Big Shops in Small Ponds

“Think small” is no longer just a famous ad slogan from the ’60s. 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 the pursuit of small victories is increasingly driven by economic and financial issues. The responsible factors these days, of course, are the sluggish economy and subsequent dearth of sexy new-business opportunities.

In 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 jump ing in,” said Ruth Ayres, evp/chief marketing officer at Hill, Holliday, Connors, Cosmopulos in Boston. Her $610 million shop is no exception, as it’s currently pitching a print project worth an estimated $500,000-1 million 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.

Other agency chiefs apparently agree. Silversea Cruises, a cruise line based in Fort Lauderdale, Fla., attracted more than 100 agency suitors when it launched a review for a one-time print assignment. Contenders include Crispin Porter + Bogusky in Miami and McKinney & Silver in Raleigh, N.C., fighting for what, in the words of consultant Mike Agate of Select Resources International, is “essentially a little money and a boat ride.”

In this environment, a relative luxury like pitching a small account that may grow much larger becomes a neces sity. That’s the motivation for Patrick Kiss, svp/direc tor of new business development at FCB in San Francisco, which bills $900 million. FCB pursued the $5 million Clos du Bois winery business this year, and while the shop didn’t prevail, Kiss said it is anxious to work with a vintner again and would chase such an account even if the billings were low.

“Irrespective of size, [agencies] are looking at ‘are we in all the categories we need to be in?’ ” noted 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.”

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 sau sage account. The fact that Jimmy Dean is a division of Sara Lee Corp. 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 its Boston-based Arnold ($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 its size. Earlier this month, Arnold pitched and won the low-seven-figure account of soy-milk maker White Wave. A review consultant recalled that just a year ago, Arnold executives said they would “only pitch accounts $25 million and larger.”

Equally impactful is a new belief by some large shops that they can make money on small accounts. They contend that as long as these accounts are managed carefully and serviced without hiring new people, they add top-line revenue. And 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 Los Angeles bills $450 million, but it would have pursued the ongoing $7-8 million Australian Tourist Commission account if there wasn’t a conflict. Ian McGregor, the office’s evp/general manager, said the smaller pieces of business often offer shorter approval processes, and the shop may be able to work directly with the client’s chief executive. Large shops can make money from small accounts, he claimed, by being “more efficient. Sometimes clients don’t want full service.”

The chance to do work that will get noticed is no longer the only reason to pursue smaller accounts. “There’s no question that agencies are hungry right now,” said Roy Spence, president of GSD&M in Austin, Texas.