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Some bright spots for ad business despite down economy

United Arab Emirates: Thursday, May 28 - 2009 @ 17:00

Budget cuts and new challenges are serving as catalysts for new marketing communications approaches as clients are becoming more open to new ideas and experimentation, the survey found.

And while every agency responding from across the globe but one (Primus Advertising/ICOM, Accra, Ghana) said the economic downturn has had a negative impact on clients’ marketing budgets, clients that have increased spending are reaping rewards.

Two U.S. companies that boosted their budgets substantially, Oil Can Henry’s International, a quick lube chain, and NextGen Healthcare Information Systems, a provider of electronic healthcare information systems, are seeing meaningful market share increases.

Oil Can Henry’s, handled by Turtledove Clemens/ICOM, Portland, Ore., stepped up broadcast, direct mail and social media, offering unprecedented discounts, to retain base customers from trading down or out of the quick lube market while simultaneously incentivizing trade-down from shuttered auto dealers.

Said Chris Shepanek, CEO, Oil Can Henry’s,

“We increased our 2009 national budget by 60%. Turtledove Clemens developed a fully integrated marketing effort, and the results have been very encouraging. We are increasing market share, and we’re committed to staying the course. Many of our centers are experiencing very positive same center sales increases. Compared to our competition, we’re doing just fine.”

Nextgen, handled by Diccicco Battista/ICOM, Horsham, Pa., has increased online spending dramatically. “We are starting to use purls (personal urls) for email initiatives and have initiated a blogging campaign to complement a national PR effort,” said Mike Diccicco, agency president.

In the U.S. Hispanic market, Linda Gonzalez, president, ViVA Partnership/ICOM, said one client has doubled spending in three of its top markets, added traditional TV to the mix and started working on an innovative customer experience program. “Sales have increased significantly over the past three months,” she said. Another client has moved from traditional advertising to DRTV, radio and print with special training for call center operators and on-premise customer service.

ICOM agencies in every geographic region, Asia/Pacific, EMEA, Latin America and North America, reported more openness to a variety of new approaches for their clients within the past six months. Said Chris Lovell, group CEO, London-based Golley Slater/ICOM, “Clients are listening more to ideas that we have been trying to get them to think about for months. They aren’t so much about innovation as about harder-working tactics ideas, such as new media/digital and driving sales through lead generation techniques.”

Louie Laurent, president, ZLRIGNITION/ICOM, said his Des Moines, Ia.,-based agency has done more in the areas of online media buying, search and social marketing. For the Iowa Department of Public Health anti-tobacco program, a campaign that combined street marketing, online and viral along with traditional media generated so much controversy that it captured national attention on CNN and MSNBC (as well as awards).

“We decided as an agency to refuse to participate in this recession. We have moved dollars around to the benefit of clients,” Mr. Laurent said.

Asked to select which of three statements most closely represents their experience, more than half of the 40 survey respondents chose: “Budget cuts and new challenges have served as catalysts for clients to come up with new ideas and experimentation to market their products.” Eight other agencies selected: “Clients have not found it necessary to change their marketing tactics”; and seven agencies: “Clients believe that innovation at this time may be too costly and is risky.”

In response to another question, six agencies said clients’ budgets were down on average more than 49%; 15 said between 21%-49%; and 14 reported under 20%.

Many responding to the questionnaire said that clients are following a pattern typical during times of economic crisis of investing in promotion more, but they are also much more receptive to new media as well as events and programs that drive high quality engagement with customers.

For example, Estonian real estate and construction firm, Koger & Partnerid, has shifted the focus of its campaign, handled by Angels Advertising/ICOM, Tallinn, to drive sales of properties now discounted. “Before we had more image advertising,” said Maria Raudsepp, Koger & Partnerid’s marketing & retail manager. Now a special Website has been created to list available properties and those recently sold.

Commented Juan A. Arteaga, director of account planning & new business, Arteaga & Arteaga Advertising/ICOM, San Juan, “There has been a definite shift towards below-the-line, word-of-mouth and other direct efforts that generate immediate measurable results.”

Mahesh Sundaresan, Ikon Advertising, ICOM, Dubai said, “The need of the hour is to be a solution provider to clients rather than just be an advertising agency and that’s exactly what we are doing with our clients. The challenge is to stay engaged with the consumer through innovative channels that are cost effective.”

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Thursday, May 28- 2009 @ 17:00 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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