Last week's annual advertising awards gala, the Addys, was a litmus test for the tepid ad market in the Washington region. The event drew 780 entries from area firms, about the same as last year. But that was 35 percent fewer than in 2001.

Lee Proctor, president of the event's sponsor, the Advertising Club of Metropolitan Washington, gave a simple reason for why an industry that thrives on recognition sought less of it.

"It's the economy. There was less going on," Proctor said. "We were actually ecstatic with what we got this year. When the drop happened last year, that's when the biggest disappointment was."

While local agencies express cautious optimism for the rest of the year, some firms are struggling to get new clients.

The market is improving for some but "for others maybe it's not so good," Proctor said. "It's kind of static right now."

The agencies' financial hemorrhaging seems to have eased, but they continue to look for ways to save money.

In Alexandria, Williams Whittle Cos. employees got raises this year of 5 percent or less instead of the usual 5 to 12 percent, said agency chief executive Rob Whittle. The 30-employee agency subleases one of its three buildings in Old Town Alexandria and has taken a hard line in other areas, refraining from hiring workers and negotiating lower charges for employee cell phones.

In the next few weeks, staffers will attend a party, which Whittle described as a morale booster, at a company receptionist's house rather than at a restaurant. Homemade hors d'oeuvres will be served.

"You can have as much fun or more at the receptionist's house than at Clyde's," Whittle said.

Whittle does see signs of an upswing. In the first quarter, billings were up 10 percent from the same period in 2002, and profit is up more than 50 percent for the quarter, he said. Some of the agency's clients have been insulated from the recession and its aftermath, such as home builder Ryan Homes and American Service Center, an Arlington Mercedes-Benz dealer.

"I call it a categorical recession," Whittle said. "There are certain business sectors that are booming and doing great. There has been a net increase for us. It's due more to new business or to strong categories getting even stronger."

Some agencies have stuck with traditional cost cutting. Two weeks ago, McLean advertising giant Arnold Worldwide laid off 13 workers -- 10 percent of its workforce -- because of a slowdown in ad spending among clients such as McLean consulting firm BearingPoint Inc., said President Kenneth C. Umansky.

"We didn't lose any clients, clients are just closing down," Umansky said. "Since our basic assets are people, we were forced to take some action. This makes us a lot meaner and leaner."

Arnold hopes for a rebound this year after it recorded flat revenue last year, Umansky said.

"Hopefully, the economy will bounce back, and we'll be off to the races," Umansky said.

District ad firm Kircher & Associates has added some positions this year after trimming about 20 percent of its staff, down to 20 employees, last year, chief executive Jean Whiddon said. The firm felt a delayed reaction to the economic downturn since many of its clients are trade associations that didn't cancel events immediately after the Sept. 11, 2001, terrorist attacks because they had made large investments in them. But groups began to curb spending last year after they started to feel the financial pinch among their members, Whiddon said.

"Trade associations feel it after their industries feel it," Whiddon said. "The membership goes forward with their marketing but as they respond to decreased sales volume, it could have an impact the following year."

Kircher sees a rise in ad spending this year, Whiddon said. But the small firm is still watching its own spending. The company continues to send staffers to seminars, but they are required to share what they learned with other employees. Employees are also offered the incentive of getting a percentage of new business that they bring to Kircher, Whiddon said.

"We want everyone to feel they're a salesperson for this organization," she said. "We're not trying to create pressure. We're trying to create a real sense of ownership."

In Bethesda, the ad agency Dan Rosenthal Co. recently hired a consultant to help it establish a brand to market to clients through mailings and other public relations efforts, said agency President Dan Rosenthal.

"One of the things that we've been telling clients is that when the economy is bad, that's the time to be more aggressive," Rosenthal said. "That's why we've been spending the money on marketing to new business. We're struggling like any other business, but we're seeing results because of it."

Ads and Ends

The Advertising Club of Metropolitan Washington handed out 93 Addys and 172 Citation of Excellence awards to 65 companies and ad agencies. The Dan Rosenthal Co. was the top winner with 20 Addys, two special judges awards and 19 citations of excellence for clients including the International Spy Museum, Mastercraft Interiors and Long & Foster Real Estate. Arnold Worldwide received 19 Addys and 33 citation of excellence awards for work done for companies including BBC America, The Washington Post and the Children's National Medical Center. Special judges awards were given to White & Baldacci of Herndon and Falls Church-based Crabtree & Company. The Ad Club plans to display the Addy winners next month at the Art Institute of Washington. . . . Arnold Worldwide created a new television commercial, "Bathroom," for District-based Children's National Medical Center. The 30-second spot began to air this month in the District during prime time on NBC, ABC and CBS and will also be aired next month on the season finales of "The West Wing" and "Law and Order." . . . Baltimore-based Eisner Communications released its first television campaign for Baltimore's National Aquarium, promoting the aquarium's new interactive shark exhibit, "Shark Quest." . . . Sightline Marketing, a District marketing and advertising firm, said it received two American Corporate Identity Awards, for corporate logos it developed for DFI International and Formtek Inc. The logos were created by Sightline president Samantha Guerry and design director Clay Marshall. . . . Former Qorvis Communications managing director Hilary R. Bruggen and Piega Consulting founder Simon Watson launched a District management consulting and marketing agency, Strelmark. Local clients include the Greater Washington Board of Trade. . . . ADventures Marketing, Design & New Media, a Leesburg firm, hired Michael Palanza as senior art director. He was previously art director with MicroArts Corp. in Greenland, N.H. . . . District-based advertising firm MDB Communications said the American Bankers Association gave it a $ 2.6 million advertising account previously held by Arnold Worldwide. MDB will provide direct mail, design for print and interactive advertising and overall account strategy and research for the District-headquartered association. . . . The Alliance to Save Energy, an organization of business, government, consumer and environmental leaders in the District, launched a new TV ad, "Energy Science Fair," featuring elementary school students competing for prizes for science experiments that save energy. . . . The District chapter of the American Marketing Association will host the first M Awards at 6:30 p.m. May 16 at the Galleria at Lafayette Center, 1155 21st St. NW. The awards will honor local marketers for excellence in marketing strategy, innovation, risk-taking, leadership and return on investment. Information is available at 703-683-4883 and www.mawards.com.

Sabrina Jones writes about the local advertising and marketing industry every other Monday in Washington Business. Her e-mail address is jonessl@washpost.com.

Dan Rosenthal Co. won Addy awards for its International Spy Museum and Washington Animal Rescue League campaigns. Bethesda-based Dan Rosenthal won 20 Addys and several other citations.