The fall of Berlin? Andy says not yet

By Published on .

The travails of Berlin Cameron epitomize the perils of life in the ad agency business, a world in which two big accounts can make a small or mid-size shop-and break it.

In this case those two big accounts are Coca-Cola Co. and Samsung. The two plum wins turned the agency into a hot shop-and silenced those doubters who said the complex Mr. Berlin couldn't create a sustainable agency. But their departures forced the agency to cut half its staff.

Coca-Cola, notorious as a difficult yet highly coveted client, handed North American creative duties for its flagship Coke brand, Coke Classic, to the agency in 2003. In that year, other Berlin wins included Pfizer's Zyrtec, cellular-service provider Boost Mobile and White Wave soy milk. After winning Agency of the Year honors from Advertising Age that year, the New York agency's star continued to rise.

In 2004 the agency took the lead on some of the largest industry new-business competitions, acting as creative lead on WPP Group pitches for Samsung Electronics and Intel. When WPP prevailed last November on Samsung, Berlin Cameron was awarded part of the $200 million global branding account.

Less than two years later, both accounts have moved again. In recent weeks, Coca-Cola shifted Coke Classic to independent Wieden & Kennedy, and Samsung to Leo Burnett. Revenue, based on Ad Age estimates and an executive with knowledge of the agency, has slipped from $30 million in 2004 to around $20 million this year. Staff numbers have been slashed from 100 to 50.

Chairman Andy Berlin maintains the agency is still viable and that the remedial action he took when Coke walked was sufficient to cope with the loss of Samsung. "We let a lot of people go when we lost Coke. It was a substantial amount of revenue for us. But right now we're financially self-sufficient." No more layoffs are planned. "You learn from experience, which I've had. You cut once and you cut deeply," he said. "Those who remain, we can afford." Existing clients include Zyrtec, Boost Mobile and Nestle's Tidy Cat.

UPS AND DOWNS

Mr. Berlin knows well the vicissitudes of this business, having seen the ups and downs as a partner in such agencies as Goodby, Silverstein & Berlin and-immediately prior to the launch of Berlin Cameron- Fallon McElligott Berlin. He had also partnered previously with Ewen Cameron at Berlin Wright & Cameron. "The core group of people who founded this agency have been through challenging times before and emerged to be what our competitors and onlookers thought was one of the best," said Mr. Berlin. "Anyone who doesn't think so can call me."

But just as big wins and industry honors help propel an agency forward, losses and layoffs hurt an agency's morale and perception. "From a new-business perspective, some clients may pause for a second and wonder what's going on," said Hasan Ramusevic, president of consultancy Hasan & Co. But Leslie Winthrop, CEO of AAR Partners, said, "I don't see this as indicative of anything. It isn't the first time Coke's done this."

Berlin plans to change its new-business approach in the months to come, said Mr. Berlin. The agency's director of new business, Avi Dan, left prior to Coke's exit, and he won't be replaced. Instead, Mr. Berlin plans to grow by adding business from current accounts, picking up new clients through connections and building on them.

Lee Daley, who worked alongside Mr. Berlin from 2001 to 2003, is adamant that Berlin Cameron will thrive one day again. "Andy and Ewen have a remarkable partnership. Andy is complex and brilliant, and I think he can overcome anything."

In this article:
Most Popular