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March 13, 2006

Comments

Jeff B

I guess that answers the age old question: Is it worth investing a lot in Advertising? Ok, different context, but point remains.

Lenny B'

If you put the $1,000 in equal amounts ($200) across each fo the companies, the decline would be even steeper. Closer to an 8% or 9% decline.

Carrie B

This has and always will be a tough tough place to make money from a shareholder or owner basis. The margins are just too thin and getting thinner every day as clients and consultants push further and further on fees. There is no scale in this business what so ever. Get a big new account, you need to go out and hire new people to manage it. You lose some business, by the time you get around to right-sizing, you've already carried overhead too long without a return. It's an industry too quick to hire ("We need to get these ten people because we won such and such an account." and too slow to fire ("I don't want to let them go just yet. They're good and I think we're going to win a new auto account next quarter." You just can't keep an effective or efficient cost basis.

Unlike other professional service providers (law, consulting, etc.) there's not the possibility of making the big score that will underwrite other activities. At law firms three or four lawyers with a couple of paralegals and effectively go after a multi-million dollar settlement that will result in millions of fees. Not the case in advertising. In consulting, there's the idea that you're not paying for time but for access to brilliant minds that you couldn't hire on your own. Less and less is that the case in advertising. It's just a tough business from start to finish.

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