The Ad Market

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The good news/bad news game continues. As U.S. unemployment hit an eight-year high in March, ad agency employment took another dive. The good news: the rate of shrinkage hit its lowest level since last summer. While agency layoffs are not over- Omnicom Group's BBDO Worldwide and online shop Agency.com made headcount cuts last week-widespread layoffs have subsided as holding-company earnings stabilize. But agency employment is a lagging indicator of the market, so any significant upswing in employment is unlikely this year.

Market seesaw, continued: The Federal Reserve Board left interest rates put at its May 7 meeting, and a good earnings surprise at Cisco Systems caused a mini-rally in tech stocks May 8 that helped drive the market to a strong one-day gain. But the rally fizzled the next day as investors took the profits and ran amid more worries of Middle East unrest and weak April retail sales reports. For the week, 34 AdMarket stocks were down and 16 were up.

Agency stocks finally got a break. Between their beaten-down status and Wall Street's belief that an advertising recovery is just a matter of time, many of the worst performers of the last six months posted gains. Bargain-hunting investors picked up Havas Advertising, WPP Group and Interpublic Group of Cos. (See Havas and Grey's earnings, this page.)

Advertising Age and Bloomberg's AdMarket 50 index of 50 top publicly traded marketers, agency and media companies for the week ended May 10, 2002, based on stock trading data supplied by Bloomberg financial news service. All comparisons are based on closing prices May 3.

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