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The debut reel of San Francisco's newest ad agency, Grant, Scott & Hurley, opens with a title card identifying the work as having been created while the partners were at Goodby, Silverstein & Partners, "a unit of Omnicom." They go on, however, to identify themselves as "not a unit of Omnicom."

It's a cute gag, but according to other San Francisco ad executives, they'll need more than that to differentiate themselves in the increasingly crowded local agency scene. The partners set up shop in temporary space in a city that, within the last year, has seen at least a half-dozen agencies open, either as start-ups or new offices of established New York shops (AA, July 21).

Grant Richards, 38, an art director and associate creative director, and Brian Hurley, 33, an account exec, were at Goodby for three years; Scott Aal, 35, a copywriter and associate creative director, was there for seven. They're hanging out their shingle with high hopes, no clients and an entertaining reel of spots for Polaroid Corp., Sutter Home Winery, Good Guys electronics stores, Unum Corp. and Major League Baseball.


The trio cite the usual reasons for deciding to go out on their own.

"It's just the nature of creative people to want to make their own decisions," said Mr. Aal. "At some point, you want to be at the end of that line that says, 'This is what we're going to present to the client.' "

"Goodby is an environment that teaches you to do a lot of things on your own," added Mr. Hurley, who has worked on the agency's California Milk Processor Board campaign as well as Foster Farms, Nike and Bell Helmets business.

Messrs. Richards and Aal are only the latest in a string of senior Goodby creatives to leave the agency; within the past year, seven have left the shop, in most cases to either start their own agencies or serve as creative directors at others. This list includes Bob Kerstetter, who formed Black Rocket last year with John Yost and Steve Stone from Hal Riney & Partners (Mr. Stone also had worked at Goodby); Sam Pond and Ron Walter, who formed Blazing Paradigm last year; and Harry Cocciolo and Sean Ehringer, who left to run the San Francisco office of London's Leagas Delaney.


With the recent increase in the number of small agencies billing less than $25 million in San Francisco, Grant has its work cut out for itself in creating an identity.

"They'll be able to do good work, but they have to define their niche," said Mike Shine, another former Goodbyite and partner in Butler, Shine & Stern, which opened its doors across the bay in Sausalito in 1993. "Clients tend to categorize agencies. Are they going to be just another Goodby spinoff?"

The trouble, he added, is that "finding a real point of difference is difficult."

The challenge, Mr. Shine suggested, will be for the agency to put its own spin on the work, "and not to just continue to do the kind of work they did at Goodby. Clients can go to Goodby for that-they need to see what they can get from them that they can't get down the road."

The partners agree that finding a way to stand out in San Francisco is going to be tough.

"We hope the work will set us apart, once we get some work produced," joked Mr. Richards, who's the son of Dallas-based Richards Group's Stan Richards. "Since we haven't done anything yet, one way to look at us is that we've done less bad work than any other agency in America."

Compounding the challenge they face is the similarity in philosophical bent that marks many of the San Francisco start-ups. It's really a cultural thing, an ethic handed down from Howard Gossage to Hal Riney to Jeff Goodby and Rich Silverstein.

"We're all from the same family," said Mr. Ehringer. "We come from the same gene pool."

Indeed, San Francisco is a town with a legacy of start-ups, noted Mr. Pond.

"If you look back at Hal and Rich and Jeff, they all started in the same way. Hal thumbed his nose at New York. It was all about starting your own thing here, and we've all got that in our blood," he said.

The question is, how thick can this blood get before family feuds start breaking out? Not surprisingly, most executives at both the start-up shops as well as the newcomers don't think the town is too crowded.

"Everyone here seems to be taking the attitude of the more the merrier," said Richard Warren, one of the partners in Montgomery North, a new agency formed by two former Kirshenbaum Bond & Partners executives from New York. Saying the market is cluttered with agencies "is like saying Silicon Valley is cluttered. If you're a good company, you'll succeed wherever you are."


There appears to be some kind of double standard in the city regarding feelings towards the locally based start-ups and the presence of the out-of-town newcomers. People seem concerned about the welfare of the start-ups, and there's a collegial atmosphere of cooperation

between the shops. It's not clear that the same sentiments extend to the new offices opened by the out-of-town agencies.

Mr. Ehringer, for example, questioned why any agency would open an office in the city merely to service a local account, which he contends can be handled from just about anywhere.

Most of the newcomers also expect to pursue accounts based locally and regionally, a move that will only compound the pressue on local start-ups. Some, however, are dubious of this prospect. "It's not like this region is dying for more agencies because clients want to work with San Francisco shops," Mr. Ehringer said.

Dean Stefanides of New York-based Hampel/Stefanides-which opened a San Francisco office earlier this year to handle its growing Packard Bell NEC's NEC Computer Systems Division business-tends to agree. When an out-of-town agency sets up shop in the city, he contended, it's because a client is based there or a real opportunity of landing one exists.

"No one says, 'Hey, let's open an agency in San Francisco.' If it's any other reason, it's bullshit," he said.

"We're not here to prove we can be here," said Bob Jeffrey, who has been busy setting up the Lowe & Partners/SMS office in the city. "We're here because we won Sun Microsystems and this is the smartest and best place to service it."

Still, the plans of the local offices of Lowe, Hampel and Kirshenbaum to pursue business will only make the overall agency scene in the city more competitive. This might not be a bad thing for the smaller start-ups, since many seem to be focusing on going after smaller clients that are seeking the kind of intelligent and often funny work that many have come to associate with San Francisco.

Messrs. Richards, Aal and Hurley suggest they'd be quite happy to go after $1 million accounts at this point; indeed, they claim to have relatively modest goals of getting off the ground with some project work as well as by free-lancing for other agencies.

The problem, noted Mr. Shine, is that in some instances, even Goodby is going after small pieces of business, particularly if it's a brand they want to work on.

For those accounts that worry about getting swallowed up at shops such as Riney and Goodby, there is now a wide range of local options, including Witt/Rylander, Odiorne Wilde Narraway & Partners, Black Rocket, Blazing Paradigm and now Grant, as well as other small shops.


The fascination with starting up in San Francisco seems fueled in large part by the hype surrounding its new-media community.

"There's so much energy around here, it's affecting everyone," said Mr. Pond. "It did something to the area. Advertising is only a part of the huge amount of creativity that's happening here. There's an aura around this city, it's like a halo."

This fuels the talent pool, which in turn attracts clients and vendors, "so the momentum becomes real, it's not a myth," Mr. Shine said.

He is not overly concerned about the fate of agencies like Grant.

"If there's going to be a falling out, I'm not so sure it's going to be the start-ups," he said, noting the cyclical nature of a business that's enchanted with whatever is new. "I think we'll see some of the older, more established

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