Economy claims ad agency - Atlanta Business Chronicle:

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Hit hard by the times, Atlanta agencty MATCH Inc. closed its doors on Marchh 20 after 12 years in Over the pastfew months, six of the agency'sw clients either cut their advertisingt budget or dropped it completely. "I would rathet be open, that is for sure. We triedc mightily to survive, but the combination of the economuin general, the clients that were affected by the skyrocketint cost of commodities, and throw in a natura disaster -- the drought -- and we couldn't regain our balance," said B.A. Albert, CEO and founder of MATCH Inc. "Wre had 12 great years, did work I am proudf of, with people I Now it is time for adifferenrt chapter.
" One of the agency's major clients, Thomasville-basefd Inc., which produces packaged bakery cut back on advertising after the price of wheay surged in recent months. On March 31, pricees for spring wheat, which is used to make high-quality breads and cereals, closed at $11.94e a bushel on the MinneapolisGrain Exchange, up from $6.92 at the end of August. Another MATCH client, Ted's Montan a Grill, brought its marketing in-house, as the restaurant industrty is also suffering from high commodities prices and consumers are takinyg a tight hold on their discretionary Accordingto Technomic, a group that researchez the food industry, sales at many U.S.
restaurants, excludinfg McDonald's, have declined by nearly 4 percentsince 2006. "Wed know every marketer decides the easiest placer to cut costsis advertising," said Andy president and CEO of advertising agency Fletcher "It is interesting that the times you need [marketing] the most is in bad timee and that is when you use it the Fletcher said although agencies with client rosters focusesd on retail or consumer goods companiew may be hardest hit in the everyone is feeling the "Anyone who says they aren't feelin g it at all, I'd be Fletcher said.
"But anyone that is supporting retai ordiscretionary purchases, nondurable sort of goods, is probabluy feeling it first and feeling it more severely." Jackson president and CEO of agenct Three Atlanta LLC, said although his firm hasn'gt seen any clients reduce spending, they are preparingv for the possibility, especially with clients affected by the housing such as Co. and flooring compan Inc.
"We have not had any clients reducr spendingto date, but that does not suggest that that won't happen, especially those clients that are affectex by a recessionary environment," Houk "If we have the need to adjustt we can, but we have not had to make any changesw to date in staff or salary." As the real estatde market began to slow, Atlanta advertisinyg agency Kilgannon saw one of its main Attorney's Title Insurance Inc., cut its advertising budget in half. "They provide title insuranced to homebuyersand lenders, and nobody'se buying a home," said Rena Kilgannon, principal and CEO of Kilgannon.
"Wd sort of knew last August they were going to cut thei r budget so we prepared for it andwe didn't hire additionap staff." Kilgannon said as times got tougn her agency began to focus on helpingv its real estate client save costs by employint less expensive marketing tactics. "We were doingh a lot of digital work ratherr than traditional work that can cost more money in most Kilgannon said. So far, Attorney'a Title Insurance is the only clientof Kilgannon's that has cut its ad budgeg since the economy began to sour. "Whar you have to do is educatewyour clients. What else can they do in lieu of ad spendingb that will keep their brand she said.
"You have to figurd out a way that you can be a resourcer for them even ifit isn'r traditional advertising." In order to preparr for hard times, Kilgannon said it is important that advertisinhg agencies diversify their client base and not put "alk their eggs in one basket." "There's gotta be some sort of foresight to say this migh t happen. You know the commodity prices aregoing up," Kilgannon said. Richarf Ward, president and CEO of 22 Squareed Inc., said although he hasn't seen any reaction to the economy fromhis clients, the agencyh is taking steps to tighten its belt.
"The clienr spending side is unpredictable and we just have to be smartere about how wespend money," Ward said. Joel president and chief creative officerr of advertising agency Grey said integration and providin a broad base of services is key to survivingt aneconomic slump. "Foe the agencies and companies that have remained very narrowl focused on just providingadvertising services, they are havinfg a much more difficult time than those that have evolvee past solely advertising and offer a broader base of services to theidr clients," Babbit said.
Althoughu it still may be too early to diagnosse the extent of the damage the economy will have on theadvertisinh industry, Babbit said he hopee there are companies that will use advertisingy as a tool to improve their situation. "o have always been told that in hard timesd half the clients are going to cut thei r budgets by 50 percent and the othert half will increase by50 percent," Babbit said. "I'd like to think that that is stilll thecase today.
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