ROLLINSVILLE, Colorado (USA) – While independent ad agencies globally are taking predictions of a possible U.S. recession and the subsequent turmoil in global financial markets in stride, some agencies, including many in the U.S., have started making changes to their 2008 plans, according to an ICOM Global Survey.
Calm but concerned is the general sentiment suggested by the responses to the survey of the ICOM network member agencies (http://www.icomagencies.com/), which are owned locally and work globally in more than 50 countries from China to the Czech Republic.
The survey was designed to gauge the impact of the predictions and financial market reaction on independent agencies, generally small and mid-size companies offering global capabilities, including integrated advertising and public relations services.
Some 17 agencies in the international network said that these concerns are triggering changes in their plans for 2008 while 30 reported no changes. Agencies from more than 30 countries responded to the survey. Not surprisingly, the most agencies reporting change are in the U.S., where the number of those making changes is double the number taking no new actions.
Agencies in only two countries, one in Latin America and the other in Asia/Pacific, said that their business is “very dependent” on what happens in the U.S., while 20 reported “somewhat dependent” and 10 “not dependent at all.”
Commented ICOM President Rino Ferrari, also president Rino Publicidade, São Paulo, “For sure, difficulty in the U.S. economy affects the whole world. But let's remember we in marketing communications are the professionals of optimism. If everybody is crying, we should step forward selling handkerchiefs.”
Twenty-eight agencies said they expected their business to grow in 2008; 10 reported they expected their business to remain at the same level; six are predicting a decline. Responses were fairly balanced across all geographic regions. For a geographic breakdown of responses, click here.
Six of the 13 North American agencies responding to the survey said their clients are cutting back on their planned 2008 marketing communications investments, with the average cutback being 34%. Most of the cutbacks are in the areas of traditional print and broadcast, followed by direct response; there are some cutbacks reported in online, promotion, public relations and special events/trade shows.
Among the agencies making changes, the most common steps are reducing staff, establishing a hiring freeze or postponing or canceling plans for large-ticket purchases. Many said they are becoming increasingly aggressive with their new business activities to encourage greater growth, such as adding experienced, dedicated new business development people and investing in proprietary research to provide more insight for new business opportunities. Some said they are expanding their scope into more areas of marketing while others said they are becoming more targeted, carefully selecting prospects and not participating in any reviews conducted by search consultants.
When asked their one best piece of advice to operating a business in such economic times, a number of agencies said “staying close to clients and their business,” “paying close attention to detail,” and “taking appropriate actions quickly.”
Principals from ICOM agencies around the world are available for further comment. For a list of agencies responding to the survey, click here.
About ICOM: ICOM, a leading network of independent advertising agencies, represents US$2.0 billion in revenues annually. ICOM offers a full range of integrated marketing and media communications services and is an alternative to the huge and increasingly similar agency groups.
Contacts:
Nancy Giges
1-914-683-5108
Gary Burandt
1-720-261-4829