But the principals of some of the industry's last remaining strong independents believe global consolidation is just an excuse for cashing in while buyers are willing to pay premium prices.
`RINEY SAW CASH'
"You gotta be global -- who made that up?" asked David Suissa, chairman and executive creative director at Suissa Miller, Los Angeles, a fast growing independent shop. "Riney saw cash," he said, referring to the sale last week of Hal Riney & Partners, San Francisco, to Publicis. "It's nothing more than that."
Jonathan Bond, co-chairman, Kirshenbaum Bond & Partners, New York, said being part of a large company doesn't necessarily help small agencies compete.
"The clients that want a real global agency aren't going to go to the agency owned by a global network, they're going to go to the network itself," he said.
More important than globalization, too, are the motivations of the sellers, usually centered around the ages and personal goals of an agency's founders.
"As management reaches retirement age, they'll have to look at ways to get their investment out of the agency," said Ed Eskandarian, chairman-CEO, Arnold Communications, Boston. "The only way they can do that sometimes is through a sale."
Bethesda, Md.-based Snyder Communications acquired Arnold in late March. Mr. Eskandarian is 61; Mr. Riney is 65.
Others, though, say the increasingly global nature of business does make it more difficult for shops to compete unless they can tap the worldwide resources of a larger organization.
SIZE PAYS A PENALTY
Gerry Rubin, president-CEO of Rubin Postaer & Associates, Santa Monica, Calif., said his shop was penalized for its size when it was cut from the $50 million U S West Communications review. Still, Rubin Postaer counts America Honda Motor Co. as its biggest client and has actually been encouraged by the automaker to remain independent.
"You can tap the ore in the mine you already have as opposed to going out and mining somebody else's ore," Mr. Rubin said.
Creative powerhouse Wieden & Kennedy, Portland, Ore., has an easy answer for agencies wondering how they can remain on their own. "It's simple," said President Dan Wieden. "Don't sell."
Mr. Wieden plans to continue to build his agency by establishing outposts in key markets and controlling the operations from a "central kitchen" in Portland.
WIEDEN STILL IS COVETED
Wieden is one of the most coveted of the remaining independents, along with Fallon McElligott, Minneapolis.
The sale of Riney follows sales this year by such independents as Hill, Holliday, Connors, Cosmopulos, Boston, and Carmichael Lynch, Minneapolis. The top holding companies, including Interpublic Group of Cos. and WPP Group, are actively looking to make deals.
John Wren, president-CEO of Omnicom Group, said he's "not in any conversations [with any of the remaining independent agencies] at any level."
Mullen, Wenham, Mass., is rumored to be talking to suitors, as is Warwick Baker O'Neill, New York.
"We're not in negotiations at this point," Chairman-CEO Wilder Baker said.
For fiercely independent shops such as Riney, selling out raises the question of how independently the agency can continue to operate in a bigger organization.
RUN LIKE A FAMILY
"You wonder with a different parent if you can operate the same way, with the same level of independence," said Ellis Verdi, president of DeVito/Verdi, New York.
Many smaller agencies are run like a family, he said, and a takeover is similar to bringing in a new "mom and dad."
Contributing: Mercedes M. Cardona