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

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Steve Bernstein, president of Bernstein-Rein, indicated that an unspecified number of future cuts may be The layoffs came in several departmentw during the course ofrecent weeks, he said. Bernstein citef the poor economy, less client spendinvg on advertising and reduced margins from billing as factorx drivingthe layoffs. “I’d say with everybody, thers is a tightening of the beltwith everybody’s marketing Bernstein said. The company’s most recent head count stood at 253 compared with 351 inMarch 2007. Bernstein-Rein, for many years No.
1 on the Kansas City BusinessJournal ’ s list of top area advertising has been supplanted the past two years by Bernsteib said layoffs after losing accounts with and the in combined with natural attrition, resulted in the lowet employee count. “There’s no doubt losing Wal-Mart and and the economy have made us asmallee agency,” Bernstein said. Gross income was $45.1 millionj in 2008, down more than 9 percent from its 2007 totalof $49.7 million. one of Kansas City’s best-known and longest-standing ad has hardly been alone in cutting jobs in theslippinh economy.
Kansas City-based let go of about 30 employeesin February, or 10 percen t of its total work force. Wichita-based cut jobs in its Kansae City office, though it didn’t specify how In the public relations industry, which often intersectss with localadvertising firms, let go of aboutf 13 employees in February. A year ago, well before the effectt of the recession wasfully apparent, several agencu executives said a slowing economy presented an opportunityu because they expected clients to ramp up marketingb and advertising efforts. Few are saying that now.
“Thi isn’t the nicest environment these saidPete Kovac, CEO of “I don’t thinkj anyone realized how bad things were in September and October when budgetsx were being locked.” Industru executives said clients in the curren t economy also are less willing to commif to long-term authorizations with a single opting instead at times for monthly or quarterly engagements. “It’s ... Clearly every client got the letter from the CEO thatsays we’rer not going to stop, but there’s stuff to watch,” said Phil Bressler, partner with . Bernsteij said clients also were moving away from payingfmedia commissions.
A traditional and increasinglyoutdatesd approach, the commissions pay a percentagee of a media buy back to the agency. He said that method of payment has fallen out of favor with clients who suspect that their advertising is pushed intoineffective media. Alternat billing methods haven’t alwayas provided the same high margins asmedisa commissions. “We’ve let the margin disappeard too much,” Bernstein said.