WESTWARD HO: THERE'S A SCRAMBLE TO THE COAST AS AGENCIES MINE RICH LODES OF AD BUSINESS, TALENT

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A growing number of ad agencies are heading west, lured by dreams of striking it rich with a new base of clients and mining the coast's fabled core of creative talent.

Nearly a dozen established agencies have ventured out to the West Coast over the past two years, and at least four more are currently scouring the region for agencies to buy.

One of the four unidentified agencies is based outside the U.S., another's hometown is New York and the others are from elsewhere in the U.S., ad executives said.

BY BUYOUT OR FROM SCRATCH

They join a steady stream of agencies looking to set up shop from Seattle to Los Angeles, either by acquisition in what has become a seller's market or by building an office from scratch.

In some cases, agencies that made earlier, unsuccessful trips west are returning to take another shot at it.

Most are motivated primarily by the potential for winning sizable accounts-especially in the high-tech arena-of West Coast-based marketers with an appreciation for cutting-edge creative.

SAN FRANCISCO'S ALLURE

Of all the West Coast cities, San Francisco is the one with the most allure.

"San Francisco is a destination advertising market," said Jerry Gibbons, exec VP for the Western Region of the American Association of Advertising Agencies. He said the city's agencies have a reputation that lures advertisers from around the nation.

That reputation has been built on the creative sweat of Hal Riney of Hal Riney & Partners and such proteges as Jeff Goodby and Rich Silverstein of Goodby, Silverstein & Partners, and the late Mike Koelker of Foote, Cone & Belding.

Beyond the Bay, the West Coast's cachet is also fueled by such creative hot shops as Portland, Ore.-based Wieden & Kennedy; TBWA Chiat/Day, Venice, Calif.; and BBDO Worldwide's Los Angeles office.

These agencies have been incubators for creative talent-talent desired by agencies that head west to siphon from that pool.

FROM BOSTON TO S.F.

"If you want to open an oil well, you have to go where the oil is," said William Heater, president and creative director of Heater Advertising, Boston.

Mr. Heater has enlisted two well-known San Francisco creatives to head his new Heater West-Beth Koelker, former FCB creative and Mr. Koelker's widow, and FCB veteran Ken Woodard. Mr. Heater hopes the agency, now an office helping with Reebok International work, will acquire some of its own accounts.

Euro RSCG Dahlin Smith White opened its San Francisco office as a way of snagging some creatives who would not be interested in living near the agency's Salt Lake City home, said executives at headquarters. So eager was Dahlin to operate in San Francisco that even before the office had actually opened, it had a phone number and was taking calls-which were then forwarded to Salt Lake City.

This spring, Alan Reighard was named managing director of the Bay area outpost and a team of account, creative and media staffers was hired. The office is expected to grow to 30 by yearend; its first account: San Francisco Opera.

MARTIN IN SANTA MONICA

Also setting up shop to house creatives is Lowe Group's Martin Agency, which opened in the booming Santa Monica, Calif., ad hamlet.

Martin President-Creative Director "Mike Hughes and I are looking for whatever it takes to get the best work possible," said Jean Robaire, senior VP-creative director at Martin Creative LA.

Mr. Robaire, a veteran of the southern California agency scene, previously was a principal in Stein Robaire Helm, which disbanded.

Currently, Martin Creative LA is working primarily on accounts based at Martin's Richmond, Va., headquarters-such as Remy Amerique's Remy Martin cognac-but it hopes to grow from its current seven-employee base to 25.

"Our existence will be justified by the quality of the work," Mr. Robaire said, not on the dollar amount of billings the office acquires.

MINING NEW BUSINESS

Other agencies, already content with their creative resources, have expanded to the West Coast in a specific search for new business.

"We are the gold miners," said Peter Drakoulias, senior VP-director of business development at New York-based Deutsch.

Since his agency opened a Santa Monica office two years ago, Deutsch has snagged two pieces of West Coast business worth close to $100 million-creative for the Bank of America account and media buying and some creative for The Gap Inc.'s Old Navy Co.

Deutsch, Mr. Drakoulias said, deliberately decided to locate in southern California instead of the north because "we wanted to go to a town that needed to have the [creative] bar raised a little bit."

Interpublic Group of Cos.' Lowe & Partners/SMS, after closing its doors in San Francisco in 1989, is taking another run at the market, opening an office to service the Oral-B Laboratories' consumer advertising account and Sun Microsystems. Lowe also is a finalist in the $6 million to $8 million Eddie Bauer Inc. pitch.

Its immediate parent, Lowe Group, has picked up a minority stake in San Francisco shop Goldberg Moser O'Neill.

A minority stake in Winkler Advertising, a tech agency in San Francisco, was recently purchased by New York-based Grey Advertising. Grey already had its own office in the city and plans to raise its profile by moving the office to a more visible location on downtown's tony Maiden Lane.

DDB Needham Worldwide reopened in San Francisco one year ago, after a two-year hiatus, by taking on the $80 million Clorox Co. business forced out of FCB by a client conflict.

`PICKING OVER BONES'

This West Coast gold rush, however, could turn into shops feeding upon one another if available business becomes insufficient to support them.

"More vultures are picking over the bones," said Tom Bedecarre, chairman of Citron Haligman Bedecarre, San Francisco, a creative shop with $100 million in billings and one of the finalists competing against Lowe for Eddie Bauer.

Another obstacle for some West Coast outposts is the potential for account conflicts with their East Coast home bases. While it's nice to win new business, the larger, older offices are unwilling to anger their own clients by creating a conflict.

Frequently, West Coast branch offices are barred from pitching lucrative West Coast business due to conflicts.

`STEPCHILD' AGENCIES

"Agencies in California that are subsidiaries of New York and Chicago agencies always end up the stepchild," said Colin Probert, partner and president at Goodby, citing FCB's San Francisco office, which has been forced to give up more than $100 million in billings in recent years due to conflicts with the New York and Chicago operations.

There's also the intangible-but much mentioned-difference in corporate cultures between East and West Coast agencies.

Local agency executives point skeptically to East Coast agencies that take over West Coast shops that-though already successful-are forced to fit into a new mold not entirely conducive to doing business out West.

UP TO COMPETITION?

"It will be interesting to see whether all these New Yorkers are up to" competing with native West Coast agencies, said agency principal Mr. Goodby.

Goodby's Mr. Probert said part of the reason his shop and other creative agencies have been successful is "who we are, rather than that we are in San Francisco. There are not a lot of clients here waiting for Kirshenbaum & Bond."

New York-based Kirshenbaum Bond & Partners is one of those attempting to move into northern California. Trying to avoid a conflict with Citibank as it pitches the Charles Schwab & Co. electronic trading account, Kirshenbaum created a new entity called Montgomery North, operating in San Francisco out of an executive office suite it shares with other companies.

Kirshenbaum also is reported to be pitching an undisclosed piece of West Coast business that would allow it to open under its own name.

RESISTING THE CALL OF THE WEST

Some agencies are resisting the urge to go West. M&C Saatchi considered opening a West Coast office to service its Packard Bell NEC business, but decided the account was adequately serviced out of its New York office.

Alex Bogusky, partner and creative director at Crispin Porter Bogusky, said his Miami-based agency had considered westward expansion but then decided to sit tight.

"A lot of the best agencies around are [already] in San Francisco-big, medium, small," he said. "There's not a lack of anything in San Francisco."

Yet for those that venture West, the new mix is bound to add to what already is a rich creative culture.

"The new agencies have different points of view, different resources and different attitudes," said Mr. Gibbons of the Four A's Western Region. "It raises the bar in terms of work."

Contributing: Bradley Johnson, Laura Petrecca

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