nj ad agencyThe NJ ad agency environment has gone through extreme changes in the last ten years. But that’s nothing new for businesses who locate west of the Hudson River, so close to New York City.

The Internet Bust

While web companies were concentrated in Silicon Alley and Silicon Valley, they were also located in lots of smaller regions. One ad agency opened for business in New Jersey December 20, 1999. At the time, they thought their only worry was the Y2K issue. Little did they know that a much larger crisis loomed on the near horizon.

The agency mentioned above had four Internet-related clients and 2 others who were more traditional. By 2001, they were already feeling the loss of 2 of their 4 Internet companies. But the attacks of 9/11 affected even one of their largest traditional clients, who was forced to freeze their marketing budget for nearly 6 months to assess the damage.

While the Dot-Com bust affected this NJ ad agency’s Internet clients the most – all 4 were out of business by 2002 – other more traditional clients were affected as well. One client was a telecom capacity exchange. A large part of their business was web companies. When the web died, lots of companies who were servicing Internet businesses died too.

One report stated that New York ad agencies had laid off approximately 20% of their staff by 2002. NJ ad agencies had similar results.

The Recession of 2008

Being outside of New York City, NJ ad agencies look for business that’s “off the beaten path.” We typically don’t get clients like the big package goods brands. Those are more comfortable spending their marketing money with New York agencies. New York is very close by after all. Typically, these agencies go after home builders, regional banks, small manufacturers, hospitals and service companies.

There are lots of smaller manufacturing industries in New Jersey that prefer a NJ-based ad agency. Plumbing supply manufacturers, building material companies, and others have found New Jersey to be a good place to do business. But you can imagine what happened to these companies when the Great Recession began. They got hit hard and subsequently had to lay off some of their staff.

In the advertising agency world, New Jersey is known as a great place to get into pharmaceutical marketing. There are tons of pharmaceutical companies within easy driving distance from Summit, New Jersey (sort of the middle of the north Jersey area). The recession of 2008 also put the squeeze on these pharmaceutical companies. Direct to consumer (DTC) pharmaceutical advertising had already been thrown under the bus years before; but now the whole industry is suffering from commodity status. Once again, this was led by New York ad agencies who saw a way to help their bleeding bottom lines. They raised their right hands and pronounced themselves pharmaceutical marketing experts; leaving the New Jersey ad agencies to look for business elsewhere.

NJ Ad Agencies Remain Nimble

Being smaller than their New York counterparts, NJ ad agencies are able to be more flexible; probably because costs are a little lower. They certainly can pay their employees less thanks to the much more agreeable commute. This is a major advantage to agencies in New Jersey. And there are others:

  • Varied client categories
  • Less cut-throat environment
  • More relaxed leadership
  • More loyalty from agency owners

Because of the above advantages, New Jersey ad agencies enjoy more loyalty from their employees. Once someone has switched to New Jersey from New York and stopped that hideous commute, they never want to go back. And, once they’re working in a less cut-throat environment, they won’t easily be talked back into the New York ad agency scene.

In a perverse way, the bad economy in the first decade of this century may very well be helping every NJ ad agency who’s survived the downturn. Now they’re more nimble; they’ve cut costs to their critical levels; and they’ve focused on what they do best. We think the next decade looks very promising.

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