Ad Agency in a recession - the good, bad and ugly
October 27, 2009
With layoffs being in the headlines this is going to be the classic textbook definition of a jobless recovery (if we really are in a recovery). Leaving us Advertising Agency types with a serious problem. The first being the fact that many consider our services optional, as payroll takes precedence, hence leaving our industry with perhaps one of the highest unemployment rates in the nation.
The second problem is if you are lucky enough to have a job, how do you advertise in light of 17% unemployment rate, consumer confidence hitting the toilet and bankruptcies the normal way of life.
Seriously like what is there to advertise to? I wouldn’t want to be a high end Rolex dealer in this economy, nor would I want to own a Porsche Dealership. “Honey the mortgage is late, but check out my new car I picked up!”
Granted some companies are relatively stable in this economy, no-frills Wal-mart, local grocery store, utilities but the problem overall is that we still have excess capacity for the new reality of decreased demand.
That includes your job.
Recently there was a study that put 200 job applicants for each position available in an ad agency. Honestly if you don’t do a good job, think about it.. there are 200 people (literally) willing to fill your spot within minutes.
This is the environment you are marketing and advertising in. Your client doesn’t want to pay much to get little. In other words your advertising isn’t about creative, it’s about ROI, period.
But there is a good side to this, a very good side. Many of the fortune 500 firms now exist because during the great depression they survived, so the chances are if you can make it though this great recession, your firm will be miles ahead of others when it’s finally over years from now.
The bad news to this is that no matter how good you’re doing, the chances are someone is running more efficiently, so there’s going to be competition. The face that the entire world has moved online rather than print or TV is causing much more disruption than what would normally occur. A talented guy with an 8 dollar a year domain registration and a 5 dollar a month hosting account could eventually start stealing your clients.. Don’t laugh.. I did. Armed with a pregnant wife and 700 dollars to my name I effectively have many on my client list that were formally with a holding company. This is revenue that you should have had, not me, as your firm had the relationship but not the technically skillset. Remember you’re reading this blog post, and the chances are some of your clients are as well.
The problem is that overtime more and more guys like me will show up, hence causing more and more disruption in the market place. You have to remember, if someone can do that with little resources, a similar guy with more resources could do much more damage.
Enjoy the mess.
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