Independent Shops See Bad Moon Rising

Global poll reveals waning confidence in the economy

The leaders of independent creative agencies around the world have turned from optimistic to pessimistic regarding the economy and its impact on the industry.

In its latest quarterly confidence poll, Worldwide Partners, an association of more than 80 indie shops, found that overall confidence declined in September compared to June and agency honchos expect economic conditions to slide further next year.

Pessimism was highest among shops in Europe, the Middle East, and Africa, but U.S. agencies also feel gloomier about the economy now. The only rosy region was Latin America, where agencies gained confidence since the summer and expect an even better marketplace in the spring.

Factors contributing to the mostly dark outlook include marketers shifting from annual to quarterly budgets and taking longer to pay agencies; the threat of government regulation on marketing; and marketers demanding more services at the same level of pay, according to Al Moffatt, president and CEO of Worldwide Partners.

"Agencies are having to do so many things for clients these days. It's an on-demand world," said Moffatt, citing in particular the rise in digital marketing, including social media efforts. Those demands, coupled with marketers holding the line on spending, have increased agency expenses and naturally lowered their profit margins.  

Worldwide Partners began tracking the pulse of its member agencies in September 2010 through a series of questions about market conditions, new business activity, hiring trends, income, and government regulation. The responses are converted into an Advertising Confidence Index that compares the relative health of the business from quarter to quarter.

The latest poll involved 81 leaders from shops that employ, on average, about 50 staffers. Member agencies include Butler, Shine, Stern & Partners in Sausalito, Calif.; Wong, Doody, Crandall, Wiener in Seattle; WE Marketing Group in Shanghai, China; Asahi Advertising in Tokyo; and The Union in Edinburgh, Scotland.