• by Masha Geller , October 11, 2001

Sorry to be the bearer of bad news, but today is full of negativity.

First, the ad world woke up to the news that Boston-based Digitas laid off 350 employees worldwide yesterday as it reported disappointing third-quarter financials and revised downward its revenue forecast for the fourth quarter.

The agency reported revenue of $51 million for the quarter ended Sept. 30, compared with $76 million for the same quarter a year ago. For the first nine months of 2001, revenue has dipped to $189 million, compared with $209 million for the same period a year ago.

Then, the Wall Street Journal reported that the ad world is "facing another wave of bad news: Client loyalty is fading." The article refers to the latest analysis by Pile & Co., a Boston consulting firm that tracks changes in ad accounts, which shows that several of the leading ad holding companies lost large amounts of business in the third quarter.

Skip Pile, the author of the analysis, told the WSJ that agency-client relationships "aren't what they used to be," adding that in the past, companies would keep their agencies an average of 11 years, whereas today the average account stays with an agency 2 1/2 years.

According to the article, the decision by marketers to fire or replace their ad agencies is the clearest sign of frustration with lagging sales. Companies that don't gain market share are more likely to put a new agency on the case.

I don't put much stock in forecasts of the future because I've yet to find a crystal ball that actually works, but I would like to know what you think the future holds for your business. Are things really this bad? Is there any hope?

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