US agencies keep cutting back as 2018 unfolds

Omnicom’s GSD&M is the latest US agency to announce a round of lay-offs, continuing a grim pattern for the start of 2018. Usually these unfortunate events are a slipped out at the end of the previous year, hoping no-one will notice.

The damage seems to be worst in the US (although maybe that means other countries, like the UK, are better at hiding it.

Usually the form seems to be that the agency is reshaping itself for a different future, implying that the people let go (often creatives) are dinosaurs from a disappearing era and that they’ll be replaced with a new raft of technologists, brain surgeons etc. who, strangely, don’t seem to materialise.

Such cutbacks though leave agencies even less able to compete with the people-heavy big consultants and other companies that are invading their space.

It’s an issue for clients too. One reason for the cutbacks is, presumably, that said clients are busily reducing their fees. But if they’re not careful they’ll end up with an agency sector that simply can’t do all the things it wants them too. Then they’ll be even more reliant on the consultants who already seem to run big parts of their business.

We’d like to be optimistic about 2018 but….

You May Also Like

advertising featured omnicom

About Staff

4 comments

  1. The agency downsizings and “juniorizations” have been chronic for more than a decade, undertaken despite the measurable growth in their Scopes of Work. So, agencies are doing more work with fewer people, and if “duration of client relationships” is a measure of quality, then it is evident that quality is going down — relationships are shorter and shorter.
    Advertisers persist in cutting fees despite the growth of workloads. This is easy to do, since neither advertisers nor creative agencies measure or negotiate workloads.
    Therein lies the Achilles heel of creative agencies — a horror of tightening up operational practices and documenting and measuring the work they do. Why? It’s anyone’s guess, but lurking in the background is the unfounded belief that being “managerial” will somehow destroy creativity. Ironically, they’re destroying their creativity anyway, by downsizing and juniorizing every year.
    Holding companies make this worse by squeezing their agencies for growing profits. So, agencies are caught between fee-cutting clients and profit-hungry owners. It ain’t a great place to be, strategically!

    Michael Farmer
    Author: Madison Avenue Manslaughter

  2. Michael… Excellent comment. It makes “Madison Avenue Manslaughter” even more relevant today than when it was first published a couple of years ago. I just re-pimped it on AdScam… “Cos, as you know, I am a prince.
    Cheers/George

  3. Simple Solution for ALL Agencies…

    1) Get your shit together. Know what it costs to be a “performance partner” for your clients. Be proud of what you sell. Hire Mike at http://www.farmerandco.com

    2) Help your client CEO with what they really need – increasing new incremental revenue (because Accenture is not focused only on marketing)

    3) Partner with custom software developers that will help you deliver new digital solutions (faster, ccheaper, better) thru an iterative procees towards optimization and new incremental revenue.

    Deliver more. Be more.

  4. “We need to lose fourteen pounds of ugly, useless fat. Let’s cut our head off.”

Leave a Reply

Your email address will not be published. Required fields are marked *

*

22 Shares
Share
Tweet
+1
Share
© Copyright 2013 More About Advertising, All Rights Reserved. With help of WPWarfare.com. | Cookies explained.