- Andrew McMains

NEW YORK The downturn in the U.S. economy has translated into client-spending cutbacks, fewer client referrals and a slowdown in review activity, according to a new survey of 246 agency leaders by Reardon Smith Whittaker.

As a result, more than three-quarters of the leaders (77 percent) feel that the economy has negatively impacted their agencies, with 14 percent of those characterizing the impact as "very negative." Only 22 percent of the sample said the economy had no impact on their businesses.

RSW, a Cincinnati-based consultancy that helps agencies hone their new-business approaches, polled the executives in August via an online questionnaire. Nearly half of the respondents, which included CEOs and chief operating officers, represented ad agencies, including DDB and Cramer-Krasselt. The rest hailed from a mixture of public relations shops, direct marketing specialists, marketing consultancies and media agencies, such as MindShare and Mediaedge:cia.

When asked how the economy has affected their shops, 58 percent pointed to a slowdown in business from current clients, 38 percent to fewer new-business opportunities and 5 percent to fewer referrals and networking opportunities. The findings underscore the need for agencies to more aggressively shop business-building ideas to clients, even if they're not solicited or fall outside the scope of a client brief, according to Mark Sneider, a managing director at RSW. "With the slowdowns in spending comes a slowdown in prospects having needs that have to be fulfilled," said Sneider. "You have to add value to the prospect's world to show them that you have something of consequence that might help them improve their current slowing situation. This is equally true of existing clients."

More than a third of the agency execs (39 percent) said at least 40 percent of their clients have spent less this year compared to 2007. And looking ahead to 2009, three-quarters of the respondents expect their clients to spend less or about the same, with most of those (61 percent) expecting spending to be flat.

Indeed, as bleak as the economy has looked this year, 2009 may be worse. Seventy-two percent of those surveyed don't think the economy has bottomed out yet, and 54 percent don't expect that to happen until the middle of next year, at the earliest. All of that makes for a marketplace that's "funky and a little scary, but I don't get a sense that [the respondents] are driven by fear," Sneider said.

"The smart ones and the aggressive ones -- just like the clients -- are going to win the day by making those investments and taking those chances and sticking with it, frankly. It's not a one-off game here. You've got to create the program and the plan and stick to it," he added.