Thursday, October 8, 2009

Ad/PR Agencies More Likely to See Clients Cut Spending

A mixed bag from AdWeek...excerpted:

While detecting greater client optimism than they'd encountered earlier in the year, CEOs of privately held advertising and public relations agencies are still more likely to see their clients cutting than fattening budgets during the rest of 2009. That's among the key findings, at any rate, of a global survey of such CEOs, released yesterday by Worldwide Partners Inc. and ECCO International Communications Network.

Just 22 percent of the ad/PR agency CEOs said they expect client budgets to increase during the rest of this year, vs. 34 percent anticipating further cutbacks. Already, 76 percent of those polled said clients had reduced their 2009 spending through September.

This pattern of austerities comes despite 78 percent of respondents saying "their clients were 'more optimistic' about the business climate in their region than at the beginning of the year." One dreads to think what would be happening to budgets if clients were not becoming more optimistic.

The survey also found a trend away from "budgetary commitments" on the part of clients. "When asked if clients had stopped making annual budgetary commitments due to economic pressures in 2009, 76 percent of the CEOs globally responding said 'yes,'" according to the report.

Under the circumstances, it's hardly surprising that the ad/PR firms have been reducing their own staffs. Forty-two percent of the survey's global respondents (including 47 percent in North America) said they've reduced the full-time head count this year. Looking to the rest of the year, though, 65 percent of global respondents said they expect staff levels to hold steady, and 24 percent think staffing will increase. In North America, 71 percent said they expect the head count to hold steady through the rest of 2009, and 29 percent think it will rise.