Advertising firms in the Springfield area may see a boost in spending among marketers in 2011, if national forecasters are correct. Some local agencies already are reporting promising signs.
According to MagnaGlobal, a media and advertising industry researcher and forecaster, advertising spending in the U.S. dropped by 5 percent in 2008, and by 16 percent in 2009, before rebounding 4 percent last year. MagnaGlobal projects 2 percent growth to $173 billion in 2011 advertising buys, which would equal 2003 levels.
Other national forecasters predict ad sales increases between 2 percent and 4 percent, according to a December report on www.adage.com
Springfield-based Noble Communication Inc. added six new accounts in the last six months of 2010, according to Keith Acuff, CEO of the national advertising agency.
Acuff expects three of the clients – 3-D printing company Stratasys, upscale restaurant chain Smith & Wollensky Steakhouse and countertop manufacturer VT Industries – to land in the company’s top 10 accounts by spending volume.
The new contracts provide Noble hope for a turnaround, Acuff said, after annual capitalized billings fell incrementally to a decade-low of $120 million last year. The firm recorded $260 million in 2005 billings – the number ad agencies use to estimate total ad spending.
Noble, which has a client roster that includes Tyson Foods and Otis Spunkmeyer, projects 2011 billings to reach $130 million in 2011, an increase of 8 percent.
“We’ve been more aggressive in going after accounts,” Acuff said. “Perhaps we didn’t respond to the downturn in the market as quickly as we needed to. It’s really been an aggressive effort on our part to up our sales volumes.”
Acuff said he saw the market begin to really turn sour in fall 2008, and through the first half of 2010, the company picked up only a couple of small accounts. He said Noble didn’t lose what he would consider big accounts during that time, but many clients cut back on their spending by up to 30 percent.
Acuff points to a renewed effort to bring in new clients by employing a nontraditional approach.
The pitch at Smith & Wollensky Steakhouse, for instance, didn’t deliver strictly an advertising plan.
“We brought them a plan that reworked their menu, created in-store collateral, started a different happy hour, and it had a very small advertising component,” Acuff said, adding that Noble teams have assisted the Boston-based chain with its social media marketing on Facebook and Twitter platforms. “It’s not just advertising anymore, it’s saying to the customer, ‘What can we do to stimulate your audience?’”
To combat the recession, Springfield-based ADsmith Communications started a research division, which includes President Angela Smith and two employees, and in-house video production.
Smith said she and her 12 employees have worn many hats in recent years, and that should position the firm well for the future. After flat sales in 2009, last year came in 6 percent ahead of ADsmith’s positive annual projection, and Smith expects 10 percent revenue growth in 2011. She declined to disclose sales totals.
Smith said recent customer queries have been more promising than the ones she’s encountered the last couple of years.
“I think a lot of companies, for a while, were calling businesses like mine just wanting free advice,” Smith said, adding that she has 42 regular advertising clients and expects to add three within a month.
The firm, which has a client list that includes the Ozark Empire Fairgrounds and RGG Law Firm, is planning to add at least three part-time personnel before summer.
Matt Sellmeyer, president of Schilling/Sellmeyer & Associates, is doing more with less, too.
The Springfield agency has not replaced a couple of key members, including its original partner, Don Schilling, who died of cancer in September 2009, and an account executive, who moved away 14 months ago.
Looking back, he calls 2008 the company’s worst year in recent memory, but billings have increased by 5 percent in each of the last two years. Sellmeyer expects flat 2011 sales compared to 2010, though he declined to disclose billing totals.
“Everyone just has smaller budgets. Budgets are tighter, and (companies) are trying to do more with less,” Sellmeyer said.
Some promise is in the few companies that want to advertise and be in front of competitors when the market returns.
“We are seeing a little bit of light on some smaller businesses trying to get ahead of the curve,” Sellmeyer added.[[In-content Ad]]