bsw ranking 2009: Much remains the same - agencies in the wake of the crisis

The 54 advertising and specialist agencies in the bsw, which celebrates its 75th anniversary in 2010, generated total gross operating income (GOP) of around CHF 334 million in 2008, slightly more than the 2007 figure of CHF 331 million. In 2008, they were responsible for advertising money totaling around two billion francs for their clients. This corresponds to around two thirds of all advertising investments made via agencies in Switzerland. It should be borne in mind that only around seven percent of all advertising agencies based in Switzerland are bsw members.

>To the ranking of advertising and specialty agencies

For the second time since 2008, media agencies are also publishing their own ranking in the bsw. Media agencies have a different business model to advertising agencies (media planning and media buying in addition to consulting services/strategy) and are therefore not directly comparable with them. The ten media agencies in the bsw generated gross operating income of CHF 45.8 million in 2008. They invested media funds worth around CHF 1.1 billion on behalf of their clients, making them an important link in the communications industry's value chain.

>To the ranking of media agencies

Pleasing first half of 2008, unpleasant development for 2009
Thanks to a strong first half of the year, the member agencies of bsw leading swiss agencies were able to close 2008 at the same level as 2007. Like the economy as a whole, communications agencies also suffered from the global financial and economic crisis that began in the third quarter. 2009 did not bring any noticeable improvement in the situation, and bsw agencies expect their income to fall by up to ten percent in the current year.
Despite signs and forecasts of recovery, agencies still do not really believe that the crisis is over. Advertising clients are still cautious and are reluctant to increase their advertising investments. In a survey, the vast majority of agency bosses predicted stagnation, if not a further slight decline in income. Agencies are also being called upon to act even faster and more flexibly. The challenges of the near future are essentially the ever more rapidly changing economy, the globalization of brands and markets, cost pressure and profitability as well as the associated structural adjustments and investments, according to the report.

View advertising as an investment, not a cost factor
The business conduct and behavioral culture of many clients has deteriorated dramatically during the crisis. The cost pressure on agencies has taken on unprecedented dimensions. This is not least because the finance and purchasing departments are increasingly dictating the rules and "buying advertising" instead of the marketing departments. As a result, marketing communication is being degraded from a strategic instrument of the company to an expense item in the operating account. However, successful companies do not view advertising as a cost factor, but as an investment.
A negative sign of the current situation is the often pointless competitive presentations (pitches), which are only about "cost optimization" (international media pitches have recently even been held in the style of an internet auction). The fact that many clients mistakenly believe that they can demand all rights from the agencies without incurring any costs is also an unpleasant side effect.
The discussions between bsw leading swiss agencies and the advertising client association SWA regarding the contractual framework conditions, on which the two leading industry associations are making good progress, are also part of this context. Good quality must be well remunerated - including copyrights and rights of use. Dumping prices are not conducive to promoting the quality of advertising. Successful advertising is not mass-produced goods, but strategic expertise tailored to the individual factors and needs of customers.

Globalization of markets and brands
Unfortunately, the globalization of markets also has the negative effect that decisions for formerly Swiss brands are often no longer made in Switzerland. In this situation, it is gratifying that some large Swiss agencies are also able to operate successfully on the international market, according to the association. However, the Swiss communications industry would welcome it if Swiss companies were to increasingly use Swiss agencies again.

Cross-media communication strategies and further growth of online media
The present is cross-media and online media are experiencing the highest growth rates. In Switzerland, digital media dominate according to a new study 33 percent of the population. The crisis in the print media is certainly also due in large part to the public's changed media behavior. Traditional media continue to be an indispensable and strong element for cross-media campaigns. Agencies have also made the transition to cross-media agencies. The so-called "classic" agencies no longer exist in this form.