Agencies sold on cooperation

Independent shops looking for an advantage

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As competitors, ad executives Michael Brunner, Rick Milenthal and Robert Neville don't share intimate details on their latest account losses and wins.

But that doesn't mean they don't see the value in cooperation.

This fall, representatives from six independent ad agency networks gathered in Paris to talk about trying to work together more often and more effectively.

If anything comes of the proposal, it could be another way for independent shops to position themselves as alternatives to the massive agencies that bring their clients the world by owning offices all over it.

Or, it could turn out to be a fine idea that never quite gets past the industry's competitive realities.

"I think now we have a good group," said Cheri Gmiter, executive director of the Magnet marketing and advertising global network.

There's been talk of doing something collaborative for a while, according to the former KDKA radio sales manager who works out of an office space on Perry Highway running a network that links more than 30 agencies, including Downtown-based Blattner Brunner.

The fall meeting organized by the managing director of an advertising network in London also included Worldwide Partners Inc., which counts as a member Mr. Milenthal's Ten United agency with offices in Pittsburgh and Columbus, Ohio, and the Transworld Advertising Agency Network that includes Mr. Neville's Krome Communications.

No doubt smaller shops are outnumbered on many levels. Omnicom Group, the parent company of Pittsburgh's Ketchum public relations office, had almost $11.4 billion in revenue in 2006.

By comparison, the six independent networks that met in Paris claim more than $2 billion in global revenues.

The slowing U.S. economy has been pinching more than a few ad clients, who are shifting dollars away from traditional mediums and demanding their agencies help them do more with less. In the first nine months of the year, ad spending rose just 0.2 percent, according to data from TNS Media Intelligence, the leading provider of strategic advertising and marketing information.

Ad clients that once worked with one or two agencies to handle TV, radio, print and promotional work now may divide their accounts between 10 shops that specialize in media placement, media buying, digital design, shopper marketing and so on, said Joanne Davis, a New York consultant on client agency relations.

As a result, "Agencies have to develop better collaborative skills," she said. Clients insist on it.

That new imperative, combined with the world-flattening power of technology, challenges rules used for years in ad agency networks.

For decades, many networks only allowed one shop per market but some have loosened that recently to bring in specialists in key areas.

Still, the new-found intimacy is not without limits.

"We're not going to share any of our financial data," said Mr. Neville, president and chief executive officer of Krome. "The line is going to be drawn there."

As a first step, action plans laid out during the fall meeting call for trying to get members of the six networks to share some market research. Drawing on information from 400 agencies rather than just 50 or even 100 could make results richer and more significant.

"I think we gain more knowledge and gain more of a broadbased information setup," said Ms. Gmiter.

Eventually, it might be possible to use partner networks within the larger network to fill needs in certain markets.

Not long ago, Krome got word that video needed to be shot in Oregon the next day. The staff called a West Coast shop that was part of its agency network and the work got done.

"We could trust them," said Mr. Neville.

In the right situation, network members can even pitch new business together, said Mr. Milenthal, who serves as chairman of Worldwide Partners as well as chairman of Ten United.

Getting shops to work together seamlessly is a challenge even for those owned by the same huge parent company, said Steve Boehler, founder of the client/agency consulting firm Mercer Island Group outside of Seattle.

But being a part of internationally linked networks can give independent shops a better shot with U.S. companies considering a move across the borders.

They want to know their agencies have an understanding of such issues and contacts abroad. "It's more important and it will continue to be more important," agreed Ms. Davis.

A year ago, Mr. Milenthal joined a group of Worldwide Partners participants in a trip to China to learn more about the market there. The visit was hosted by an independent agency there that is part of the network.

If networks forming a mega-network make members just that more connected and leverages their knowledge, said Mr. Boehler, it could turn out to be a really good idea.

As any creative director might say, it's all in the execution.


Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018.


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