The Ad Market

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DOWN TIME: After a brief surge at year-end 2002, U.S. ad agency employment dropped again in January, to 181,400 nationwide, as consolidation and layoffs brought agency payrolls back to the levels of early 1999. With additional layoffs expected at Interpublic Group of Cos. and continued cost cutting at other holding companies, numbers likely will keep dropping in coming months.

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War rally is on: Bombs dropped on Baghdad and stocks rose on Wall Street. Released from the pre-war uncertainty, investors pushed stocks higher, even as more negative economic indicators surfaced and the Federal Reserve Board refused to cut interest rates. All 50 AdMarket stocks rose during the week.

Investors picked up shares of beaten-down stocks, such as Interpublic Group of Cos. and automakers. They also sought out cheap performers such as Omnicom Group, even after the company's debt was downgraded by another credit-rating agency. Viacom rose after it announced president Mel Karmazin had signed for another three years. Walt Disney Co. fell after executives trimmed earnings estimates due to wartime drops in theme-park attendance, but recovered in the war rally (See The Week, P. 20). Altria Group-faced with another judgement against its cigarette marketing practices-nearly missed the rally, rising only 0.31% for the week.

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