Agency Execs Mired in Malaise

Survey Reveals Most Believe 2008 Is a Lean Year; Emerging Markets Offer Hope

By Published on .

NEW YORK ( -- The ad business, with the exception of emerging markets in Asia and Latin America, has hit upon rough times, based on a recent poll of top agency executives.

Of the more than 80 agency CEOs from around the world who participated in the survey, 60% said economic conditions in their markets had worsened, compared with a year ago. North American agency CEOs had a slightly dimmer outlook, with 65% saying their regional economy has taken a turn for the worse since last year.

The survey was conducted last month by Worldwide Partners, a global community of more than 90 agencies with billings ranging between $5 million and $500 million. Agencies in the network include Kirshenbaum Bond & Partners and West Coast indie Butler, Shine, Stern & Partners. Participating CEOs are all members of the privately held, Denver-based network, which manages more than $4 billion in ad budgets globally.

North American CEOs uneasy
When it comes to marketing budgets, nearly half of North American CEOs, 46%, reported their clients have cut spending since a year ago. Slightly less said they were maintaining spending levels, while only 10% said clients are devoting more dollars toward marketing. Globally, 38% of CEOs reported clients have slashed spending.

Across the global ad landscape, agency CEOs in emerging markets are optimistic about the business in the current economic climate. "Only the Latin American and the Asia-Pacific regions believe their clients will be expanding more internationally, so this certainly indicates the optimism of emerging markets and a potential change in global business and advertising," Al Moffatt, Worldwide Partners' CEO, said in a statement.

Despite what seem like near-daily headlines in the U.S. about agency layoffs, when asked about staffing levels, the executives did paint a sunnier-than-expected picture, though.

Forty-four percent of North American CEOs said they intended to hire staff next year, and less than one-fifth of the respondents said they anticipated layoffs. Globally, 46% of the respondents said they expect to maintain current staffing levels, while 37% said they would ramp up staff within the next year.

Strategic options
When asked what the one thing was they would tell clients to do in order to increase their likelihood of marketing success over the next 12 months, CEOs' responses included: "embrace digital media 100%"; "invest in global diversification"; "be more integrated in all your marketing activities"; and "execute research and focus on compelling product benefits."

And when asked to predict what their economies would look like in 2009, the majority of participants overall felt that condition would stay the same (38%) or improve (39%). In North America, 38% of the CEOs responding predicted their local economies would improve next year, and only 10% thought conditions would worsen.
Most Popular