Advertisers Voice Concern Over Agency Cutbacks

23 October 2001

Alan Rutherford, media chief at Unilever, warned ad agencies last week that cutting staff was a false economy, as it could harm the industry in the future.

“I would say to the agencies that it’s tough but you cannot afford to lose talent,” he stated during a tele-conference between five industry figures assembled by AdAge Global and Richmond Events.

“I think we saw that some ten years or so ago when agencies didn’t retain talent and didn’t train people and consequently went through three years or so of really tough times … if you believe that your companies are going to spearhead brand communication in the future – and become more important – then you need to maintain investment now and hold on to people.”

Rutherford was not the only speaker worried at agency cutbacks. Ruby Anik, vp–advertising and media at retail chain Best Buy, voiced further anxiety: “I’m really concerned at the impact on agencies as we’re seeing a constant erosion of resources. That has moved beyond getting rid of resources that were not very good to resources that are now hurting [agencies] because of Wall Street and financial pressures.”

The discussion also touched on the current trend for consolidated cross-media ad deals, such as the $300 million tie-up between Procter & Gamble and Viacom. These were branded “a solution looking for a problem” by Jon Mandel, co-managing director and chief negotiating officer at MediaCom, since “they don’t understand the difference between selling time and space and marketing a product to get more sales for that product.”

Mandel also dismissed Interpublic Group’s new centralised media negotiations network Magna Global as “probably the most brilliant thing I’ve heard from an agency in trying to win business, that does absolutely nothing for the client.”

The panel had been due to convene at the US Marketing Forum in New York on September 12, but it was postponed following the attacks on the city.

News source: AdAge Global