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Ad execs not holding their breath for more business in 2010

I came across a great piece today on the abysmal year its been for advertising firms that have seen their revenues plummet and have instituted mass layoffs. (Not much different from any other major company out there in 2009, come to think of it. But that doesn’t mean it stings any less.)

I highly recommend you read the whole article in the Wall Street Journal. But the gist of it is that ad firms saw unprecedented growth and creativity in the early part of this decade with the dot-com explosion only to finish out the decade with unprecedented cuts and downsizing (if not the total failure) of businesses.

And 2010 doesn’t look like it’s going to be much better, says Maurice Levy, chief executive of Publicis Groupe, one of the world’s largest ad companies.

Ad spending (which fell an estimated 10 percent in the U.S. this year) is expected to remain flat at best in 2010. Some say spending could slip again as far as 2.6 percent in the U.S.

Where did all the car ads go? Ad spending by U.S. automakers fell by 30 percent in 2009 and ad executives don’t expect the companies to return to their pre-recession advertising any time soon.

Lastly, while Washington may be bailing out the Big Three and other major companies, stiffer regulations passed by Congress are limiting the advertising world. In 2010, legislators may consider passing regulations on food advertising aimed at children, among other laws.

So I wonder what the long term effect will be for ad firms? In the earlier part of this decade, we saw larger agencies swallowing up smaller ones — but in 2009 those behemoth firms were the ones that had to make the biggest cuts in their workforce.

The last few years have been characterized by the popularity of boutique firms and specialty shops.  Nowadays it’s rare to find a major company that doesn’t have a contract with at least two advertising firms. Will boutique firms be the way of the 2010s? Or will the cycle start all over again in a few years when (if) the economy picks up?