Carat and THE MISTAKE

So I am a Carat alum, and have been watching closely the tempest surrounding the error of sending PowerPoint and Word files of their plans for a layoff.

I'll leave it to others to rehash the error, I just wanted to point out my personal belief in the rank and file Carat team, including those being laid off. Carat has had a challenging year as it adjusts to the realities of the new media world, and indeed decides whether it is to be a full service shop or a media agency. But there are good people there, make no mistake. The cause of layoffs at an agency is generally the result of unsuccessful biz dev developments, not the team itself. I have heard some strange stories about Carat new biz pitches of late, but the thing is, at least they were trying new things. In a world where you try new things, some don't work.

The Carat model in other countries was very focused on efficiency -- being a low cost media provider while still offering full client service. In the US the model was a bit different, as indeed the realities of the US are different. In the US, many companies preferred to get their creative and media in the same shop at least on the digital side, as indeed creative and media are intertwined in digital -- it can be impossible to separate the two. But we all know that.

Point is, it appears that Carat is now trying to adopt the Euro model in the US, which will require adjustments. I dunno if it will work, but then in digital one can only predict for about the next ten minutes into the future, and even then one has a 50% chance of being wrong.

Like all agencies, they have periods of ups and downs -- I know of no agency that doesn't have at least somewhat of a parabolic growth curve. They are currently in a down, and so it could come as a surprise to no one that layoffs were imminent. Your agency may be in an up, and jolly good for you. But it won't last forever. Nothing does.

Obviously this is a big cock up, but I think we should all be focusing on our friends at Carat that may have lost or be about to lose their jobs. This is not to say that we should forget the mistake but rather to say that there are excellent people at Carat being layed off who may be looking for work and we should help them find it.

I am sure that the CPO at Carat is tormented enough by others at the company and indeed herself about this mistake. All agencies go through this sort of thing, it is just that in this case the docs were released.

I have my own opinions about the directions that Carat has taken since I left, some good some not good. But that is to be expected. In the meantime, let's all help those affected by the layoff find new work in agencies that may be faring better at the moment.

Because what goes around comes around. Carat will be up again in the not too distant future, and your shop may be the one experiencing business softness. If that happens, I am sure you would rather have your industry colleagues helping you out than passing around typoey Power Points.

Thanks for reading, and don't forget to write.

Carat Insight Reports on Global Ad Spending

So...the dreaded R word. It's always scary in the ad biz to acknowledge a recession, but truth beats ignorance, and this new report from Carat Insight, entitled "Advertising Progression Through a Recession" is a great analysis of the state of the economy and how to cost effectively build your brand despite tightening sales and resources.

For those of you not familiar, Carat Insight is a special unit within Carat that analyzes critical trends and developments in the media space globally so that the company and its clients can capitalize on them effectively. I worked at Carat, and while I was never on this august team, I can attest that these people are smartypantses, and I mean that in a very complimentary way.

I'm not going to regurgitate the entire report, but here are some highlights.

Carat notes that the economy is the number one concern of US adults, as demonstrated in this Nielsen survey data:



Concomitant with that info is the fact that consumer confidence is WAY DOWN over even just a year ago.



Interestingly, many Americans blame the Iraq War for key economic issues:



Now, none of that stuff may come as a surprise to you. But what about these items:

1. Consumers are moving to lower end and club stores, as is evidenced in this survey data from ChangeWave:



2. Interestingly, until the most recent recessions, advertisers used to GROW spending during downturns, albeit at slower rates than during growth cycles.



That was a surprise to me, perhaps because during my entire career (which is covered by those two recessions, ad spend always declined.

3. And there is the PIMS study growth matrix, which analyzes the effects of ad spending changes on market share in upturns and downturns. This graph is a pretty comprehensive analysis across a large variety of industries.



Net net, advertise and gain share.

Anyway, I have barely scratched the surface of the excellent content available in this study. Download it now and you'll see how valuable it is.

Thanks for reading, and don't forget to write.