In a story last week, I asked Orange County’s advertising executives to sound off about what they’re expecting to see this year from clients.
The slowing economy has everyone watching closely, since often marketing budgets are the first to get cut when times are tough.
For the most part, executives said they are optimistic, with many anticipating business to grow this year. I had a chance to talk with far more people than I could fit in the story. Here’s a look at what some others had to say.
What changes have you noticed with your clients? Have they pulled back on budgets or swapped where they want to spend money?
Jim Harrington, president, O’Leary and Partners, Newport Beach: We haven’t seen a reduction in our clients’ budgets. But we have seen a shift in emphasis. For some of our retail clients, we are providing more value-added promotions rather than discounting. That has helped them maintain and sometimes increase average purchase revenue and draw additional traffic. For our packaged goods and manufacturing clients, we have seen an increased focus on their (trade) customers in addition to consumer communications.
Jon Gothold, partner, executive creative director, DGWB Advertising, Santa Ana: Many of our clients are actually increasing their budgets for 2008. This is not to say that they are looking at just throwing money at the situation,far from it. The shift, in general, is to more focused decision-making and programs.
Dominic Symes, chief executive, Honest Mechanics, Costa Mesa: We already can see the ramifications in food, restaurants, automotive and financial lending categories. 2008 is going to be an interesting year for us. We’ve already had a very big cutback from one of our key accounts, Fleetwood Enterprises Inc. The increases in gas prices have hurt motor home sales. Food and restaurants are also doing everything they can to move the needle in sales. We’ve spent a lot of time with our client Fatburger Inc. planning a series of limited time offers this year to create strong value propositions to customers.
What are you projecting for business this year? Billings up, down or flat? What are the indicators?
Harrington: We expect business to grow this year. We will continue our pattern of “smart growth.” (We expect) increased revenue from some of our current clients and the addition of one to three clients who fit with our long-term business plans.
Gothold: We are cautiously optimistic and initial projections indicate that billings should go up this year. We are currently in several new business pitches. We have an extremely diversified client roster, which keeps us somewhat recession proof. And we have spent the better part of the year refining our own brand in the market place, which has helped us stand for something different.
Symes: Pretty flat in the more traditional services but we see huge potential for growth in interactive and digital services.
In times of recession, often marketing and ad budgets are the first to be cut. What are you telling your clients to help influence their decision?
Gothold: We encourage our clients to take advantage of the tumult and reinforce their brand position and what makes them distinct in their market.
Symes: The experienced marketing clients spend more. Why? Because they come out of a recession with greater market share over their competitors. It’s all about being smarter for your clients and making their ad dollars go further.
What changes will you make at your shop this year to stay competitive and weather a potentially difficult business environment?
Symes: Agencies that are behind the curve in the interactive arena, social marketing, mobile and online media are really going to struggle to take advantage of growth opportunities. These services are vital components right now because there are so many clients looking to the agency to advise them in how to split up their annual budgets beyond the more traditional advertising approach. This year we plan to get better and more effective in digital. (We’re also) communicating a lot more with our clients. We’re meeting with clients more often, talking to them more on the phone and going into meetings we would not normally be involved with. It helps us recognize opportunities that sometimes the clients may not. We’re also identifying client business categories poised for big growth in the next few years,video games, for instance. We were just recently appointed by the GameSquad LLC. Its planned growth is very aggressive and fast.
