Marketers and Agencies Split on 2012 Prospects

Marketing leaders—in contrast to their more buoyant agency brethren—generally seem more cautious than optimistic about growth in the new year. And, of course, who would know better than those who control the purse strings? The latest illustration of the disconnect between marketers and agencies regarding the industry’s prospects for 2012 is a new poll from RSW/US in which a greater percentage of agency types than marketers predict growth in the economy and marketer spending. When asked, for example, if the economy is on the uptick, 65 percent of the 114 agencies that participated said yes, compared to just 41 percent of the 100-plus marketers. Also, the percentage of marketers who answered no (35 percent) was more than twice that of agencies (17 percent). The marketers included Pfizer, Reckitt Benckiser, Frontier Airlines and 1-800-Flowers, and agencies McCann Erickson, Ogilvy & Mather, StruckAxiom and Slingshot. Given that 2011 represented improvement from 2010, some shops feel that the growth spurt can only continue, said Mark Sneider, president of RSW/US, a Cincinnati-based consultancy. But with so many factors beyond their control—including unemployment, real estate stagnation, the European contagion and rising commodity costs—such expectations appear unrealistic. “There’s some irrational enthusiasm that may be going on with some agencies, and it needs to be tempered somewhat,” Sneider told Adweek. “Maybe they’re wearing the rose-colored glasses because they’re forgetting where they came from.” Not all agency CEOs are that upbeat, however. Some, including Deutsch/LA CEO Mike Sheldon and Merkley CEO Alex Gellert, recently predicted lumpy, uneven industry growth at best. Their forecasts are more in line with the sentiments of marketing executives like Frances Allen at Denny’s and Tim Van Hoof at State Farm. In separate interviews, Van Hoof said State Farm’s 2012 media spend would be “consistent” with last year’s, and Allen said Denny’s’ would be just a bit higher. What’s more, Allen attributed the increase to inflation in media prices, not an influx of new dollars. “With TV cost inflation in double digits, I actually think Optimedia has done a great job of negotiating for us for 2012,” said Allen, Denny’s CMO. “But it’s still significantly more expensive than in 2011.” Full-year media spending totals for 2011 are not yet available from Nielsen. But in the first 10 months, Denny’s had spent more than $52 million and State Farm about $425 million. (The totals for the restaurant and insurance brands in 2010 were $66 million and $455 million, respectively.) Those figures don’t include online spending. The generally lower expectations for the year among marketers also is consistent with the findings of another new poll, from AdMedia Partners, an M&A firm in New York. In December, AdMedia questioned more than 7,300 leaders at marketing and media companies, and 57 percent said they expected this year’s economy to be about the same as last year’s. Also, the percentage of respondents who expected improvement (36 percent) declined markedly from last year (58 percent). The good news? Only 7 percent think the economy will weaken. Indeed, whether you feel rosy or cautious about the ad marketplace, the conversation still pivots around growth. And that’s certainly an improvement from the worst of the recession in 2008.

Brand Marketing

Marketers and Agencies Split on 2012 Prospects

Poll finds brand leaders see more economic red flags in new year than their shop peers

Andrew McMains

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Andrew McMains