the
Web
If it seems OK now, the April-May budget cycle may show a big reduction in
expenditure – an unwelcome piece of news for those on both sides!
Retail will continue to slide in general. Think about what you want to buy right
now. If you can’t think of anything significant, why would that be different for the
population as a whole?
In terms of sectors, any “stay at home” products will do well. Companies that
have been on the edge for years will fall over – c.f. Woolworths.
Brands can live on even if the companies don’t! Cf Zavvi having to close their
website.

14. Advice for Agencies
Be positive about your services and your contributions
Cashflow Cashflow Cashflow!
Its just general good business process, but more important now then ever:
- Bill early and have a good system for collection
- Client credit checks
You will be leaking money somewhere. Find it and stop it!
Reduce operating costs before its becomes a problem
Present services as good value. Think of how well Primark and Aldi have
performed in the last two quarters which is more a consequence of consumer
confidence and expectations rather than any reality!
Innovate services without increasing costs
Focus on quick win projects for clients. Put yourself in your clients shoes – would
you spend the money?

15. Advice for Agencies
Agencies essentially survive by
under-servicing everybody.
They will find this needs to change!

16. Advice for Agencies
“Usability”
“Good Value”
This is Scientific Proof that expectations of agency services are changing

17. Advice for Individuals
Create your own luck – cf Prof Richard Wiseman
Meet people! Every conversation is an opportunity
Ensure your contributions are noticed
Self promote
Improve your CV and train on weak areas
Produce personal projects
Consider geographical independence:
- Local: businesses relocating to cheaper premises
- Wider: language, knowledge of other markets

18. Advice for Individuals
If all else fails...
FoxJobs in the US found certain words were increasing in job ads as the recession
took hold:
1. Sales Representative/Business Development
2. Account/Customer Support
3. Accounting Staff
4. Counselling/Social Work
5. Software Design/Development
6. Administrative Assistant
7. Networking/System Administration
8. Nursing
9. Mechanical Engineering
10. Sales Management
Biggest increase – up 8 to 16 – “Technology Executive”

19. Advice for In-house / Startup
As venture capital funds withdraw, look away from invention-based innovation and
towards other types of innovation
Ensure all progress is measurable (and measured!)
A / B or Multivariate testing is an approach that can offer demonstrable value
Abandon the assumption that budgets need to increase 10% year on year – look
to value and how you can prove value
Join Nesta’s crusade to seek a government underwriting of financing for early
stage companies. Why are just the banks being bailed out when the seized-up
venture capital community has left innovation high and dry?
Diversify your funding now – don’t have all your investment eggs in one basket,
lest you have to join the scramble for finance when yours runs dry
If it all goes wrong, wind up nicely
- Set honest expectations
- Establish a wind-up date where redundancy payments can be made (i.e. Don’t
punish people for staying!)

20. Thanks!
gerred@lighthouseexperience.com
bekalerblake@aquent.com