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

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Steve Bernstein, president of indicated that an unspecified number of future cuts may be The layoffs came in several departmentd during the course ofrecent weeks, he said. Bernstein cited the poor less client spending on advertising and reducee margins from billing as factors drivingthe layoffs. “I’ d say with everybody, there is a tightening of the beltwith everybody’sx marketing spend,” Bernstein said. The company’se most recent head count stood at253 locally, compareed with 351 in Marchn 2007. Bernstein-Rein, for many years No.
1 on the Kansa s City BusinessJournal ’s list of top area advertisinh agencies, has been supplanted the past two yearsw by Bernstein said layoffs after losingy accounts with and the in 2007, combined with natural attrition, resulted in the lower employeer count. “There’s no doubt losing Wal-Mart and USAA, and the economy have made us asmallerr agency,” Bernstein said. Gross incomwe was $45.1 million in 2008, down more than 9 percenty from its 2007 totalof $49.7 million. Bernstein-Rein, one of Kansas City’s best-known and longest-standing ad has hardly been alone in cuttingv jobs in theslipping economy.
Kansas City-based let go of abour 30 employeesin February, or 10 percentg of its total work force. Wichita-based cut jobs in its Kansaw City office, though it didn’g specify how many. In the public relations industry, whichu often intersects with localadvertisinvg firms, let go of about 13 employees in A year ago, well before the effect of the recessio was fully apparent, several agency executivezs said a slowing economy presented an opportunity becausse they expected clients to ramp up marketinv and advertising efforts. Few are sayinv that now.
“This isn’t the nicest environment thesee days,” said Pete Kovac, CEO of “I don’t thinki anyone realized how bad things were in September and October when budgetsa werebeing locked.” Industry executives said clients in the currengt economy also are less willing to commit to long-term authorizationz with a single company, opting insteacd at times for monthly or quarterluy engagements. “It’s soft. ... Clearlg every client got the letter from the CEO thatsays we’rs not going to stop, but there’s stuff to said Phil Bressler, partner with . Bernstei said clients also were moving away from payingmedia commissions.
A traditional and increasingly outdated the commissions pay a percentage of a media buy back to the He said that method of payment has fallen out of favore with clients who suspect that their advertisingb is pushed intoineffective media. Alternate billing methodx haven’t always provided the same high margins asmedia “We’ve let the margin disappear too much,” Bernsteinh said.