Get Your Budget Back

How Ad Executives Cope With an Industry Recession

Monday, July 27th, 2009

The largest advertising agencies had already cut more than 18,000 jobs by April of this year. And as the ranks of Madison Avenue’s unemployed swell, the job of finding relevant work has become a big challenge for ad executives.

“People are getting desperate,” says Amy Hoover, a vice president at Talent Zoo, an executive-recruiting firm that specializes in ad-industry placements. “Job candidates are asking me to submit them for jobs that offer less pay and less responsibility — just so they can be employed again.”

Ad people are used to jobs being eliminated when accounts shift from one agency to another. But rarely has the industry’s foundation seemed so shaky. Even before the Sept. 11 terrorist attacks, agencies of all sizes and shapes were already facing a bleak environment because of the slowing economy. The attacks have only exacerbated the problem. On Oct. 19, Kirshenbaum Bond & Partners let go 10 of its 50 employees at its West Cost office. On the same day, Omnicom Group’s TBWA\Chiat\Day disclosed that it had laid off 15 people from its work force of about 800. Other ad firms that have also issued pink slips recently include Interpublic Group’s Mullen/LHC, and Wieden & Kennedy.

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Survey Shows Some Agency Optimism

Wednesday, June 24th, 2009

The responses to a survey of 200 marketing and 100 advertising agency executives, conducted by RSW/US, a lead generation and  business development firm, showed ad agencies to be slightly more optimistic than clients about the prospects for the economy and the advertising business over the rest of 2009.

Agencies participating in the survey, released in mid-May, included Leo Burnett, Mindshare and Bailey Lauerman. Clients included Ford, GE, Kraft, Lego and Lenox.

While 51% of each group said that the second half of the year would see at least some continued falls in ad spending, more agency respondents (42%) felt the economy had already hit rock bottom and would therefore start to improve over the rest of the year than clients (35%).

Mark Sneider, owner, managing director of RSW/US, said, “While it appears some of the worst might be over, it’s probably best if agencies try to do more with less in the short term.”

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The Economy Sucks. Now Adapt.

Monday, April 27th, 2009

There’s one good thing about a bad economy that many marketers forget about, since 99.999% of the news is doom and gloom playing with our brains — in a really bad economy, people are more apt to change their buying habits.

Yes, that may mean buying less of a product or service in your category. And this is where some corporate types with lack of imagination will see cutting back on marketing as the band-aid solution to their problems until they ride out the recession. But the question isn’t really whether to cut back on marketing or even spend more on it. You have to start with the very product or service you offer and ask yourself how you are going to adapt that product in order to give it increased versatility and in turn, value.

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Recession Marketing Success Requires Boldness

Wednesday, April 22nd, 2009

Over the years hundreds of studies have been conducted to prove companies should maintain advertising during a recession.

In the 1920’s advertising executive Roland S. Vaile tracked 200 companies through the recession of 1923. He reported in the April 1927 issue of the Harvard Business Review that the biggest sales increases throughout the period were rung up by companies that advertised the most.

After World War II, Buchen Advertising, Inc. decided to plot the sales of a large number of advertisers through successive recessions. In 1947, it began measuring the annual advertising expenditures of each company. When they correlated the figures with sales and profit trends before, during and after the recessions of 1949, 1954, 1958 and 1961, they found that almost without exception sales and profits dropped off at companies that cut back on advertising.

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