Staff numbers down at large ad agencies

WESTERN Australia’s five largest traditional advertising agencies have shed more than 25 per cent of their staff during the past two years, with market leader Marketforce experiencing the biggest decline.

WA staff numbers at the top five agencies have declined from a peak of 413 in mid 2008 to 340 last year and 305 currently, research for WA Business News Book of Lists has found.

The shrinkage during 2009 was largely attributed to the effects of the global financial crisis, which led to a sharp fall in advertising volumes after record activity in 2008.

The latest data shows the industry leaders continue to get leaner despite a recovery in economic conditions.

In the past year, Marketforce has cut its staff numbers by 20 to 100, The Brand Agency has cut numbers by five to 70, and 303 Group has cut 10 staff to 60.

WA’s other big firms, Linc Integrated Marketing and Communications (40) and Adcorp Australia WA (35), have been stable over the past year following large cuts to staff numbers in 2009.

While the industry overall has been through a lean period, the better performers include relatively young agency Meerkats (established six years ago) and digital agencies like Market United (which has grown to be the state’s fifth largest ad agency with 37 staff) and Longtail.

The changing fortunes in the industry were illustrated by the IKEA account, which until recently was held by Marketforce but is now shared between Meerkats and MU.

“We’ve weathered the storm better and are still growing,” Meerkats chief Gavin Bain told WA Business News.

His firm’s staff numbers have grown slightly over the past two years to 26.

MU chief executive Sandra Riches said her staff numbers plateaued over the past two years, which was a shock after the rapid growth it had achieved since its establishment in 2002.

Like others in the industry, she sees signs of growth.

“The last couple of months, everyone seems to be pulling out the budget,” Ms Riches said.

Marketforce general manager Carrick Robinson said three factors had affected the firm during the past two years.

The GFC was an opportunity to streamline the business and reduce numbers with the aid of technology “to ensure we were strong in a low revenue environment”.

The loss of a state government non-campaign contract and a changing client mix had also led to cuts in staff numbers.

Mr Robinson acknowledged a couple of high-profile losses like IKEA was another factor, but said the market had definitely hit bottom, judging by the number of pitches Marketforce was involved in.