"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." - Charles Mackay
Tuesday, January 22, 2008
Is smaller better? Specialized "boutique" ad agencies are springing up
By Nancy Traver

First there were boutiques. Then there were boutique banks. Now there are boutique ad agencies. Some call them virtual ad agencies. They're small. They're specialized. They use one magic word over and over again - outsourcing. That means a lot of what they do is actually done by others.

Like the YKP Group. Laura King, 40, president of YKP, explains that her company, founded in June 1998, has a singular, specialized focus - senior health care. "As competitive as the advertising industry is, it's a good idea to have a niche," says King. "And senior health care is a field that is only growing."

Her staff of four is a full-service marketing and advertising agency, although she hires outsiders to do some of the work. "We do a lot of educational-type programs," she says. "For me, that's the most fun and valuable."

King is a survivor of several large corporate mergers and sellouts. Formerly director of communications with Horizon/CMS Health Care Corporation, she watched as Horizon was sold in October 1997 to Healthsouth Corp. of Birmingham, Ala., which then spun off the long-term care components to Integrated Health Services, based in Maryland. All 200 employees were laid off in several waves and many moved to other states. Some executives, like King, launched new firms in Albuquerque. King explains that her firm was given the initials of the three friends who sat around Double Rainbow Cafe late one night and brainstormed, forming a new advertising agency. Even though she recently bought out her partner, she decided to keep the original name "as a tie to my coffee shop roots," she jokes.

Her clients are many of the executives she once worked with at Horizon. One is Peak Medical Corp., which is headquartered in Albuquerque and serves the Rocky Mountain corridor and Oklahoma. Peak has 23 facilities, for which YKP handles all the marketing.

"I've been able to get a sense of the unique expertise I've acquired," King says. "I think there's a lot of potential to be serving large national health-care companies in the area of senior living and senior options, and I'm excited about doing that."

King's company is one among a growing nationwide trend. These small ad agencies serve one particular market exclusively.

Glen Fest, associate editor at Adweek, says those who launch a boutique have usually been very successful at a major agency. "They break away, decide they want to run their own shop and proceed from there," Fest says. "You generally see good, creative work coming from these small shops. Their work is often a little different, like, 'Come to me if you want something that is edgy-creative.'"

Fest says the boutiques focus on the youth, health-care, and high-tech markets. Unica Alternative Advertising is one firm that specializes in technology, concentrating mainly on producing CD-Roms. President Norma Ruiz, who founded the agency a year ago and leads a staff of three, says she works out of her home with software that allows her to do 70 percent of the pre-editing before she ever enters a TV studio, thereby saving her clients on studio time, which usually runs $300 an hour. "All of my staff work on a pre-project basis, which saves the clients money because they're not paying for all the projects all of the time," she says.

Unica has produced a CD-Rom on substance abuse for the Albuquerque Area Indian Health Board and is talking to PNM and the National Guard. "A year ago, such organizations wouldn't even meet with us," she says. "It seems like people have suddenly awakened to the idea of high tech."

Others believe that the high-tech companies moving into the Albuquerque economy will provide a new backbone for the advertising industry here. Steve McKee, president of Mckee Wallwork Advertising, points to the work of Technology Ventures Corporation and Albuquerque Economic Development, organizations that have contributed to high-tech employment. "People are looking for opportunities to invest here," says McKee. "It means good things are happening. These companies will need our services in the future."

McKee notes that his firm, with its staff of nine, is an advertising agency, leaving public relations and design to other companies. "We work on the Michael Jordan principle," he says. "We feel we can only be really good at one thing." McKee Wallwork's major accounts are Delta Dental, Presbyterian Healthcare and High Desert.

At Complete Advertising, creative director and vice president John Ramsey says he has a similar goal. He outsources graphic art and photography, rather than trying to do everything under one roof. Outsourcing the work he doesn't want to deal with helps him focus on what interests him, like copywriting.

"Media costs are skyrocketing, but this is one way to reduce the costs to the clients and give them more value for their dollar," says Ramsey, who runs the company with president Peggy Schmidt.

Ramsey notes that, unlike Denver or Phoenix, few worldwide corporations are headquartered in Albuquerque. "That means ad budgets here are often not very big," he says. "It makes for a lot of creative challenges. You've got to get the job done for not much money." Complete's major clients include AMREP, Sandia Area Federal Credit Union, Quality Pontiac and Quality Jeep, as well as a new company called Airport Valet.

While some firms limit the types of work they do themselves, others choose their clients carefully so they can focus on specific themes. One such agency is Cooney Watson & Associates, founded in 1986. Patti Watson, vice president, says, "We take work that affects the quality of life in New Mexico. One of our key commitments is to do work that makes a difference in life."

The firm's biggest account is the City of Albuquerque's water conservation program. Another account is the New Mexico Department of Health. Watson, whose father and grandfather were water attorneys, explained that she and her partner, James D. Cooney, president of the finn, like to take work that is educational rather than "about convincing people to spend their money."

In the era of boutique agencies, Rick Johnson & Co., Inc., is the 800-pound gorilla. Founded 22 years ago, and now with a staff of 75, the company is the largest ad agency between Dallas and Los Angeles. It has one branch in Phoenix and, according to chairman Rick Johnson, is interested in opening offices in other western cities. Some of Johnson's major accounts are Furr's, the State of New Mexico Departments of Tourism and Economic Development, St. Joseph's Healthcare, McDonald's in California, PNM, and Giant Industries, which is headquartered in Scottsdale, Ariz.

Johnson, who owns and runs his company with his wife, president Debbie Johnson, says his agency is one of the few in New Mexico that can actually offer a career to the talented professionals he employs. "Outsourcing is not the most reliable way to get stuff done. Plus, all of your work starts looking so different when you've got so many different people handling your art. We think the way we do it here is the best to ensure reliability and predictability."

Johnson believes that running a boutique agency can provide a good income for one or two people, but it cannot possibly begin to handle the depth of all the marketing needs for any major business. "They'll use the boutiques from time to time for projects," says Johnson. "But the large businesses still want the bench strength that we've got."

Russ Roundtree, president of Impressions Advertising, Inc., in Santa Fe, says he is also looking to grow, go regional, and capture some business from major corporations. Roundtree founded his seven-person firm in 1985 as a full-service agency, providing graphic design, advertising, marketing and public relations. The agency's specialty is hospitality and tourism. Its major clients are the Santa Fe Convention and Visitors Bureau, the Bishop's Lodge, Santa Fe Accommodations and the eight northern Indian pueblos.

"Because we don't have large pockets of industry here, it makes sense to go outside our boundaries," says Roundtree. "Besides, the landscape has changed over the last ten years, first with faxing and now e-mail. You can pass e-mail back and forth all day long to clients all over the world."

Steve Wingfield, vice president of Signal Creative, a full-service, eight-person firm, agrees. "The creative business is not known for being geographically limited," he says. "We can compete with big firms and we're not going to limit ourselves."

Signal serves several big firms, including Lovelace Health Systems, Intuit Inc. and Intel Corp. But the goal of his firm is not to grow to the point of being "a monster agency." Winfield says Signal is most interested in having "clients for whom we can be very creative."

Nancy Traver writes frequently for the New Mexico Business Journal.


posted by R J Noriega at 10:11 AM | Permalink |


free hit counters
Best Buy Coupon