Big Shops in Small Ponds

"Think small" is no longer just a famous ad slogan from the Sixties. Now it's a common philosophy among the nation's largest agencies as they chase the tiniest of accounts.Shops always have and always will use smaller accounts as creative showcases. But increasingly, the pursuit of small victories is driven by economic and financial issues. The looming new factor is the sluggish economy and the subsequent dearth of sexy new business opportunities. This is a year in which ad spending is expected to trail economic growth for the first time in a decade. "If Joe's Deli in Keokuk, Iowa, threw a pitch, you'd find Arnold, Goodby and Wieden jumping in," said Ruth Ayres, evp/chief marketing officer at Hill, Holliday, Connors, Cosmopulos in Boston. Her $610 million shop is no exception; it's currently pitching an estimated $500,000-1 million print project from ski-products company Rossignol.With "new business as slow as it's been in my [20 years] in the business," said Ayres, "you want to keep your team sharp. It's important to keep your thinkers thinking.""It's very hard to turn down growth wherever it comes from," agreed John Berg, president of DDB's $750 million New York office.For some agency heads, no revenue gain is too insignificant. "I don't care if a client only produces $100,000 in revenue if we can do OK on that hundred and meet our profit numbers," said Mike Hughes, president and creative director at The Martin Agency in Richmond, Va., which bills $400 million. Agency boundaries on the size of clients they will chase can be altered for a few reasons. "Sometimes, you break that [account size] rule because of who you know or what the category is or because you can do great creative work," said Les Mouser, CEO of Campbell Mithun in Minneapolis, a $1 billion shop that went after the state tourism departments' $3 million business.In this kind of environment, a relative new-business luxury like pitching a small account in the hope that it will grow much larger becomes a necessity. That's the motivation for Patrick Kiss, svp/director of new business development at FCB in San Francisco, which bills $900 million. FCB pursued the $5 million Clos du Bosis winery business this year. While it didn't prevail, Kiss said the shop is anxious to work with a vintner again and would chase such an account even if the billings weren't significant. "Irrespective of size, [agencies] are looking at: Are we in all the categories we need to be in?" said Laurie Coots, chief marketing officer at TBWA\Chiat\Day. "Agencies are starting to make longer term choices. "For example, if they are not in a category, working with a smaller client can help them get credibility in that category. That may help them grow that account or be eligible for a bigger account in that category," Coots said.Besides, little clients often have big owners. In Chicago, Leo Burnett bills $3 billion, but that hasn't stopped the giant shop from courting the $7-10 million Jimmy Dean sausage account. The fact that Jimmy Dean is a division of Sara Lee and Burnett already handles its Ball Park brands is no coincidence.Pressure from holding-company parents also figures to keep the trend going even after the economy picks up. For example, sources said word has come down from Paris-based Havas that Arnold Communications in Boston ($1.1 billion in billings) needs to crank up new-business, and that Arnold president/COO Fran Kelly is now willing to consider any account no matter the size. Earlier this month, Arnold pitched and won the low seven-figure account of soy-milk maker White Wave Silk. A review consultant recalled that just one year ago, Arnold executives said they would "only pitch accounts $25 million and larger."Equally important is a new belief by some large shops that they can make money on small accounts. They contend as long as these accounts are managed carefully and serviced without hiring new people, they add top-line revenue. Also, under fee-based as opposed to commission-based arrangements, an agency can make money on an account that doesn't bill a lot.McCann-Erickson in L.A. bills $450 million, but it would have pursued the ongoing $7-8 million Australian Tourist Commission review except for a conflict. Ian McGregor, evp/general manager of the office, said the smaller pieces of business often offer shorter approval processes, and the agency may be able to work directly with the chief executive. Large shops can make money from small accounts, he claimed, by being "more efficient. Sometimes, clients don't want full service."

Brand Marketing

Big Shops in Small Ponds

Jack Feuer

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Jack Feuer