Rapp Collins and Leo Burnett chop payroll

<p>SINGAPORE: Leo Burnett and Rapp Collins have implemented measures </p><p>to cut costs to combat Singapore's worsening recession. </p><p><BR><BR> </p><p>In a pre-emptive move, Burnett retrenched eight people based on </p><p>forecasts that the ad industry would contract next year. </p><p><BR><BR> </p><p>"This decision has nothing to do with (what has happened) this year but </p><p>next year," said John Borzi, managing director of Burnett Singapore, who </p><p>predicted that the city's agencies would experience a 15 to 25 per cent </p><p>revenue fall in 2002. </p><p><BR><BR> </p><p>"Our clients are being cautious when it comes to spending money on </p><p>advertising so we're going to be cautious with them," he explained. </p><p><BR><BR> </p><p>"I don't think the economy will rebound until the third quarter of next </p><p>year." </p><p><BR><BR> </p><p>Borzi predicted that the deepest cuts in advertising spend would occur </p><p>among companies in the finance, telecommunications and technology </p><p>sectors. </p><p><BR><BR> </p><p>Burnett has around 85 staff following the retrenchments in its creative, </p><p>account service and administration departments. </p><p><BR><BR> </p><p>Rapp Collins, which retrenched four staff in June, has vacated its Club </p><p>Street office after only a few months there, partly so it could cut </p><p>costs by sharing space with sister company DDB. </p><p><BR><BR> </p><p>"It's been a fairly tough six months and things aren't going to get </p><p>better," said Paul Gotham, managing director of Rapp Collins. </p><p><BR><BR> </p><p>"Sharing backroom operations - human resources, finance and so on -- is </p><p>more synergistic." </p><p><BR><BR> </p><p>The other reason for moving in with DDB was because management felt the </p><p>two companies would work better together if they shared offices. </p><p><BR><BR> </p><p>"There was an element of out-of-sight, out-of-mind," said Gotham. </p><p><BR><BR> </p><p>Despite the recession, Gotham predicted that Rapp Collins would increase </p><p>revenues next year because it expected to win some regional business as </p><p>the network expanded across Asia. </p><p><BR><BR> </p><p>He also argued that clients would be spending less on above-the-line </p><p>advertising during a recession but would continue to spend on direct </p><p>marketing to generate immediate sales. </p><p><BR><BR> </p><p>"When things get tough media budgets are cut (which impacts on ad </p><p>agencies) but clients then look to run direct marketing campaigns which </p><p>benefit agencies like Rapp Collins," he said. </p><p><BR><BR> </p><p>"In 1997, when I was at (direct marketing agency) Finex, we actually </p><p>increased our revenue even though it was during the Asian financial </p><p>crisis," he added. </p><p><BR><BR> </p><p>Singapore is experiencing its worst recession since 1965. The economy </p><p>experienced a 5.6 per cent drop in gross domestic product for the third </p><p>quarter, year-on-year. </p><p><BR><BR> </p>