Bernstein-Rein lays off staff, warns of more - Kansas City Business Journal:

iqukikofor.wordpress.com
Steve Bernstein, president of indicated that an unspecified number of future cuts maybe coming. The layoffss came in several departments durinbg the course of recent he said. Bernstein cited the poor economy, less clienrt spending on advertising and reduced marginsx from billing as factors drivinghthe layoffs. “I’d say with there is a tightenintg of the beltwith everybody’s marketing Bernstein said. The company’s most recent head count stoof at253 locally, compared with 351 in March 2007. for many years No.
1 on the Kansaw City Business Journal ’zs list of top area advertising has been supplanted the past two yearsx by Bernstein said layoffs after losing account with and thein 2007, combined with natural attrition, resulted in the lower employee count. “There’zs no doubt losing Wal-Marty and USAA, and the economy have made us a smaller Bernstein said. Gross income was $45.q million in 2008, down more than 9 percent from its 2007 totapof $49.7 million. Bernstein-Rein, one of Kansasx City’s best-known and longest-standing ad agencies, has hardlt been alone in cutting jobs in theslipping economy.
Kansas City-basesd let go of about 30 employeesin February, or 10 percentr of its total work force. Wichita-based cut jobs in its Kansas City thoughit didn’t specify how many. In the public relations industry, which often intersects with localadvertisint firms, let go of about 13 employeesz in February. A year ago, well beforre the effect of the recession wasfullh apparent, several agency executivexs said a slowing economy presentee an opportunity because they expected clientse to ramp up marketing and advertising Few are saying that now.
“This isn’t the nicesgt environment these days,” said Pete Kovac, CEO of “I don’tg think anyone realized how bad thingx were in September and Octoberf when budgets werebeing locked.” Industry executives said client s in the current economy also are less willingb to commit to long-term authorizations with a single company, opting instead at times for monthlh or quarterly engagements. “It’s ... Clearly every client got the letter from the CEO thatsays we’ree not going to stop, but there’z stuff to watch,” said Phil Bressler, partner with . Bernstein said clients also were moving away from payingmedia commissions.
A traditionalk and increasinglyoutdated approach, the commissions pay a percentagre of a media buy back to the agency. He said that methoed of payment has fallen out of favoe with clients who suspect that their advertisinb is pushed intoineffective media. Alternate billiny methods haven’t always provided the same high margins asmediaa commissions. “We’ve let the marginn disappear too much,” Bernstein said.