News & Press / May 27, 2008

As Tough Times Spread to Many Industry Segments, ICOM Agencies

ROLLINSVILLE, COLO.--The soaring costs of food and fuel are capturing the biggest headlines, but across the U.S. many more industry categories are being affected. An informal survey of ad agency members of the ICOM (www.icomagencies.com) independent network found that the economic slowdown is touching everything from fast food and casual dining restaurants to real estate and new homes to cars and appliances to trucking and travel. “It was only a matter of time,” said Mike Diccicco, president, Diccicco Battista Communications/ICOM, Horsham, Pa.

“Without a break in the gas and food price spiral, every sector of the economy is going to be affected.”

Marketing communications agencies often are among the first to detect shifts in business plans as they work with their clients to adapt marketing and sales programs to reflect changing times.

“Creating meaningful value propositions for client communications is a challenge especially in today's environment,” said Bob Morrison, ceo, The Morrison Agency/ICOM, Atlanta, and ICOM North America regional director.

For example, despite the rising cost of food, supermarkets can be in a good position because people aren’t eating out as much, and consumers are spending more on special treats from the grocery store, said Juan A. Arteaga, director, Arteaga & Arteaga/ICOM, San Juan. Consumer paint sales are holding steady even though trade paint sales are slipping because homeowners are using paint as an inexpensive way to redecorate, according to Amber Bryan, team leader, The Phelps Group/ICOM, Santa Monica.

While some transportation-related categories have been hit hard, public transportation services, such as commuter trains, are serving as less expensive alternatives to cars, and auto servicing businesses are finding that car owners are interested in regular maintenance to keep their cars in good condition to maximize gas mileage. Several agencies indicated that many clients in the business-to-business space and in healthcare are moving full steam ahead. And while some clients are cutting their spending as a precautionary measure, others remain committed to their budgets while making sure the money works even harder for them.

“One of our important roles is to make sure our clients’ money is well spent,” said Rick Skaggs, COO, Weyforth-Haas/ICOM, Overland Park, Kan. Diccicco Battista/ICOM, for example, is working with the local Applebee’s Neighborhood Bar & Grill restaurant to help expand the target audience from family dining to young, single professionals and to gain a higher level of brand awareness by promoting its major cause marketing activity.

Weyforth-Haas/ICOM is highlighting in messages economical attributes of its clients’ products such as Caterpillar’s more fuel efficient Cat On-Highway truck engines and Goodyear’s more fuel efficient tires. Agencies are finding that they are recommending more Web advertising and expanding promotions to reach beyond the primary target audience. Clearly though, some areas are hit hard, both consumer-driven segments such as travel and new homes as well as business and industrial, such as trucking. And there is a ripple effect on other industries.

When people don’t take vacations, adventure outlets, tour companies, local restaurants and shops are hurt too, and when new home sales are slow, it affects everything from the sale of large and small appliances and home furnishings to gardening supplies. A slowdown in the trucking industry, devastated by high fuel prices, also affects the sale of commercial tires, huge truck engines and the like. “It’s a complicated situation,” said Stan Bornstein, president, DiBona, Bornstein & Random/ICOM, Boston.

“Our clients are both being hurt and are benefiting. Essentially, it's about the volatility of the situation and the struggle to adjust from both a pricing and a spending point-of-view.”

ICOM (www.icomagencies.com), Rollinsville, Colo., is the most balanced of the international independent advertising and marketing communications networks, with more than 70 member agencies in 50-plus countries.

Founded in 1950 as the National Federation of Advertising Agencies, ICOM offers clients an alternative to the huge and increasingly similar agency groups. The network has billings of US$2.4 billion and gross income exceeding US$390 million. The network’s North American region includes offices all across the U.S. in 21 cities. ICOM 1649 Lump Gulch Road, Rollinsville, CO 80474

Contacts:

Nancy Giges nancy@icomagencies.com 1-914-683-5108

Gary Burandt burandt@icomagencies.com 1-720-261-4829