Tuesday, January 6, 2009

Inside an ad agency today

The photo is taken in an empty office room on
the creative floor at Ogilvy in New York.
No, it's not my office.
I left my nice corner office more than 2 years ago.
I've been back and visited old friends several times.
Fewer and fewer of them are still there.
And this is how more and more
of the offices will look by the end of today.

Reports say hundreds of people are being laid off.
Some claim it's over 300 people who
are packing up their offices right now.
And it's not the first time.
The fact is that Ogilvy and most other agencies have been
laying off people consistently for the past 2 years or so.
It's not only because new technology have made us more productive.
Even if those who still have jobs are often seen working
longer days than ever and most weekends too.
Thereby presumably producing more.
No, the real reason is that budgets have been shrinking.
The proportion between media spend and what the agencies earn to produce
the work has changed over the past 4-5 years.
Clients wants more for their money, and fewer people to pay for doing it.
That is really hurting the industry.
Some may argue that it's fat trimming.
Which doesn't bode well for all new kids
right now in ad schools around the states.
Ad schools is a big and widespread business.

I always felt that US agencies perhaps where
a bit overstaffed compared to other countries I've worked in.
More people worked on the same assignment. But again, why not?
The budgets are also much bigger than anywhere else.
More people on the same assignment didn't
mean less work for each person either.
It created a competitive (some say political) environment
where people worked very, very hard and long hours to get their
work through internally before it was ever shown to a client.
This multi team approach is much rarer in Europe
as there never was enough money to pay for it.
US agencies are getting slimmer.
Both on the account side and the creative side.
And the big traditional shops,
despite now being multi disciplinary and media agnostic,
are losing all sorts of assignments,
and bits of their clients, to smaller specialist shops.
There's been some talk that digital shops would be hurt less.
But the indications are for lay-offs even there.
Again, clients demand more for less.
Because they can.
There's a surplus of ad agencies and ad people.
It's the buyer's market.
The shrinking economy doesn't help.
Everybody is cutting and few are investing.
The holding company system doesn't help either.
For several reasons.
Which I won't go into here.
But I'm sure some of you have your ideas
on what the problem with holding companies are.

For a bit more on the sad news go to:




Tore Claesson said...

This is my own comment. No further comments.

geo said...

i think i hereby resolve to never ever decorate my office again. so my office looks the same coming and going.