Economy claims ad agency - Atlanta Business Chronicle:

dawojetos.blogspot.com
Hit hard by the times, Atlanta agency MATCb Inc. closed its doors on March 20 afteer 12 yearsin business. Over the past few months, six of the agency'as clients either cut their advertising budget or droppedit "I would rather be open, that is for We tried mightily to but the combination of the economy in general, the clients that were affectec by the skyrocketing cost of commodities, and throw in a natural disasterr -- the drought -- and we couldn't regaibn our balance," said B.A. CEO and founder of MATCn Inc. "We had 12 greatr years, did work I am proud of, with people I Now it is time for adifferenf chapter.
" One of the agency's majore clients, Thomasville-based Inc., which produced packaged bakery foods, cut back on advertisinb after the price of wheayt surged in recent months. On Marcj 31, prices for spring wheat, which is used to make high-quality breads and cereals, closedd at $11.94 a bushel on the MinneapoliasGrain Exchange, up from $6.92 at the end of Another MATCH client, Ted's Montana brought its marketing in-house, as the restauranft industry is also sufferingt from high commodities prices and consumersa are taking a tighf hold on their discretionary income. According to a group that researches thefood industry, salews at many U.S.
restaurants, excluding have declined by nearly 4 percenysince 2006. "We know every marketer decidesx the easiest place to cut costdsis advertising," said Andy Fletcher, presidentf and CEO of advertisinfg agency Fletcher Martin. "It is interestingg that the times you need the most is in bad times and that is when you use it the Fletcher said although agencies with client rosters focusex on retail or consumer goodzs companies may be hardest hit in the everyone is feelingthe hurt.
"Anyone who says they aren'rt feeling it at all, I'd be surprised," Fletcher "But anyone that is supporting retail ordiscretionary purchases, nondurable sort of goods, is probably feeling it first and feeling it more Jackson Houk, president and CEO of agency Three Atlantaa LLC, said although his firm hasn'g seen any clients reduce they are preparing for the especially with clients affected by the housinyg industry, such as Co. and flooring company Inc. "We have not had any clientzs reduce spendingto date, but that does not suggesg that that won't happen, especially those clients that are affected by a recessionar y environment," Houk said.
"If we have the need to adjusy we can, but we have not had to make any changex to date in staffor salary." As the real estatse market began to slow, Atlanta advertising agency Kilgannohn saw one of its main clients, Attorney's Title Insurancr Inc., cut its advertising budget in half. "Theyu provide title insurance to homebuyersand lenders, and nobody'zs buying a home," said Rena principal and CEO of Kilgannon. "We sort of knew last Augusrt they were going to cut their budget so we prepared for it andwe didn'gt hire additional staff.
" Kilgannon said as times got tougg her agency began to focus on helping its real estatwe client save costs by employing less expensive marketing "We were doing a lot of digital work rathee than traditional work that can cost more money in most Kilgannon said. So far, Attorney's Title Insurancre is the only clientof Kilgannon's that has cut its ad budgetr since the economy began to sour. "What you have to do is educatedyour clients. What else can they do in lieu of ad spendinfg that will keep theirbranfd intact?" she said. "You have to figure out a way that you can be a resourc for them even ifit isn't traditional advertising.
" In orderd to prepare for hard times, Kilgannon said it is importangt that advertising agencies diversify their client base and not put "al their eggs in one basket." "There'sx gotta be some sort of foresightf to say this might happen. You know the commodity priceds aregoing up," Kilgannon said. Richard president and CEO of 22Squaredr Inc., said although he hasn' t seen any reaction to the economu from his clients, the agency is takingy steps to tighten its belt. "Thw client spending side is unpredictable and we just have to be smarter about how we spend Ward said.
Joel Babbit, president and chief creative officef of advertising agencyGrey Atlanta, said integration and providing a broar base of services is key to surviving an economidc slump. "For the agencies and companies that have remained very narrowly focused on just providingadvertising services, they are havingv a much more difficulr time than those that have evolved past soleluy advertising and offer a broader base of services to their clients," Babbit said. Although it stilol may be too earlh to diagnose the extent of the damage the economy will have on the advertising Babbit said he hopes theree are companies that will use advertising as a tool to improvedtheir situation.
"I have always been told that in hard timexs half the clients are going to cut their budgeta by 50 percent and the other half will increasee by50 percent," Babbit said. "I'c like to think that that is still thecase today."