Three of London's top advertising agencies have made significant redundancies this week in reaction to the economic downturn hastened by the events of September 11.
HHCL, Abbott Mead Vickers.BBDO and M&C Saatchi have all laid off staff in response to the climate.
HHCL & Partners has laid off 13 members of staff including an account manager and two creatives. Simon Burridge, chairman of HHCL, told shots.net that the move was in part a restructure to align resources more closely with clients needs. "Also, like every other agency in town we're not entirely immune to economics. Rather than a direct affect of the World Trade Center attacks, it's more to do with the knock on effect on business confidence."
Abbott Mead Vickers BBDO issued a statement to confirm that the agency had made 18 staff redundancies, predominantly from creative services and support functions. According to the agency, the cut-backs are "early action in preparation for tough market conditions in 2002," and no further cuts are planned. "In spite of the significance and sadness at having to part company with some staff, our people principles and commitment to top quality work and service hold true. As AMV re-gears itself for the challenges ahead, we remain resolute and confident in our work, our clients, our people and in our ability to punch our weight in a difficult market," said Michael Baulk, chairman of the agency.
Reports suggest that M&C Saatchi will be making fewer than 15 people redundant in spite of British Airways - which has frozen all its advertising - being one of the agency's major clients.
HHCL's Burridge advised against clients cancelling advertising: "It's very important to go on communicating during a recession. It's when things are difficult that you need to advertise more." According to Burridge, some clients are taking advantage of cheapening airtime to leverage more value from advertising. "Nevertheless, clients by and large are less willing to spend than they were this time last year," he continued.
Walter Campbell, the creative director whose start up company CDD Testa lost the backing of Italian agency Armando Testa last week, sees the current climate as an opportunity for strong creative ideas, rather than the reverse. "Everything is pointing towards more creativity," he said. "People will look long and hard at how they're spending their money. We all know that just being on TV has an impact on the market but it's better if you do something that people enjoy, remember, and talk about - and if you're spending less money you need to spend it in that way." Campbell anticipates more low-grade advertising will surface in coming months, but argues that the contrast with the well-filmed work with strong ideas will reap rewards for clients.
"Now is a time to invest in quality. People need it more now than ever," he said. "There's even a space now for someone clever to come along and address the issues in the travel industry. It depends how brave your thinking is."
Andy Law, founder of St Luke's, says agency fears of losing new business are responsible for weaker creative thought. "If you fear losing business then you become expedient," he says. "That's what creates poor work. Not clients. Creativity is its own tool and there's no point in making a business tool blunter just for the sake of it."
Some observers hint that agencies may be taking advantage of the economic climate to make restructures, when billings and turnover remain constant.
Law criticises the management structure of multinational agencies: "The conglomerate nature of our business puts our financial concerns in the hands of accountants, lawyers and not creative people. This serves the creative aspect of this business very poorly. It's a knee jerk reaction to lay people off to keep the money going. It demonstrates to me that people aren't investing enough. It's the people that make the business spin."
