Ad News
March - April 2009
The advertising business is alive and well in Philadelphia.
Well, maybe it's even doing better than well. Yes, I know that the
economy is taking a swan dive, and that ad agencies and the like
have seen job cuts move up to 3.1% nationwide in 2008...but...
After two weeks of engaging some of this region's best and
brightest agency CEOs about how the economy was affecting their
business-and how their businesses were affecting the economy-I can
say from first hand observation that the ad biz in this region has
a powerful, professional and very passionate pulse that's pumping
like Popeye on steroids.
Let me start by noting that aside from their mandatory endless
supply of energy, dedication, and obvious expertise, the seven
prominent agency leaders I spoke with were all very different...and
so were each of their agencies. And the subtle truth may be that
within this distinctive, discernable diversity lies at least one of
the Delaware Valley's greatest strengths. Viva la difference! But
perhaps I'm getting a bit ahead of myself...
No fewer than four of the largest global industry holding
companies are now doing business in the Delaware Valley; which says
something significant about what the rest of the ad world thinks
regarding the odds for potential success beneath the bronze brim of
Ben Franklin's hat.
Katy Thorbahn is Senior Vice President and
General Manager for the Philadelphia office of Razorfish. For the
digitally inclined, Razorfish is broadly acknowledged as a global
leader in pretty much all things interactive and, incidentally,
happens to be owned by Microsoft. Living proof that good companies
often keep good company, you know?
In addition to running one of the largest offices in the entire
Razorfish network, Katy is a member of the Razorfish global
management team. She is also a self-proclaimed native Philly
Girl and, in my opinion, a particularly smart one at that.
When I asked about the economy, Katy didn't hesitate for a
second. "Clients are re-thinking how they spend. Digital is almost
universally underfunded so there continues to be room for growth.
Our clients have a keen interest in meaningful spends in this
space. That's one reason Razorfish is growing." She couldn't have
been more straightforward or succinct.
I asked Katy what she saw in the future.
She smiled. "We were always the agency of the future. When
Razorfish started, digital was an anomaly. Now the whole dynamic
has shifted and digital can own the brand. Clients come to
Razorfish because we can change their business. And we do."
Several blocks to the north and on the other side of Market
Street, Marc Brownstein has a
great photograph taken with Donny Deutsch hanging
in his office. Like Donny, Marc took the helm of his father's
agency and deftly drove it to the next level. He grew up in the
family business and it's easy to see why the family business is now
growing around Marc.
By adding a Seattle office, a digital marketing division, and
clients such as Microsoft, IKEA and ESPN, the Brownstein Group has
experienced fivefold growth in both staff and billings under Marc's
direction. Perhaps it's because of the eight years Marc spent doing
award-winning creative at Ogilvy & Mather in midtown Manhattan;
or maybe it's because Berny Brownstein fathered
his agency (45 years ago) at the beginning of advertising's
"Creative Revolution." Regardless of the reason, based purely on
the people in the halls and work on the walls, this place had a
decidedly familiar flavor. Like other friendly creative confines I
have known and loved.
According to Marc, "Creativity really counts here, especially in
a digitally centered branding, advertising, and PR world.
Understanding the consumer mindset has always been a strong suit
for us. That combination of skills is why we've added 'Creative
Hybrids,' talent that is cross-trained on the digital and
traditional mediums. Strategically and by design our messaging
today is empathetic, effective, optimistic, motivated, inspiring
and likely to move our clients' businesses ahead." Award-winning
also came to mind for me.
The world needs a whole lot more Marc Brownstein's. At least
Philly has one.
"Who Loves Ya?" That would be David
Lane, President & CEO of LevLane Advertising
PR Interactive, and world-class pragmatist. David also says he's
"lucky" and that "luck can play a major role in your success."
Personally, I think in our business guys like David made their own
luck through serious hard work and creativity. But I concede to
David that a little luck couldn't hurt.
David asked me more questions before we met than everyone else
put together, which is why I strongly suspect that lurking just
beneath his quietly inquisitive exterior you'll find a sharp,
analytical businessman...someone who thoroughly thinks through
every situation looking meticulously for the potential snags and
opportunities. I'm sure that's why his clients love this guy.
"Our agency's persona is kind of like nuts and bolts," David
over-modestly explains. "My partner, Bruce Lev, is
the nuts. Strong strategy, great creative, pushing the envelope on
ideas, thinking outside the box. I'm the bolts. Solid management,
business relationships, not having too much line out there, looking
hard for opportunities for ourselves and our clients."
"We're a shop that embraced digital 10 years ago so now we're
growing it organically. Given the downturn in the economy, our
overall strategy is to turn the jets up. We've stepped up our focus
on existing clients, and we're being more proactive in new
business. Because, agencies that are doing these things right are
going to win." In my opinion, that means David is most definitely
going to win.
Tierney Communications is unmistakably a class act. From its
chic center city offices on two large, fully appointed floors in
the Bellevue to its enviable blue chip client list; from the global
reach of a formidable, publicly held parent corporation to its
knowledgeable and oh-so-capable, home-grown CEO.
Mary Stengel Austen was one of the three
founding members of the Tierney Group. Today, as President &
CEO of Tierney Communications, she has a direct connection to
Interpublic Group. Mary is a phone call (or a text message) away
from tapping into one of the most powerful advertising and
marketing service networks in the world.
I think it's fair to say that her agency is the kind of setting
where you wouldn't be surprised to meet a major corporate
client...every hour. Mary herself simply says, "We're concentrated
enough to give senior level attention to our smallest clients and
large enough to deliver critical resources no matter what their
size."
"At the core of what we do is the idea. With 100 advertising
people and 50 PR professionals, we have the benefit of being large
and media neutral. We create and sell the strategy first. Even if
media advertising does get slow, our clients are also buying PR and
promotions, research and analytics, strategic planning, digital
solutions and just plain smart thinking." There's something very
special about Mary.
G2 Interactive is part of Grey Global, which is part of the WPP
Group. Which is another one of the global agency networks now
tapping into the Philadelphia market. Tom Conti
was brought in as President of the local G2 office last May. Then
in October he was promoted to President of G2 Interactive US. Now
in addition to running the whole US Interactive practice, he also
runs back and forth a few times a week between the office here and
G2 headquarters in NYC.
Playing turnpike tag with Tom was a challenge, so we finally met
on a snowy day off over coffee in the King Of Prussia Mall. "I
can't believe how hot we've been," Tom began. "As client demand
grows for e-marketing solutions, our broad digital experience makes
us a logical choice. Essentially, the advertising market is coming
straight at us. So we've had to become fairly selective in
determining who and how we pitch."
Hot? Logical? Selective? This ad guy just might have been too
busy to be overly concerned about the economy. "We provide things
that our clients are missing, rather than what they already
have...which includes thought leadership on how the various digital
platforms can be integrated into their overall marketing mix."
Then I asked Tom a key question. Can G2 do some kinds of work
more affordably in Philly than New York? "Philly is a major
advantage for us because it's a more cost-effective market to do
business in and, since creative and technology services come out of
both Philly and New York, it gives us flexibility in how we manage
staff costs and overhead against the accounts we serve."
Makes sense, doesn't it? Especially in light of the economic
challenges most advertisers are facing today.
John Backe (as in "hockey") honed his branding
and advertising skills on that classic crucible of package goods
excellence, Proctor & Gamble. Working on the P&G account at
Compton in NYC, John helped launch Liquid Tide. No easy task, I'm
certain.
I'm guessing that experience might have come in handy years
later, when Backe's agency spearheaded the name change from Beaver
College to Arcadia University. My lovely wife graduated from
Beaver, so I find that particular case study quite appealing and
ummmm challenging in its own right.
Between the time it took him to evolve from working in a Madison
Avenue monolith to Backe Digital Brand Marketing just off Lancaster
Avenue on the Main Line, John held top financial and operational
positions working with his father in the film, broadcasting and
publishing businesses. M&A activity, ROI and profit margins
were just another day at the office. Perhaps that's why John
started out our conversation sounding more like a client than most
other agency people I've met with.
"We are the perfect link between business and creative," Backe
says with the kind of conviction that inspires client confidence.
"My agency asks different questions about subjects like inventory,
distribution, client software, targeting. For smaller clients our
work defines their brand. In some cases it actually is their
brand."
Backe is yet another exception that defines the rule here in the
Delaware Valley. The agencies here are all a bit different. So
regardless of what a client is looking for they can find a potent
version of it in and around Philly. This diversity can defuse
adversity.
Which brings me to Voorhees, NJ. From several hundred yards away
you can see the graphic star logo perched squarely on the front of
a gleaming 47,000 sq. ft. glass building as unique as the woman who
owns the place.
This contemporary structure is Corporate Headquarters for The
Star Group, and the place where President & CEO Linda
Rosanio hangs her hat. At least she hangs her hat in
Voorhees when she isn't at one of Star's other six offices between
here and Las Vegas. And let's not forget about The Star Group's
landmark Philly offices, a mansion they restored at 17th &
Walnut Streets.
Part of Linda's business plan involved a series of strategic
acquisitions, which has put her in the very comfortable position of
being able to create and sell whatever her clients are buying. In
fact they use some of that creative capacity to partner with
clients and take equity positions in some of their projects. Kind
of reminds you of Crispin Porter + Bogusky in Florida, doesn't
it?
The comparison wasn't lost on Linda. "If you have more tools in
the toolbox, you use the ones that make the most sense. Maybe
that's one reason clients are now handing us work without a review.
And if we spend more time than fees on certain projects, so be it.
That's one of the major advantages of being independent. We don't
have shareholder pressures to deal with."
What she does have right there in her Voorhees offices, is a TV
production facility, recording studios, a print and collateral
production pipeline, offices that look both cool and comfortable,
and a futuristic computer center with so much capacity for client's
work that it looks like an updated version of the Whopper from the
movie War Games.
Linda shrugged, "It must be something like economy of scale but
this recession didn't hit us like the last time." I'm thinking it's
because since then she's tripled in size and grown The Star Group
to be one of the Top 100 Marcom companies in America.
More than one leader assured me that they think a healthy,
thriving ad industry is good for all of them. Competition is a good
thing but nobody wants to see anyone else go under. On the other
hand, there's no question that there's enough talent around Philly
to pick up the slack, so the strong will not only survive, they
could actually get much stronger before this is all over.
So how's business?
I found it especially interesting that three of the top firms in
the market are run by dynamic women leaders. There's also something
fascinating about all the global networks with offices here.
According to Katy Thorbahn of Razorfish, "Our revenue grew 20%
from 2007 to 2008. Our revenue from existing clients grew at an
even faster pace, which we view as a demonstration of the value we
bring to our clients' business. In addition to growing across most
of our current disciplines, we established a couple of new
disciplines for which we see continued growth in 2009 and
beyond."
If creative seems to be 'the thing' at Brownstein, you can rest
assured it's not the only thing these days. According to Marc,
"It's all hands on deck around here. We're hugging our clients
harder than ever, doing everything we can to make sure they thrive.
Clients need our creativity across the board today, even outside
the scope of traditional marketing. That kind of thinking helped us
fuel revenue growth of 23% in 2008."
Ranked number 1 on the Philadelphia Business Journal's
list of Ad Agencies, Star's star appears to be rising despite the
economic downturn; with 2008 numbers that show 18% growth in
capital billing, 13% growth in gross income and an 8% growth in
number of employees. Numbers aside, I'd say that Linda Rosanio will
continue to get business regardless of the economy because of her
sheer will and determination.
Facing that PBJ list of Ad Agencies is a full page ad from
Tierney Communications asking and answering the rhetorical question
"What Comes Before Number 1? We Do." Its ad goes on to say, "We're
the biggest advertising agency in the region. And the biggest
public relations agency. Thing is, our international holding
company won't let us publish our local billings - that's why we're
not on the local list. Our size is just part of why we're
great."
Two number ones, one private and one public?? Isn't that the
kind of bold bravura we're used to hearing from the north? Speaking
of which, I'm told that the 4A's here in Philly had looked at an
initiative recently to attract New York talent to the Philly
market. Given the tough economy and daily pressures of being in
NYC, I can see where it might be increasingly appealing to live in
a place that offers a lower cost of living and some great places to
work.
With pockets and pools of terrific talent and lower overhead to
stretch out a shrinking marketing budget, it seems readily apparent
to me that smart clients can get more different kinds of ad
specialists and bang for their budget bucks right here the Delaware
Valley. And isn't that what prudent business people everywhere are
looking for during this major economic downturn?
Please understand, no one is saying that jobs won't be lost and
ad spending won't be cut and that every place in Philly will
survive the severe economic maelstrom we're experiencing. There
will be some tears and a few bumps and bruises. Or even worse. But
given the sheer volume of not-so-good news going around America
today, it was kind of refreshing to hear what these optimistic,
creative and knowledgeable Philly people had to say.
Before I wrap this thing up, I wanted to give a couple of small
disclaimers. You know, like all the little legal type that flies by
on those automobile commercials.
Disclaimer 1: While I interviewed the top people at seven
different agencies, I want to point out that there are lots of
other great Philadelphia agencies that I didn't speak with. Like
Digitas, Diccicco Battista, Red Tettemer and so many others. This
wasn't an intentional slight, I just didn't want to turn this thing
into a book or anything. And I'm fairly certain the results would
have been consistent if I'd have interviewed more of the best ad
agencies in the market.
Second disclaimer: I am not a financial expert...I'm a
professional adman and those are the primary qualifications I bring
to this article. If you want real financial advice you might want
to talk to Lehman or Merrill Lynch. What's that? You mean there are
financial people who didn't give you such good financial
advice???
Well then maybe I don't blame you for wanting to trust me. I'm
thinking at this point that most of us know our business better
than the so-called wizards of Wall Street! Frankly, I think the ad
biz in and around Philly looks a whole lot rosier to me than most
of the financial companies do today.
Don't you?