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Ad agencies face a miserable summer as staff pay penalty for cutbacks

London ad agencies have already taken a hit, with both Wieden+Kennedy and DDB dumping staff (among many others no doubt) and now New York’s finest are also suffering with Adweek reporting that McCann Erickson in New York is about to wield the axe.

McCann is surely feeling the pressure of owner Interpublic’s attempt to make sense of Chicago-based DraftFCB’s loss of $1bn SC Johnson, IPG’s second agency network, which wipes $40m of net income straight off the bottom line and may well mean the closure of numerous DraftFCB offices around the world that only exist to handle the household products maker.

The big marcoms companies these days are essentially conglomerates; you might be doing very well in your bit of the empire but if something goes amiss elsewhere, you suffer too.

And McCann is trying desperately to re-invent itself as a creative agency under CEO Nick Brien and London and New York chairman and CCO Linus Karlsson. It might not work.

The big holding companies have all told their shareholders that they expect six per cent growth or above this year, despite a slowing global economy.

Cynics would say that this can only be achieved by slashing staff, thereby ultimately weakening their ability to deliver what their clients want.

Which will lead to yet more people saying their business model is skewed. And who’s to argue?

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.
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