Where is there hope for creative careers in the corporate world during a recession?

It's not a surprise that creative departments and agencies suffer when businesses and organizations are not doing well enough to keep the basic parts running. When companies are stretching all of their money across the board just to get by and stay open, they're not going to pay for the frills and lace that makes them fancy and unique. Even if it is 'for the best of the company,' it kills me to read the poetic statement released after each layoff that they paid some poor communications employee who is still left to write.

I was inspired to write about creative employee layoffs when I heard the announcement of Target Corps decision to layoff eight percent of its corporate marketing department this past Thursday. Since I am looking for a public relations career in the Twin Cities, I was upset to learn the news. Even though the retailer reported declining profits eight quarters in a row, spokeswoman Lena Michaud said the layoffs were unrelated to the economy or Target's financial performance. Instead, the layoffs are part of a "reorganization to make sure marketing is aligned to the needs of the business," Michaud said. The laid-off workers will get full pay and benefits through Dec. 14, severance based on years of service and the option to continue their health insurance for 12 months at their current employee rate, Michaud said.

Two years ago, before this current recession the PR, ad and marketing industries thought they were working their way back up to the booming business days of the 1980s. However, this Summer the Star Tribune wrote about the funk the creative industries are falling into. "The recession changed all that. Some agencies saw layoffs. Some saw revenues decline. Some struggled for new business. Some treaded water. Very few have thrived. 'Flat is the new up,' became the mantra for bottom-line financial growth, but even flat is an ambitious goal when corporate clients are slashing marketing and advertising dollars." (David Phelps, June 22, 2009)
Another hard hit to the creative industry in the Twin Cities came this Summer when Carmichael Lynch laid off a number of its employees. "Like everyone else we had to pare a few people," said Doug Spong, President of Carmichael Lynch, the third-largest agency in Minneapolis. "There isn't anyone else in town who hasn't." Held primarily by the new business from Subaru and stable business from longtime clients like Harley-Davidson, Carmichael Lynch saw revenues increase by 5 percent last year to $63 million. "Agencies are a reflection of their clients, and we've been very fortunate to have a brand like Subaru that is at a price point that consumers can afford and is a brand that appeals to the consumer," Spong said.

"About one-third of our clients are cutting back because business is tough. One-third are maintaining or increasing their budget and one-third is just kind of flat," said Carmichael Lynch CEO Steve Wehrenberg. Wehrenberg said the agency's food and packaged goods clients are doing fine as penny-pinched Americans stay at home to eat their meals while its hard-hit financial sector clients like the Hartford are doing less. On the other hand, Campbell Mithun learned just this summer that H&R Block, a client of nine years, is taking its $120 million book of business to another agency. "It's definitely not a growth year for us unless a miracle happens," Wehrenberg said.

Martin Williams had two rounds of layoffs, totaling 30 people after the agency lost a telecom client and was an unsuccessful bidder for financial services giant J.P. Morgan. Annual revenue of $62 million was down 1.6 percent in 2008, according to Adweek Media. "We saw this coming and made adjustments," said CEO Tom Moudry. "We've tried to control costs, travel, office functions, summer parties, subscriptions. If there's a silver lining, it's that we've taken a look internally and restructured to be faster."

On the upside, the Olson agency actually grew in the heart of the economic downturn. The company went from 156 employees in 2007 to 186 employees in 2008. John Olson, founder, boasts of 11 consecutive years of double-digit growth, including an increase from $25.1 million in 2007 to $35 million last year. In the past year, Olson has landed clients such as Memorex, Carlson Country Inns & Suites, Lee Jeans, Chinet and United Health Group's Ovations division. "We're not chasing everything," Olson President Kevin DiLorenzo. "Sometimes you have to say no."

Colle+McVoy saw its 2008 revenues reach an eight-year high at $26.3 million. Interactive billings increased by 300 percent and now account for 30 percent of the agency's revenue. "We're extremely fortunate. We have no clients in the (battered) automotive, financial or health care sectors," said Colle Chief Executive Christine Fruechte. The rise in social networking means more work from its interactive clients, which include ESPN, Yahoo, Aveda and the Manhattan Toy Co.

Online seems to be proving the way creative industries can still grow in these tough times. "The people who are doing well have a specialty in new media for a direct one on one contact with the customer like social media and interactive media," said St. Thomas's Purdy. "It's an intriguing toy to a lot of clients." The Associated Press agrees. Just this month they wrote that "signs of an online revival are emerging even while advertising in print and broadcasts remain in a slump that has triggered mass layoffs, pay cuts and other upheaval."

"You can draw a straight line from the time when people hear an ad on the radio or television to when they search for that company on the Internet," said David Karnstedt, chief executive of Efficient Frontier, which helps manage ad campaigns on search engines. These trends will give Internet advertising 19 percent, or nearly $87 billion, of the worldwide ad market in 2013, up from just 4 percent, or about $18 billion, in 2004, according to PricewaterhouseCoopers and Wilkofsky Gruen Associates. That would make the Internet the third-largest marketing medium. Television is expected to remain on top, with $168 billion, or 36 percent of the global ad market in 2013, up from 35 percent in 2004. Newspapers would still be No. 2, but their $92 billion in advertising revenue is projected to account for 20 percent of the global ad market, down from 28 percent in 2004. (Star Tribune, Michael Liedtke, October 20, 2009)