Report: Madison Ave. Cuts Coming
December 8, 2008 at 6:10 AM (PT)
Radio knows the pain of budget cuts all to well, and now THE NEW YORK POST reports after trimming jobs throughout the year, MADISON AVENUE is bracing for even bigger layoffs in 2009. Ad executives and recruiters expect agencies, which have been cutting in dribs and drabs, to hand out a flurry of pink slips early next year as the ad downturn worsens.
The talk in industry circles is that the major agency holding companies -- INTERPUBLIC, OMNICOM and WPP -- are planning deeper cuts to ring in the New Year.
"Close to 50% of agencies are owned by holding companies," said JOANNE DAVIS, a long-time ad-industry consultant. "The public markets are putting pressure on these companies to perform."
INTERPUBLIC is bracing for things to get even worse for the auto business. INTERPUBLIC agencies CAMPBELL-EWALD, MCCANN ERICKSON and DEUTSCH all have a piece of the GENERAL MOTORS account. INTERPUBLIC is mulling layoffs in the event GM slashes its ad spending even further or reduces its stable of car brands. INTERPUBLIC agencies employ an estimated 900 people in DETROIT with ties to the auto business.
"Everybody is focused on DETROIT, where there will be significant cuts," said one source close to the situation. "Anywhere that you have an agency that touches the Big 3, you are preparing for spending to be down 25%."