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Tuesday AM September 8th, 2009

Consumers are buying fewer magazines amid the recession and the availability of plenty of free reading material online. Advertising agencies are becoming “leaner and meaner,” according to an article in the current issue of Adweek. Ed Mayberry reports.


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Adweek senior reporter Andrew McMains says advertising agencies, which place commercials on television and radio and print ads in newspapers and magazines, have been going through challenging times.

“You can draw a parallel to the consumers and how they’ve pulled back on their discretionary spending.  Big corporations on a much larger scale — the Proctor & Gambles, the Unilevers, the Anheuser-Buschs — are concerned about the very same things.  And so the most optimistic people among the parent companies of the agencies are saying ‘no growth until the middle of the next year.”

Classified advertising has been overtaken by the Web, and ad agencies that handle accounts for industries hard-hit in the recession, such as auto manufacturers, big box stores and travel-related industries, are themselves hard-hit.  McMains says even when consumer confidence returns, ad agencies will be different.

“The skill set required to do what you do online is different that what you would do to, say, create a print advertisement or a television commercial.  The bottom line is that what it costs to create, say, a Web site or a banner ad is pennies on the dollar on what an agency can charge to produce a Super Bowl TV commercial.  And again, you could make a corollary to the housing market where things just got a little out of whack in terms of the value of what real estate was worth.”

McMains expects ad agencies to be smaller when things rebound.  Ed Mayberry, KUHF-Houston Public Radio News.

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