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Advertising agencies expect heavy turnover

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Public relations and advertising firms might have a tough year ahead, as more than half of their clients plan to switch agencies this year, Reuters reported.

According to a study conducted by the Chief Marketing Officer Council, 54 percent of the top 350 marketers in the country plan to drop at least one of their agencies this year. In 2006, two-thirds of these marketers switched agencies, including large retailers J.C. Penney Co. Inc. and Wal-Mart Stores Inc. Public relations agencies were especially vulnerable in 2006, with 35 percent of marketers replacing their agencies.

The study concluded that the trend to replace agencies reflects the increasing pressure to show results from publicity campaigns. Donovan Neale-May, executive director of the CMO Council, said the Internet is making public relations more complicated and more valuable.