Sponsor (Jan-Apr 1958)

COST-TRIMMING I Cont'd from page 3 I the) continue to be important factors in client choice of agencies." The overwhelming majority of ageni 5 beads are today as concerned with maintaining the level of service offered to clients a> the\ are with cost-trimming. \~ a top I Vs executive told SPONSOR; "In a year like this when there's more account restiveness, few agencies feel tlic\ can afford to cut hack their stalls except for the historic reason of specific account losses. But this is a bad time to tamper with the structure of a successful!) operated agenc) ." There are historic precedents for the type of sweeping salarv cut thai K&E instituted this month. Y&R did it twice in the thirties and each time managed restitution by year-end. The philosophy behind it is that it is better to keep a full staff at lower salaries than lose hard to replace personnel. Views about the effectiveness of such a sweeping salan -slashing move are very mixed. A top-level K&E executive told SPONSOR he felt the move had been "statesmanlike and farsighted. We need the personnel to continue servicing our clients at peak efficiency, but costs had to be trimmed. Everyone in the agencx understands this. and chances are good that an early restitution will be possible." Outside K&E, agency management took dim views of the move, considered it a "far too public announcement of despair," according to the president of one of the top 30 agencies. The billings ratio While ratio of personnel to billings varies widely, agencies with the lowest, most profitable ratio of people to billing would actually be hardest hit by long-term set-backs in billings. "We've always tried to operate on the basis of having a few unusually talented people working in our shop rather than many pedestrians," says Guild, Bascom & Bonfigli's v.p. and general manager Gil Burton. "This theory has worked up to now, but it wouldn't give room for staff reduction. Salaries and bonuses represent about two-thirds of our gross income. Today we bill at a rate of $10 million a year with only eight accounts and it's been the rule In the Syracuse Market WSYR-TV Covers 70,000 More TV Homes Than Its Major Competitor This striking margin of coverage superiority, delivered by WSYR-TV alone, makes this station far and away the most effective and economical buy in a market where buying power exceeds $2l/i billion annually. ... and That's Before Counting the Big Bonus... WSYE-TV, Elmira N. Y. When you buy WSYR-TV, you also get its power-packed satellite, WSYE-TV, delivering big plus coverage of the Elmira-Corning area— a complete additional market at no additional cost! . . . and, incidentally, if ratings fascinate yOV, read the current ARB report for Syracuse, showing WSYR-TV's clear margin of superiority from sign-on to sign-off. Gn th, Full Siory from HARRINGTON, RIGUTF.R & PARSONS WSYR-TV Channel 3 ♦ SYRACUSE, N. Y. • 100 KW Plus WSYE-TV channel 18 ELMIRA, N. Y. lather than the exception for us to double our billing and personnel year after year." Two symptoms point up that agency management is more concerned with operating costs this year than at any time since the 1949 business setback: Management consultants and costaccounting firms such as agency specialist Ira Rubel of Chicago are doing a carnival business. "The number of agencies asking for our services has stepped up considerably over the past two years," says Norman Fowler, Ira Rubel partner currently working on a cost-accounting project at McCannErickson. "But we tend to advise against cost-accounting by media because it could prejudice agency recommendations." ( Ira Rubel told SPONSOR of steppedup inquiries by management of multimillion agencies during the past two or three months: "Concern over costs is at a peak. In the past two months, I've actually been responsible for the firing of some 500 agency people.") • Executive employment agencies have seen a new pattern of job-switching develop during the last six to eight months. Walter Lowen, Maude Lennox and other personnel specialists ac tive in ad agencies sum it up with this recent example: "One agency with two tv copywriters lone earning $20,000, the other $12,000 1 felt some loss in billings recently without losing any account. The agency fired the $20,000-a-year man, raised the $ 12,000-year man by $500 and a few weeks later hired a $9,500 tv copywriter because the work required two men. The only trouble is, when you're paying $10,000, you're not getting $20,000-value. Agencies should watch out for false economies at this time." Says Maude Lennox manager of tvradio personnel, Joan Sinclair: "Major agencies which had casting directors earning $12,000 are now letting the producers do their own casting and just keep on a gal at $90 to $115 a week for SAG reuse payment bookkeeping." The tv directors of two agencies where such streamlining was put into effect in the past three months view the results with mixed feelings. According to them, it takes up highpriced producers' time and takes each producer longer than it took the experienced casting director. Conclusion: A doubtful saving at best. ^ 19 april 1958