Shops Take a Chance With San Francisco

Despite Lack of Boom Days Past, Some Agencies Head West to Keep Up With Talent, Tech

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SAN FRANCISCO (Adage.com) -- There's no dot-com boom, no high-tech bubble to lure eager agency execs out west with the promise of big billings. Yet a couple of ad shops have nonetheless decided to tackle the high price of real estate and talent and the dearth of bill-paying marketers to open outposts in San Francisco.
Bob Greenberg
Bob Greenberg

R/GA, tired of seeing its talent siphoned off by the likes of San Francisco-based Goodby, Silverstein & Partners, and looking for opportunities with Nike and other West Coast clients, is opening shop in the market.

Greenberg's plan
"Recruitment is one of the single biggest issues facing our industry today," Bob Greenberg, chairman-CEO and global chief creative officer, R/GA, said in an e-mail. "We believe that San Francisco has a lot of great talent -- some are alumni from R/GA, others work for various marketing/advertising agencies and there are a host of other companies outside our industry that create digital work," he said. "Just as we grew London organically, we plan to do the same with San Francisco."

R/GA, with 575 employees, primarily in New York, has an additional 35 in London.

For their part, executives at Goodby Silverstein were surprised by the notion, voiced by one senior R/GA executive, that Goodby was stealing employees from R/GA. "I personally know of two people we hired from R/GA -- it's not like we hired Greenberg himself," said Harold Sogard, vice chairman, Goodby Silverstein. "I welcome R/GA to the center of true creativity."

Mr. Greenberg, however, said the move to open in San Francisco had nothing to do with Goodby or any other local agency; R/GA simply wanted to be in a market known for its interactive expertise.

Likewise, Minneapolis-based independent agency Olson also is opening an office in San Francisco: "We, for one, like it there," said CEO John Olson. "The people who share our beliefs are there and the talent vein is so rich."

Different expectations
Unlike other agencies that migrated to San Francisco during the dot-com boom in search of business, Mr. Olson said he is "not expecting [San Francisco-based] clients to support this office." He said his shop, which has grown sevenfold in six years, currently has 43 open positions "and a lot of those we're hoping to fill" in San Francisco. The agency, known locally for its dodgeball games, handles work for Nike's Bauer hockey brand, Target and General Mills and recently won Fifth Third Bank, Allen-Edmonds and Starkey Laboratories.

Mr. Olson plans to have personnel rotate between San Francisco and Minneapolis, much in the manner that Dan Wieden initially built out the European and Asian network for his Portland, Ore.-based Wieden & Kennedy.

San Francisco has been undergoing something of a resurgence, particularly in light of this year's win of some $2 billion in billings by Goodby Silverstein. "Most of the agencies [in San Francisco] are doing good and having decent years, the economy be dammed," said Jerry McGee, exec VP for the western region for the Association of American Advertising Agencies.

There's also a lot of technology in the area, particularly in emerging areas such as social networking, and other companies likely to bring in the next generation of media companies, said Catherine Bension, president-CEO of agency-search consultant Select Resources International. "Technology is connected to the business, and there's a lot of that in the Bay Area," she said.

Geographic push-back
She has noticed, however, that marketers are exerting some "geographic push-back" with Midwest marketers such as H&R Block interested only in shops in the East or Midwest, though some West Coast clients, most recently Sony PlayStation, sought local agencies. She also noted that many big banks and technology companies, once the anchors of the West Coast agency business, have moved their advertising accounts east.

Still, those toiling in San Francisco aren't so sure how wise it is to set up shop in San Francisco today. "It's a pretty gutsy call," said Alan Burgis, CEO of Euro RSCG, San Francisco. "It's a relatively small and relatively expensive market, a tough market here to turn up and hang up a shingle and make yourself rich and famous," he said. "It's like playing high-stakes poker."

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