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ADVERTISING-
July 2000 Feature Article River
City Persuaders EVEN though Louisville may be the 50th-largest ad market in the U.S., that hasn’t prevented the city’s ad agencies from pursuing and pleasing clients across the country. What’s more, they’re drawing to town some of the nation’s hottest talent, people eager to do their best creative work in an atmosphere that, on its surface, is at least a bit more placid than New York or Los Angeles. But the truth is that Louisville agencies, all 60-plus of them, tend to provide great service to demanding clients on both local and national levels. According to an economic impact study conducted in December 1999 by Marketing Research of Kentuckiana, Inc. on behalf of the Advertising Club of Louisville, the city’s advertising gross revenue for 1999 was estimated to be $970,838,300, a 23 percent increase from 1995. Of that total, $675 million dollars remains in the local economy. A few other findings:
To underscore the agency boom, the Ad Club of Louisville, founded in 1909 as one of the first such clubs in the country, won its second national award in a row, chosen by the American Advertising Federation as the 2000 Advertising Club of the Year. Even the advertiser of the advertisers is on a roll. "We’re division one," says the Ad Club’s Executive Director Loree Holland. "That means we compete against cities like Cleveland, Boston, and New York City. It’s a huge honor for us and it means a lot to be recognized at that level." Rule changes never end in the ad game Many shops are setting themselves up to be of the one-stop variety. In the process, they have been redefining what an agency is. "Today it’s becoming more of what it was in the ’60s and ’70s," says Tim Hellige of Bandy-Carroll-Hellige. "Back then, agencies wrote business plans for clients, but we saw that diminish as consulting firms like Arthur Andersen and McKenzie surged. Then clients considered agencies vendors, just used them as media buying and creative resources. But today, it’s more about being a complete marketing and communications partner again. If the agency is doing its job, it’s more of a relationship as a strategic partner." "Life was a lot simpler in 1979," says Kupper-Parker/Louisville President John Ellis. "Ad agencies were defined by the creative work they did more so than the marketing and analyst work we do now. We’re called on to be a lot of companies’ marketing departments." Certainly
technological advances have changed things, including the
capacity of the toolbox itself. It’s just such leaps that have allowed markets like Louisville to become major players in the ad game if they want to. "It’s amazing how technology is changing our industry," says Loree Holland. "They’re doing a lot of work for Web sites. They’re looking into the future and not being dragged there." Here’s how it’s changing the business: According to the Ad Age report, interactive shops comprised 43 of the 500 top agencies and reported $1.27 billion in gross income, up 53.7 percent. A
look at the Ad Age report from April reveals that 26 of
the top 100 world agencies are marketing services
agencies, 12 are public relations firms, 12 healthcare,
eight interactive and two recruitment. "Clearly, the Internet holds the promise of changing the way in which businesses work," said Kleier in a recent press release. "Our role at c-z.com is to provide improved efficiencies and increased margins to both buyers and sellers within the industry." At last count, according to Advertising Age, more than 300 U.S. agencies have been consumed by others since the turn of 1999. Leviathans like Omnicom and Interpublic gobbled up agencies by the dozens. And no doubt they’re watching what’s happening in Louisville with a gleam in their eyes. One global firm, Shandwick, has already made its move. "I really see a sea change in the attitude toward Louisville," says Rebecca Simpson, Shandwick’s managing director. "We’ve been given opportunities here to do global work for corporations that we wouldn’t have had six or seven years ago. We’re doing global branding work for companies like GE, national issue work for Brown & Williamson, and worked on a worldwide crisis network together for Ashland Chemical. Regional companies realize that Louisville talent is equal to talent anywhere in the world." Thirty years ago, Shandwick’s Louisville agency was founded as the Wence-Neely Company by Rod Wence and Randy Neely. In 1988, it was purchased by Shandwick in a global acquisition spree and is now the fifth-largest public relations agency in the Southeast. After Wence and Neely both retired in ’96, Simpson became one of only two female CEOs for Shandwick in North America. The shop has grown to 47 people, with nearly $5 million in billings and fees. Tom Kokai has been around the agency block a few times, having worked since 1973 in capacities from creative director to account manager at Abramson and Himelfarb in D.C., Doe-Anderson, Sheehy and Associates, Creative Alliance, and Keller-Crescent, a $120 million agency in Evansville (where, among other feats, he named Krunchers! Potato Chips). Now he plays both sides of the agency coin as account supervisor and creative director at Shandwick. "One of the really cool things about our office is that our roots are in strategy," Kokai said. "We go beyond pretty pictures and ask ‘What is your business plan, what are your goals, how do we communicate what your business needs?’ Because we practice a lot of disciplines, it is easier for us to truly see the big picture, rather than just the ads." Across town at Power Creative, one of the pioneers to locate in the now-bustling business zone off Blankenbaker Road, an expansion of capabilities several years ago has led directly to big new accounts – most recently a $10 million agreement with Ingersoll-Rand that incorporates strategic work for all the company’s divisions across the country. That’s a healthy addition to the company’s $71 million in billings in 1999. Power has perhaps the most extensive and technically up-to-date in-house production studio in the state. "A lot of agencies would think it’s crazy to get into ‘preflight’ prepress services, but it gives us more control over the jobs and over their costs," says President David Power, son of Mike, who founded the firm in 1976. Since acquiring Affinity Advertising in February 1998, Power has grown to more than 150 people. That roster includes several return engagements, which speaks well of any firm in the high-turnover world of advertising. Just around the corner from Power’s enclave is the headquarters of Ott Communications Group, a $33 million agency where clients like American Express, Chiquita and Maker’s Mark come to address the "below the line" promotional work that helps them sell their brands, much of it done for point-of-sale display. "We recently came in at 112th nationally in the Ad Age ranking of marketing services – above the Lord Group, a Young and Rubicam agency," says company President Christopher Ott proudly. "And Promo magazine ranked us 31st in the country and recognized us as a young, aggressive up-and-coming group." Though the group’s 58 employees do have some involvement in Web site development, materials are their core business. "Our experience is promotionally heavy, especially with liquor and tobacco – the sin business," says Ott. "We take that learning and understanding to food and food-related products or to other categories. Take a point-of-sale device like a bottle glorifier – now, Lexmark has a glorifier for its printers." Like Power, Ott has a complete in-house, 17,000-s.f. photography studio. "An ad man saying ‘Picture if you will’ doesn’t happen anymore," says Ott. "Now you can physically see with instant prototyping what an ad will look like in a short period of time." Like Ott, Kupper-Parker in downtown Louisville is a relatively small shop, with $12 million of billings annually to contribute to its St. Louis-based parent company’s $150 million nationally. Local President John Ellis sees potential in several niches, like the healthcare arena his firm just entered with Anthem/Blue Cross in Cincinnati or the travel and tourism arena, which KP has entered through its initial association with AAA of the Bluegrass and Hoosier AAA. "We do things the KP way now, but we do it our way too," says Ellis. "They’ve helped us when we have asked. That’s the key – if you’re a big company buying up smaller companies, you have to trust them to do the job they’ve been doing. We’ve had a lot of relationships here. It’s the companies that try to change everything that run into trouble." What KP has changed is the depth of services Ellis and his cohorts can offer – from high-end PR work to Web site development – services that a smaller agency can’t normally scale. Ultimately though, Ellis says, good advertising exudes from a company’s very fiber. Major talent migrating to "minor" city The standard school of thought holds that all the advertising talent goes to New York, Chicago, L.A. or San Francisco, gathering in restaurants and Nerf-filled studios like bees in a hive. Even the recent complimentary profile of Doe-Anderson in Adweek referred to Louisville as "the hinterlands." But clients and talent alike are finding that it doesn’t take a major metropolitan center to create a high-quality campaign. "Louisville is successful because we’re a complete package," says Loree Holland. "We work closely with schools throughout the state. We’re strongly recruiting outside the area. There is a lot of interest in relocating here from California and from large metro areas like Chicago, Detroit, and Atlanta – areas where talented people may be looking for a lifestyle change." "The biggest thing we hear from folks in our business is they’re surprised by the level of quality in the arts in our region," says Tim Hellige of Bandy-Carroll-Hellige (BCH). "Louisville is number one in per capita contributions to the arts. The second thing is the level of the restaurants. People from Chicago, New York, and San Francisco eat out a lot and get incredible food. So they come expecting to be underwhelmed and they’re pleasantly surprised. BCH was founded as Bonura Advertising in 1972 by Joe Bonura. The three principals today – Susan Bandy, Mark Carroll and Hellige – joined the agency in the ’80s and celebrated the firm’s 10th anniversary as BCH in June. In that time, the firm has experienced an average of 22 percent annual growth and topped out at $40 million in billings last year, working with clients like Louisville Zoo, the Courier-Journal and Turner Broadcasting’s WCW Wrestling. "It’s become a much more creative-driven shop, taking on more of the marketing/communications discipline," says Hellige. The firm brands its E-Vision (e-business) and PR Network divisions as separate entities, but has moved all 50 of its people into its brand new space on Muhammad Ali Boulevard. "It’s important to have the right kind of environment for them to thrive in. We did some research, visited some companies like Netscape and others in Silicon Valley, and it’s like a college campus, complete with beer blasts on Friday afternoons. Money is not everything to people these days, at whatever age. The Baby Boomer’s mentality has changed as much as that of the Gen-Xers. The other audience is our clients, they enjoy coming and having meetings there. It’s not often you’re discussing spending millions while sitting on a beanbag chair." Another agency acting as a talent magnet is the city’s oldest, Doe-Anderson, founded in 1915. With billings of $81 million in 1999, company President and CEO Dave Wilkins is looking toward $150 million by the end of this year. The company was the subject of a recent AdWeek cover story that portrayed the firm as emblematic of not only Louisville, but the industry’s trend toward more intimate and dependable, but no less creative, shops. "I think as a city, we are far deeper in talent than we’ve been for a long time," says Wilkins, whose firm currently has 115 employees. DA’s best-known work is with clients Maker’s Mark, Ebonite and National City Bank, a $30 million account. Among the agency’s newer clients are TradeCast, a Houston-based online stock trading company, and Louisville’s own eMazing, now a Sony subsidiary, whose proclaimed goal is "planetary domination of e-mail" through targeted tip, information and entertainment services. Their newest addition is a big piece of business with Winston-Salem. According to Wilkins, business has grown by 117 percent in the last two years. That kind of energy has helped as much as anything in the national hunt for talent – but so does ownership. "Certainly for senior people, an opportunity to own part of the company is an option," says Wilkins. "Every other agency in the state is privately held too, but they’re not set up for employee ownership – maybe eight or 10 people. But we have 45 shareholders and as a subchapter S corporation, we can go up to 75. If you share the booty at the end of the day, it makes people smile." PriceWeber, a 95-person, $71 million agency with longstanding ties to Cummins Engine and Brown-Forman, offers a similar atmosphere. "We are a great place for people who have an entrepreneurial drive," says President Shanna J. Columbus. "Eighty percent of our people own a piece of the rock. No one of us is a majority shareholder. Our biggest success comes from people who have started out with another agency, have fought the battle as salesman, creator, and bookkeeper. Then they come to us, find they can express what they want as an entrepreneur, but they’re surrounded by a resource base you can’t find many other places." By far the biggest agency on the block in Louisville is Creative Alliance, which under the direction of CEO and chairman Debbie Scoppechio has grown since its 1987 founding to $119 million in 1999 billings. The firm maintains four offices, two in Louisville, one in Chicago, and one in Nashville – and employs 160 people, who do work for clients like Lightyear (formerly UniDial), Norton HealthCare, LG&E, PepsiCo, KFC, and Atria. One of those Louisville offices is Sager-Bell, which CA acquired a few years ago and whose largest client is Brown-Forman. "About two years ago," says ad veteran Bill Sheehy, "it seemed like all at once four graphic houses decided to become ad agencies – Power, Ott, Paul Schultz and PriceWeber. They all came into the full-service agency scene with a sizable amount of business. Now you have 10 to 15 viable agencies in the marketplace, so it’s tremendously competitive. When a large piece of business decides to hire or change agencies, it’s like a cattle call – you come in for a briefing, and then you make a determination whether you want to stay in the battle or not." Sheehy’s present configuration, the only Kentucky agency in the World Wide Partners network, works with clients like Kroger, Arby’s and the Derby Festival. He’s seen a lot of changes in his 28 years in the business. "Everybody wants to go through a branding exercise," he explains. "It’s really nothing more than positioning – establishing where you are in the consumer’s mind. At one of our WWP meetings, someone asked what business we’re in. It’s the persuasion business – persuade a person to buy a product or service, then it’s up to the client to treat that person so they become a loyal customer and keep coming back." Adam Bruns (adambruns@lanereport.com) is associate editor of The Lane Report. Advertising Companies Represented by the Membership of the Louisville Advertising Club |
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