This week's feature on the diary of a redundancy (p24) is written
by a creative agency executive, Matt Pye, but recounts experiences that
are increasingly common among the media community. Redundancy may have
hit a little later on the media side of the business but the blow is
It has often been said that recessions are quite cleansing, stripping
out all unnecessaries (be they badly run companies, over-generous
expense accounts or people) and heralding a return to the important
basics. In media's case, those basics are the demonstrable and
cost-effective provision of what clients actually want.
Most media chiefs say they are bracing themselves for a difficult few
months of making job losses, slashing bonuses and pulling investments to
meet stringent requirements laid down by their parent companies. For
some this is the first time since selling out to one of the big holding
companies that their cosy family culture is being really undermined by
"I'm being forced to cut my training budget," wails one chief for whom
such provisions are a fundamental part of his agency's culture.
Many agencies have already been forced to cull staff and last week's
billings figures from MMS would suggest such measures are urgent. The
figures show five of the top ten media companies losing more than 10 per
cent of their billings, with Universal McCann (down 26 per cent) and
Starcom Motive (down almost 19 per cent) worst affected.
Of course, the natural ebb and flow of business means the billings
figures will only be a snapshot and Starcom Motive has, for example,
added about £25 million of billings since the start of the year,
much of which has probably not filtered through (Universal has won
£12 million but lost £16 million of business since
Not surprisingly, some agencies have been quick to point out that the
billings figures are not an accurate reflection of the state of their
business. Fair enough.
So it's definitely time for media agencies to join the creative
community in releasing their income data so that we can get a clearer
idea of true performance.
In the meantime, the MMS billings figures conjure a bleak picture,
particularly when you consider that media companies are run with
ball-breaking cost management and stripped clean to the bone of the
fripperies that have been known to afflict their sister creative
But the one area where media agencies have allowed costs to spiral is in
pay structure, with the frenetic poaching of staff over recent years
driving wage costs to often untenable levels. So it's hardly surprising
that staff cuts are top of the agenda now that income appears to be
slowing down. Surely the wave of redundancies should encourage agencies
to take a sensible view of poaching and salaries once the market picks
up so that a workable equilibrium is reached across the industry.