New-business brightens: Small shops boosted by aggressive efforts

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Small and midsize ad agencies are starting to see signs of recovery.

Based on results of a survey conducted by St. Louis-based consultancy The Vinyard Group, shops with fewer than 150 full-time employees are faring well. The new business drought that fell over marketers and agencies throughout 2001 and into 2002 has lifted for them. Almost half (49%) of respondents say they've landed more new clients and billings in the past two years compared to the prior two-year period (2000-2002). Nearly one-third (29%) report that their number of clients and new billings has remained unchanged.

"There is a level of excitement" reminiscent of 1994, said Ellis Verdi, president, DeVito Verdi, New York.

Vinyard e-mailed questionnaires to nearly 400 agencies in mid-December, and tallied data from 50 small (20 to 60 full-time employees) and midsize (60 to 150 full-time employees) agency respondents in January 2004.

These new good times are largely the result of changed operations as well as mindset. Most (78%) survey respondents have been more aggressive in their new-business efforts in the past two years. Independents Butler Shine Stern & Partners, Sausalito, Calif. and Tucker Hampel Stefanides & Partners, New York, each hired new-business executives to add additional firepower. Bill Tucker, CEO of Tucker Hampel, who last September hired former Foote Cone & Belding veteran Cynthia Perry, saw the investment as a necessary next step. "We devoted years to get to a size beyond two-men-and-a-dog," Mr. Tucker said. "Cynthia's big agency background brings another level of credibility."

referrals

Referrals, cited by 49% of respondents as the source of new business, are crucial. Management at AgencySacks, New York, has asked staff to pass on names of so-called influencers. "These are people in the media, current and past clients, photographer's reps, or people at public relations firms," said Andrew Sacks, president.

Referrals aren't always enough to land a client. Almost three out of four respondents said the most successful strategy for winning new business is bringing a marketer an idea for solving a business challenge.

"There's no such thing as a `howdy' meeting anymore," said Jerry Gottlieb, CEO of 50-employee McCaffery Ratner Gottlieb & Lane, New York. "When you sit down with a potential new-business client, you must be able to have an intelligent conversation about how you would solve their problem."

Companies such as Verizon Communications, Verizon Wireless and Bristol Myers Squibb have each in recent years moved business from global network offices to small and mid-sized shops. Stephen Gardner, co-founder of Gardner Nelson Partners, New York, which counts BankOne as a client, cites the attention he and partner Tom Nelson offer as the reason for the agency's success. "We've got senior people on our accounts. We don't hand off to juniors. What clients want, more than anything, is the time and focus of experienced people."

contributing: alice z. cuneo, claire atkinson, laurel wentz

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