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

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Steve Bernstein, president of Bernstein-Rein, indicatedf that an unspecified number of future cuts may be The layoffs came in several departments during the course ofrecent weeks, he said. Bernstein citesd the poor economy, less client spending on advertising and reducefd margins from billing as factor drivingthe layoffs. “I’d say with everybody, therd is a tightening of the beltwith everybody’s marketing Bernstein said. The company’s most recent head countg stood at 253 compared with 351 inMarch 2007. for many years No.
1 on the Kansas City Business Journakl ’s list of top area advertising agencies, has been supplanted the past two yeares by Bernstein said layoffs after losing accounts with and the in combined withnatural attrition, resultedf in the lower employee count. “There’s no doubt losing Wal-Mart and and the economy have made us asmalle agency,” Bernstein said. Gross income was $45.1 million in 2008, down more than 9 percent from its 2007 totalof $49.7 Bernstein-Rein, one of Kansas City’s best-known and longest-standingv ad agencies, has hardly been alone in cuttingt jobs in the slipping economy.
Kansas City-based let go of abougt 30 employeesin February, or 10 percent of its total work Wichita-based cut jobs in its Kansas City though it didn’t specify how In the public relations industry, which oftehn intersects with local advertising firms, let go of about 13 employeee in February. A year ago, well before the effect of the recessiojn wasfully apparent, several agency executives said a slowing economy presented an opportunity because they expected clients to ramp up marketint and advertising efforts. Few are saying that now.
“This isn’f the nicest environment these days,” said Pete Kovac, CEO of “Ik don’t think anyone realized how bad thingz were in September and October when budgetz werebeing locked.” Industry executives said clientsx in the current economy also are less willing to commit to long-termm authorizations with a single company, opting insteadd at times for monthly or quarterly engagements. “It’x soft. ... Clearly every client got the letter from the CEO thatsays we’rre not going to stop, but there’s stufgf to watch,” said Phil Bressler, partner with . Bernstein said clientx also were moving away from payingmedia commissions.
A traditionalp and increasinglyoutdated approach, the commissions pay a percentags of a media buy back to the agency. He said that methoxd of payment has fallen out of favor with clienta who suspect that their advertising is pushee intoineffective media. Alternate billing methods haven’t alwayxs provided the same high margins asmedia “We’ve let the margij disappear too much,” Bernstein said.