Advertising Agency Competition

Number of agencies replaced or "on the bubble" illustrate volatility of ad industry.

Even in a slow week, the volatility of the advertising industry hits several major agencies and thousands of people in their pocketbooks. That’s evident year round when MediaPost Communications, an industry monitoring firm, issues its weekly list of corporations that are changing or planning to change advertising agencies. That’s comparable to a National Football League player or a network show being "on the bubble."

It doesn’t matter how long you’ve handled an account. It’s what-have-you-done-for-me-lately or can do for me tomorrow. It’s like being named coach of the year last year and being fired this year. They usually say it’s not personal (but often is), it’s just business.

The changes affect not only the agencies involved, but also subcontractors such as artists, printers, media buyers, models and all the other boutique firms that help produce ads, as well as their employees and employee families. The loss of a large account often means major job cuts.

In one relatively slow week in May 2008, MediaPost listed seven accounts valued at well over $200 million as being moved or "in review," which is like being "on the bubble."

The biggest appeared to be the $90 million Chivas Regal global creative account going from TBWA/Chiat /Day to Euro RSCG, an international network with offices in 233 cities in 75 countries.

Then there was the $60 million Burlington Coat Factory Warehouse account. Cramer-Krasselt was hired to handle the creative work and Initiative was hired to handle media planning and buying.

PetSmart put the creative work for its $40 million account "in review." Media Post said Leo Burnett would "defend" that account.

The values of the other four accounts were not listed but they probably ran well into the millions since they involved Quaker Oats, Michelin, TD Ameritrade and Tidy Cats.