The consumer debt crisis and the anti-Chen rallies have dragged down an economy that was already faltering.
Economy Stumbles, Consumption Shrinks
The rise of the China market is obvious to all, and in 2006 the westward march of Taiwan industry continued, with many middle class workers heading across the strait for greener pastures. International companies are focused on the Greater China region, and the shrinking budgets allocated to Taiwan have made its marginal status even more obvious.
Consumer spending has been severely dampened by a series of financial crises and an unstable political situation. The real estate market is bustling, but nearly every other industry is struggling. The car and banking industries are down, which has hurt advertising revenues. Few new models have been introduced, which has taken the spring out of the step of Taiwan's economy.
If you can ask an advertising agency how their business is, they all have the same answer: "The advertising business is really going downhill!" Mergers and layoffs have been a constant throughout 2006.
Leo Burnett Vaults to Number One
Apart from Leo Burnett, revenues for the top five advertising agencies have all fallen.
Leo Burnett posted gross revenues of NT$388 million, moving up from the number two spot to edge out 3-year reigning champion JWT . Leo Burnett's performance in 2006 was quite remarkable. In the past the company seldom pitched new cases, but in 2006 the company performed steadily to defeat a host of rivals and win Chunghwa Telecom's 3-in-1 case (Taiwan Fixed Network, Mobile Phone and ADSL), worth a total of NT$500 million. The company has specialized for a long time in below-the-line marketing, which positions them perfectly to meet the current needs of advertisers.
Moving up one position into second place was Dentsu. However, the company's gross revenue was down 5%, mainly due to the sluggish overall economy, which caused clients to become conservative with their budgets. Dentsu has the largest staff of any Taiwan advertising agency with a total of 209 employees, and so its personnel costs are certainly a burden.
Ogilvy and Mather, with gross revenues of NT$300 million, came in third again after a two-year absence. The company gained a number of new local clients last year, but major international client Unilever cut its budget and the company ended the year 6% below its 2005 level.
McCann laid off 16 employees to trim up its workforce and ended the year in fourth with NT$260 million, down 9% from the year before. Although 上奇’s major clients Vibo and Lexus both released new products, it fell to fifth place with NT$235 million in revenues.
Bates Asia was out of the top 20 in 2005, but in 2006 it racked up a series of successes. It went after the clients of its rivals and added Diageo, American Life Insurance and Kolin to its roster, racking up NT$160 million in revenues, an increase of 38%, or NT$44 million more than in 2005. The company leaped to 13th place overall, a shining performance in a tough year.
Developing Integrated Marketing Communications Still a Priority
In order to adapt to the hostile environment, many agencies chose to reduce staff and expenses. Along with taking care of their existing clients, agencies also seized every opportunity to pitch new clients and develop new opportunities.
In addition, many companies have begun to understand the importance of integrated marketing communications and have created design, event, and Internet departments, offering a wider array of services for clients to choose from.
There were also a number of personnel changes, with large numbers of top management and creative directors heading to China. The downturn in the industry led to unusually high turnover rates. After 2006, Taiwan's advertising industry appears to be taking stock and waiting for better days.
《消息來源：動腦雜誌372期/2007年4月》
