Amster Yard, McCann-Erickson Worldwide's creative boutique, wasn't set up to focus on international clients. Nor was Fallon McElligott Berlin.
Yet the two New York-based shops have pulled in foreign business. In February, Amster Yard won a $15 million assignment to launch a new insurance division for Mexico's largest financial institution, Bancomer. Also that month, FMB received a corporate branding assignment for Bancomer's retail banking unit.
The shift to smaller, and arguably more creative, ad agencies is seen by some observers as an ad industry trend as international marketers seek breakthrough images for their brands--ideas that can cross borders effectively often without much rejiggering for local cultures.
"I think the new international billings represent the globalization of an increasingly sophisticated commercial economy," said Andy Berlin, FMB chairman.
Amster Yard's win of the Bancomer business, over shops including Teran TBWA Publicidad, the Mexican agency of TBWA International, brought its billings to $95 million since the New York agency opened its doors two years ago.
"I would say that 95% of our business is outside the U.S., although that is not intentional," said Lee Daley, managing director at the 14-person shop. Amster Yard doesn't have any overseas offices to service accounts, although it accesses its parent's account management, media and other support services around the world.
Some smaller shops, including London-based Bartle Bogle Hegarty, are finding they must open offices abroad to handle a growing number of international assignments. Bartle last fall opened a Singapore office and hasn't ruled out the possibility of setting up shop in the U.S. to be nearer its major client, Levi Strauss & Co.
TRAVEL IS A NECESSITY
But going after and winning international assignments requires an extensive outlay of energy and resources. For starters, there's the travel.
According to Mr. Daley, Amster Yard's contract with Bancomer stipulates that he and Creative Director Jeff Weiss visit the client in Mexico at least once a month. Mr. Weiss said he logged 340,000 frequent-flier miles during 150 days of travel in 1996.
"It's a way of life," he said.
In addition, international accounts are seen as more expensive than domestic ones to service, which can put a strain on agency finances. And the costs can add up quickly, considering the expenses of maintaining expatriate staff in foreign locations, high rental costs in many cities, travel and the inability to give personal attention to other important business while outside the home office.
Translations alone can be painstaking. Mr. Berlin said the agency uses translators in Japan and then "triple-checks" the work so that the cultural context is correct.
RELYING ON LOCAL DIRECTORS
Amster Yard gets around the difficulty of servicing faraway clients in part by relying on McCann account directors in local markets. For example, there are now 12 McCann account directors in Europe for one of Amster Yard's latest accounts: the $30 million pan-European business for Bacardi rums, won last October.
FMB has had to stretch its resources to handle the growing international assignments, which Mr. Berlin said account for nearly one-third of the agency's total billings of approximately $110 million. Among its foreign business: Coca-Cola Co.'s Japanese-market Georgia Coffee brand, a $30 million account won in September from McCann-Erickson, Tokyo.
FMB, which carries about 60 to 70 employees, has hired six people recently for the new business.
Planning Director Ewen Cam-eron said that he's been to Japan on behalf of Georgia Coffee 12 times in the last nine months.
FOREIGN SUCCESS NO TREND
Despite the foreign success of these shops, some observers disagree that these assignments represent a trend.
"I think too much is being made of this," said Peter Hamilton, exec VP and director of worldwide accounts at McCann in New York. "The large advertisers like Unilever want ad agencies that can service their accounts around the world. They don't want just creative boutiques."
"There is a basic flaw in the system when you see this happening," said a worldwide account director at a competitive medium-size agency that's extending its overseas network of offices.
Mr. Weiss, however, disagrees.
"I think it shows that there's a need for powerful creative ideas that can cross borders," he said.
One client certainly sees things that way. "Rarely have I seen the talent [Amster Yard has] given us, and the extraordinary intelligence and insights into the brand's soul," said Jose Aragon, VP-marketing at Bacardi-Martini.
He awarded Amster Yard his brand's $45 million European advertising in February 1995--in a pitch with three major European shops--and the shop's campaign helped boost Bacardi-Martini's European sales by 4% last year after several stagnant years.
Copyright April 1997, Crain Communications Inc.