Mad. Ave is hard-won address

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Cognizant of the trials of winning in the world's biggest ad market, agencies strong outside the Big Apple, from Arnold Worldwide to Wieden & Kennedy, are taking new steps to make it in New York. But whether it's a buy or build strategy being used, the odds of success are getting tougher in the face of an economy and mindset that's tested both industry leaders and boutiques-and sent some packing.

Manhattan is home to 47 of the country's top 100 agencies-and host for a handful of shops based elsewhere. But insiders, outsiders and observers maintain a New York ZIP code is still imperative for agencies to be taken seriously.

Aiming to create a footprint in New York, Havas Advertising's Arnold Worldwide is folding Jordan McGrath Case & Partners into its Boston-based network. The Manhattan office, rechristened Arnold McGrath, combines the strengths of the Boston hotshop with a venerable New York name.

"What New York doesn't need is another agency," said Ed Eskandarian, chairman-CEO of Arnold Worldwide Partners. "New York has its own culture and style and attitude. We felt that it would be best to get people who live and work there [and understand those things] and join them." The 260-person Arnold McGrath lifts Arnold to the country's 15th largest agency from No. 21, with U.S. revenue of $220.9 million, according to Advertising Age figures.

While it's always been hard for interlopers to establish themselves, now it's more daunting as the cream of Madison Avenue fights over small accounts and the real estate market sees offices vacated by hot shops tepid in New York City. Agencies that try to tough it out may have to wait a decade before coming even close to succeeding, said Arthur Anderson, managing principal at New York's Morgan Anderson Consulting.

"When you come to New York, you need the visibility for your office. That's hard to do in the best of times, so it's harder to do in the worst of times," Mr. Anderson said.

At Hill, Holliday, Connors, Cosmopulos's New York operation, the new managing director, David Kessler, said his 12-year-old Interpublic Group of Cos.' unit looks to double revenue in the next three years, hire its own rainmaker, buy an interactive or design firm, and sign up pharmaceutical, spirits and luxury accounts.


"Hill Holliday just has to get known better in the New York market. It's a separate agency. We're not just a satellite agency that handles regional efforts out of the main office," he said of the 130-person shop, which bills $200 million. "The engines are fired and just ready to take off."

California's Ground Zero set out for the Great White Way in the giddy days of the dot-com boom last fall. But thus far, the seven-year-old, Marina del Rey-based agency has not made a big splash in New York. Its office there has only five employees, projects with JetBlue Airways Corp. and others, and billings shy of $10 million.

Shops trying to establish a presence on the island include Bcom3 Group's Leo Burnett USA, with its 25-person service office, and Publicis Groupe's Fallon Worldwide, in New York for four years, picking up Conseco, Georgia-Pacific's corporate work and, in August, Timberland.

The going has been equally challenging for independent Wieden & Kennedy, which ventured into New York in 1995, charged with media buying for Nike. It became full service in 1997 when the Portland, Ore., mothership handed it Walt Disney Co.'s ESPN work. Clients now include other Nike brands, Footlocker and a new assignment from Avon Products. The office has 78 employees and billings of about $120 million. "We're doing fine there. Can we do better? Yeah," said Dave Luhr, chief operating officer. "I see opportunity, not concern."

Arnold McGrath Chairman-CEO Pat McGrath said things that made agencies special at home don't necessarily translate to the Big Apple. "It's difficult to transport the fire and the flame and whatever made you successful in Minneapolis or Los Angeles or Atlanta," he said. "It's hard to pick up and plunk it down somewhere else and make it work."

Contributing: Alice Z. Cuneo and Cara B. DiPasquale

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