Minneapolis: The Midwestern City That's a Marketing Overachiever

Both Big Marketers and Upstart Shops Abound Here

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Minneapolis skyline

Minneapolis boasts about as many major corporations as Minnesota has lakes. Well, not quite, but there's no doubt that this Midwestern city is an overachiever when it comes to marketer strength. The greater urban area is home to 18 Fortune 500 companies, including five in the top 100.

That's almost as many as the much-larger Chicago area, which has seven in the top 100. So it's no wonder that a lengthy list of ad agencies have set up shop in the Twin Cities of Minneapolis and St. Paul, surrounding big ad spenders such as General Mills, Target and Best Buy. This is also a smart and artsy town.

Minneapolis is the third-most literate city in the nation, according to a study by Central Connecticut State University. And the Twin Cities are No. 2 in the number of colleges per capita, trailing only Boston, according to the Pioneer Press local newspaper, which also notes that the metro region boasts more museums than every city except Chicago and Washington, D.C. Take that , Madison Avenue.

In our last city spotlight, we traveled to Paris and this time, we're taking a close look at the Minneapolis ad market.

Don't miss this year's Small Agency Conference and Awards, July 25 and 26 in Minneapolis.

AGENCIES
The world's top holding companies all have sizable and well-established Minneapolis agencies, and for a long time, they dominated the city. Those shops include Publicis Groupe 's Fallon , the third-largest shop in the market by revenue with 240 employees, according to the Ad Age DataCenter. Interpublic Group of Cos.' Carmichael Lynch ranks fourth, followed by Omnicom Group's Martin Williams; Campbell Mithun, part of Interpublic's McCann Worldgroup network; and MDC Partners' Colle & McVoy. But the market has shown it's really ripe for new agencies to set up show and, importantly, to grow. Today, the two largest agencies in town are independents: No. 1 Olson has 330 employees in its Minneapolis office, counting Target , Bauer Hockey and Northwestern Mutual among its clients, followed by Periscope at No. 2. Also calling Minneapolis home is loyalty and marketing-services behemoth Aimia, formerly Carlson, which was bought by Groupe Aeroplan in December 2009.

Minneapolis is home to a multitude of boutique agencies, many of which were founded by former employees of the old-guard shops. Mono, which counts Apple and MSNBC as clients, was founded by Jim Scott, Michael Hart and Chris Lange, who cut their teeth at agencies such as Fallon and Carmichael Lynch. Pocket Hercules was formed by Carmichael Lynch alumni Tom Camp and Jason Smith. Digital agency Space 150 was founded by Fallon alumni Billy Jurewicz. Other boutiques in the market include: Barrie D'Rozario Murphy, which recently picked up creative for Lands' End; Zeus Jones; Preston Kelly; Popular Front; Modern Climate; Hunt Adkins; Hello Viking; Gabriel deGrood Bendt; and Peterson Milla Hooks, helmed by former Fallonite Tom Nowak. The shop made its mark with its work for Target , but now counts Kmart, JC Penney, Gap's Athleta, Kmart and Sephora as clients.

MARKETERS
The biggest Minneapolis-based ad spender is Target , which ranked 19th nationally in 2011 at $1.6 billion, according to the Ad Age DataCenter. Agency executives credit the retailer with setting an experimental marketing mindset in town, while supporting the creative class and handing out plenty of work to local shops. Greater Minneapolis is also home to the nation's largest food ad-spender, General Mills, which ranks 35th overall. Plenty of other food marketers make their home here, including dairy cooperative Land O'Lakes, grocery giant Supervalu, Caribou Coffee, Buffalo Wild Wings, Mom Brands (formerly Malt-O-Meal) and CHS, whose products include crop nutrients and livestock feed. But this is hardly a farm town: The region is a home base for a diverse set of companies, including UnitedHealth Group, the massive insurer and health-care company, as well as U.S. Bancorp, Ameriprise Financial and 3M.

One big marketer that has hit a trouble spot locally is Best Buy. Once a fast riser, the retailer suffered in the face of more competition from online retailers. The company is closing 50 of its 1,100 big-box stores in the U.S., and exploring newer concepts such as a test store in suburban Minneapolis equipped with a help desk that looks like the Genius Bar at Apple stores, the Wall Street Journal recently reported.

MEDIA
The Twin Cities ranks as the nation's 15th-largest TV market, with 1.7 million TV homes, according to Nielsen. Public radio powerhouse American Public Media is based in St. Paul and known for popular programs such as "A Prairie Home Companion" and "Marketplace." The region is also one of the few medium-sized markets left with two daily newspapers: the Star Tribune, which emerged from bankruptcy in 2009 as a privately held company called Star Tribune Media Co., and Pioneer Press, owned by MediaNews Group.

STARTUPS/TECH
A lot of energy is coming from medical-related industries like biotech. For instance, Medtronic, a global medical tech company, is based here. Overall, the region is home to about 200 tech startups, estimated Jeff Pesek, cofounder of the website tech.mn, which covers the tech scene. With practical Midwestern sensibilities, tech workers are "very heads down, focused on making great products and less concerned with being the center of attention," he said.

WATERING HOLES
There is not a central gathering spot for the ad community. Rather, agencies have their own favorite hangouts. Chances are you'll find some Olson employees at Darby's, for instance, while PMH favors Bar Lurcat. Other hot spots include Cuzzy's, The Loop and Fulton's Brewery. Manny's Steakhouse in the W Hotel is a good power-lunch spot. Then there's the Bulldog, a beer pub that has been our preferred spot for two Ad Age Meetups in the Twin Cities. Minneapolis also has a fast-growing craft-beer scene.

CHALLENGES
Well, it gets really, really cold, for one. Even so, ad folks love the quality of life, including affordable living and a vibrant arts and music scene. Despite those perks, some execs say it can be difficult to lure creative talent from out of state, especially from outside of the Midwest. "You always appreciate when someone else wins something meaningful and brings it to town," said PMH's Mr. Nowak. "It's good from a recruiting standpoint. The more momentum there is , the better it is for everybody."

OPPORTUNITIES
The city is home to one of the more progressive diversity programs in the nation, BrandLab, which connects Minneapolis marketers and agencies with low-income high schools. This could evolve into a valuable source of homegrown talent. Also, a lot of Minneapolis agencies seem to be ahead of the curve by offering clients integrated services -- media to PR to social all under one roof -- which could pay big dividends down the road.

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