L.A. groups reorganize: Ad clubs adapt to harsh environment

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With their ad clubs' memberships and financial resources dwindling, advertising communities in Los Angeles, Detroit and Boston are confronting the need to change their local associations.

The biggest shift could occur in Los Angeles, where three agency chiefs are working to overhaul the plethora of industry-related organizations in the nation's No. 3 ad market with the goal of forming one new strong organization.

"We are going to blow up the Los Angeles Association of Advertising Agencies and the Los Angeles Ad Club and bring in a new organization," said Mike Sheldon, managing partner and general manager, Interpublic Group of Cos.' Deutsch, Los Angeles. L.A. AAA is amenable to the proposal and the L.A. Ad Club is receptive, according to members of their boards.

The L.A. community has more than a half dozen major ad groups, some devoted to creative, women, media and other specialized interests, often with duplicating management and club offerings, all competing for dwindling resources in a down economy. Mr. Sheldon said surveys repeatedly find industry employees believe the groups are "irrelevant and stuck in the `70s."


But Mr. Sheldon said he, along with Scott Gilbert, CEO, Publicis Groupe's Saatchi & Saatchi, Torrance, Calif., and Richard Zien, president of independent shop Mendelsohn/Zien Advertising, LosAngeles, is working to build a new, unifying organization. Mr. Sheldon said one Los Angeles organization, with the resources to back strong programs, award shows and industry relief aid, could eventually be used to burnish the community's creative reputation.

Mr. Zien noted that the effort isn't a slam-dunk and will require a long dialogue, which results in compromise. "If not, it was a new business pitch that failed," he said. The Los Angeles effort comes a year after the 98-year-old San Francisco Ad Club folded.

In Motor City, another key industry market, The Adcraft Club of Detroit found itself operating in the red for the first time in many years for the fiscal year ended July 2002. It subsequently instituted cost-cutting measures, such as a suspension of pay increases for six staff members and a $2 increase, to $24, in ticket prices in the hopes of ending a $40,000 luncheon subsidy. Bob Guerrini, executive director of the club, said these changes will allow it to break even this year.

membership down

But Adcraft Club still faces the challenge of maintaining or increasing membership, which has slipped from its 1997-1998 peak of 4,000 to around 3,200. In order to guarantee its survival, the club has conducted research designed to develop a "guiding light," said David Martin, club president and former president of Omnicom Group's PentaCom.

The Advertising Club of Greater Boston has also been dealing with declining numbers. Membership has dropped from 7,000 three years ago to 6,000 at present. In response, the group has widened its net, changing its name to the Boston Idea Group, BIG, to reach out to non-ad agency members.

"I don't think Boston is struggling," said Lisa Unsworth, the club's new president and formerly an executive at Havas' Arnold Worldwide, Boston. "Like any provider of goods and services, we constantly try to make sure [the offerings are] fresh and relevant," she said, adding the organization's schedule now features job summits and networking events in addition to its annual awards show, educational seminars and public services work.

rough winds

The Chicago Advertising Federation also has problems. It has about 120 corporate members, down from 140 in 1999, and membership income is down 20%, said Kay Granath, executive director. The organization, which used to print 5,000 newsletters, now has dropped back 16% to 4,200, she said.

Nevertheless, at a national level, ad club membership is holding steady at 210 clubs nationwide with 40,000 members, according to the American Advertising Federation. "We feel there's an opportunity here" in areas such as networking, said Wally Snyder, president-CEO.

In New York, for example, one success has been a Small Business Forum, which kicked off its program with a postcard reading: "Ogilvy had Mather; BBD had O, Johnson had Johnson ... who do you have?"

Michael Vooss, president, Vooss Hanemann Associates, New York, an industry veteran who co-founded the forum said: "In our industry, people don't become unemployed, they become freelancers," and as such need services very unlike those of large holding-company owned shops, he said.

contributing: hillary chura, jean halliday, lisa sanders and ira teinowitz

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