• Reuters, Thursday, August 16, 2007 11 AM

Signs indicate that an economic downturn may be on the horizon, but advertising agency BBDO, whose fortune relies on the advertising budget of big, economic climate-affected clients like GE, Bank of America and FedEx, says companies should think twice before slashing their marketing budgets.

In an interview with Reuters, BBDO CEO John Osborn admitted that "sometimes those experimental budgets do go" in an economic downturn, "however, I would urge our clients to do almost the opposite," he said. Indeed, experimental online advertising campaigns may be the best alternative for marketers during a downturn. Osborn said the impact of interactive Web contests and sweepstakes may increase during times when budgets are limited because "they are incredibly targeted."

That said, these ad initiatives are unproven, compared to older media like TV, radio and print; indeed, older-school companies have a history of airing on the side of caution anyway, which could result in a squeeze for agencies' newer media departments-in which many ad holding companies have invested heavily.

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