The recession is hitting advertising agencies and their clients hard.
According to the “Client-Agency Economic Outlook Survey” from Reardon Smith Whittaker (RSW), the economy has had a negative effect on the business of 87% of US agencies—and 91% of their clients.
In the first half of 2009, 55% of clients had spending decreases of 6% or more.
In addition, 35% of them expect to see marketing spending fall by 6% or more in the second half of the year.
Possibly because e-mail is considered an inexpensive and effective marketing method—good for tighter budgets—50% of agency clients spent more on e-mail marketing than the previous year (for more information, see Why E-Mail Subscribers Unsubscribe).
Almost one-third of clients increased their commitment to search engine optimization, while 56% and 28% did the same for social media and online display, respectively.
“If you don’t have a good grasp of new media, you had better get on it,” recommended RSW analysts in the report.
The main reasons clients left agencies were lack of fresh ideas (73%) and the need to cut costs (44%).
The report recommended that agencies ask themselves: “What insights, ideas, creative solutions can you bring to the client’s table that others can’t?”
If advertisers don’t have good answers, clients will go find them…somewhere else.
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