Around this time last year, Cliff Freeman and Partners was wowing the crowd at Cannes with a Grand Prix win for its Fox Sports Net campaign.
Amid another awards season, it's hard not to see the contrast in the position Cliff Freeman finds itself in a year later. The 14-year-old shop is learning that creative brilliance alone is not enough to sustain an agency in a tight economy, especially as more clients demand integrated marketing solutions.
Earlier this year, the agency enlisted financial adviser and mergers-and-acquisitions specialist David Weiner to explore the via bility of a sale, sources said. But it did not take long to realize that given the state of the industry, coupled with Cliff Freeman's own recent difficulties, now may not be the ideal time to sell—even if the agency's namesake founder appears to have embraced the idea of relinquishing his independence.
"I thought it would be good to know these kinds of people," said Freeman, 59, of Weiner. "Obviously this whole thing [selling] is on my radar screen. I just want to be as intelligent and as informed as I can possibly be."
The most recent acquisition talks took place just four months ago and involved Omni com's TBWA\Chiat\Day along with Zimmerman Part ners. Free man confirmed that he met with CEO Jordan Zimmerman, but those talks are said to be stalled. "There's no activity [now] and no deals," Freeman said last week. "Selling doesn't feel like the right thing to do right now."
Given the cyclical nature of the industry, few shops would opt to sell in the current environment. And there are factors specific to Cliff Freeman that make for bad timing for negotiations. In resigning Coke last August, the agency gave up a blue-chip brand that once attracted the attention of suitors. And in Staples, the most recent client defection, Cliff Freeman lost the kind of creative showcase that has elevated its profile far beyond its actual size.
In fact, during the past year, the agency's client roster shrunk by $85 million in billings due to account losses and resignations. Along with Coke and Staples, Church's Chicken and Hardee's also left. Though Cliff Freeman now claims billings of $350 million, that number is hard to justify. For 2001, the agency's several remaining clients spent less than $130 million combined, according to CMR.
Already this year, marketers such as Budget and Midas have confirmed that they plan to cut spending. Mohe gan Sun and Quizno's, both worth just $15 million in bill ings, generate the most revenue. Sources said revenue has dropped to about $10 million. While Freeman disputed that figure, he declined to elaborate.
"The same great achievements are still at work," Freeman asserted. "We're still the same management with the same dedication to excellence. Every agency I respect—Fallon, Goodby, Wieden and others—has lost business recently. It's an unprecedented time now in advertising."
Winning the estimated $20 million Long John Silver's business, which the agency will pitch on Wednesday, would go a long way toward regaining momentum. Fast-food accounts were the agency's signature business when it was founded 14 years ago as a Saatchi spinoff able to work for conflicts such as Little Caesars. Some observers wonder whether that historically heavy retail orientation and the agency's penchant for dark and quirky humor has limited the kind of clients drawn to the shop.
Freeman argued that it's that very track record which will carry the agency through hard times. "We've proved that our work creates incredible situations and results for clients," he said. "How is that not attractive?"
Still, the agency battles the perception that its brash originality masks a lack of integrated business solutions. To that end, during the past four years, Cliff Freeman has broadened its offerings by forming alliances with promotions agency The Zipatoni Co., interactive design firm Titan Digital and research partner Hall & Co.
Freeman himself remains con fident, predicting that a year from now, his fortunes will again turn. "Cream always rises to the top," he said.