Aftershock: San Fran's ad fate on top of fault line

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The San Francisco advertising community has been shaken by the dot-com bust, technology pullback, economic slowdown and the terrorist attacks. But perhaps one of the most devastating aftershocks was the defection last week of long time signature advertising account Levi Strauss & Co.'s jeans brand to a New York agency.

While Levi's $66 million account is a small portion of the city's overall billings, the psychological impact of the loss on the city's creative ego was far more substantive.

"I'm crushed," said Paul Venables, partner, Venables, Bell & Partners, San Francisco, an agency that broke away from Goodby, Silverstein & Partners last year. "Any time San Francisco as an agency community loses a marquee account, it's a blow to all of us," he said.

The move once again stung a community that has long seen local businesses such as Visa, Charles Schwab and Apple Computer grow into large marketers then stray once their advertising needs reach global proportions.

Jack Boland, president, Pickett Advertising and former president of Foote, Cone & Belding Worldwide's San Francisco office, said his concern is that the city's agency business, now grappling with conflict-plagued branch offices, client consolidations and marketer departures, will revert to its 1960's mode of "privately held small agencies working on regional accounts."

levi's set tone

With its advertising centered in San Francisco since Levi Strauss invented jeans for miners in the 1849 Gold Rush, the apparel maker set the tone for San Francisco advertising creative, particularly during Levi's 1980s heyday with the late FCB creative director Mike Koelker's 501 Blues campaign.

The Levi's shift comes at a time when another key San Francisco creative client, General Motors Corp.'s Saturn division, is in the midst of a review for its fall '02 $100 million Ion small-car launch. Industry observers believe the winner has a shot at the entire $300 million account. Hal Riney & Partners' Saturn win a dozen years ago put the city's creative acumen on the national map.

Pitch presentations are expected next week. Riney, now Publicis Groupe's Publicis & Hal Riney, is defending. Another San Francisco shop, Omnicom Group's Goodby Silverstein, also is a finalist. Others pitching are Bcom3 Group's D'Arcy Masius Benton & Bowles, Troy, Mich., and New York; Interpublic Group of Cos.' McCann-Erickson Worldwide, through several offices; and Wieden & Kennedy, Portland, Ore.

not all gloom and doom

Many agency executives remain upbeat, however. "It's not all gloom and doom," said Greg Stern, president, Butler, Shine & Stern, Sausalito, Calif., whose clients are based in Los Angeles, Colorado and other states. Mr. Stern holds out hope that Levi's new agency, Bartle Bogle Hegarty in New York, will open a branch in San Francisco.

But Levi's North America president, Robert Hanson, who has relocated some of Levi Strauss' marketing functions to New York, said he is not concerned about the account being serviced on the East Coast. "At this point, it's not an issue," he said. Bartle Bogle's New York office president, Cindy Gallop, in fact, said, "I think the Levi's people are looking forward to spending some time in New York City."

If outgoing Levi's shop TBWA/Chiat/Day doesn't close its doors in San Francisco-as predecessor agency Chiat/Day/Mojo did in 1990-the office potentially could bring some Adidas work to the city, said Mr. Venables, although that new account is set to be handled out of the shop's Playa del Rey office in Southern California.

REASONS FOR OPTIMISM

There are other reasons for optimism. Numerous major brands, particularly tech clients such as Microsoft Corp., Oracle Corp., Hewlett-Packard Co. and telecom Sprint PCS, remain mainstays of the San Francisco agency community.

At least one major holding company, Grey Global Group's Grey Worldwide, is making a "significant investment" in its San Francisco outpost, said Casey Jones, exec VP-managing director, technology at Grey Global Group, and president, Grey Worldwide, San Francisco.

Mr. Venables' shop, opened in June with the anticipated $50 million account of Microsoft's Ultimate TV, has picked up an additional six pieces of business, including Bell Sports' Bell Automotive Products, home video for AOL Time Warner's HBO, Barclays Global Investors and project work for Game Show Network, jointly owned by Sony Pictures Entertainment and Liberty Digital.

"This city has a higher concentration of talent than any city in the country," not only in the agency business, but in the technology and other related artistic fields, said Mr. Venables. "We all feel the pain," he said, "but there's no better talent pool."

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