How to Save the (ad) World

By Matt Van Hoven 

Since no one else (who has the power) seems to be saving your jobs (e-mail matt@mediabistro dot com if you’re a decision maker who doesn’t fit in this group), we came up with a very short list of ideas for turning this thing around.

Actually, they’re your ideas (you know who you are). We just stole them from another post and we expanded briefly on them. Let’s start something here &#151 post your industry-saving thoughts below, and check out what we had to say after the jump.

We’re having a hard enough time reporting on the layoffs after layoffs after layoffs, and it’s a safe bet to say you’re sick of hearing about them. So let’s do this thing.

More: “MTV’s Solution for Saving Water is Pretty Nasty


Damn, we can’t find the post where people left their comments. But the two we can remember seemed to make sense &#151 maybe you lot can iron out the issues. They’re pretty basic, and though imperfect, could prevent layoffs.

Idea 1: For agencies in a holding company network, act like baseball teams do when trying to fill positions. Need a junior copywriter at agency A? Pull one out of Agency B,C, or D. And so on. This way you can modify your teams for any given need, like baseball (and hockey) organizations do with their farm teams.

Idea 2: We were speaking with a wise source who noted that when an agency is bought by a holding company, (in many cases) the HC requires that 10 percent of its earnings go back to the coffers. So, in exchange for adding, say, WPP to your Web site, an agency loses one tenth of its money.

If an agency pulls in $300 million a year (gross), they’re going to have to give the HC $30 million. And there’s no way in hell the HC will let that revenue go. However, there might be a solution from the government’s end. Figure the agency will have 30 percent of its annual gross earnings taxes (we have no idea what that annual figure is, but let’s say 30 for now) taken away. That’s $9,000,000 the government takes. But what if we tax the difference of gross revenues minus the holding company payoff?

The difference of taxing 30 percent of $270 million rounds out to be a savings of $800,000. Add that up over a few good years, compound interest on it in a government bond-like account (and give the interest to the govt to offset the taxes they’re not getting), and you’ve got xx months of money saved up for an economic downturn.

Why would the government be up for this? Because the money isn’t going into the agency’s pocket &#151 and it prevents tax payers from paying unemployment. Back up the need for such a fund with research showing that businesses cut back their marketing expenditures during an economic crisis and viola.

OK, so this doesn’t help the current situation (Idea 1 does a better job, but only for holding co. held agencies), but either way, we need to start talking about this. What do you guys think? Any whizz-bang ideas can be posted below.

We won’t begin to presume the feds would allow this kind of situation, and obviously it would take some good lawyering to setup. But with the right boundaries, options like this could supplement your average holding company owned shop. Or not; we’re just throwing out ideas.

Advertisement
Advertisement