I read with interest your run-down on the woes of trying to maintain a Los Angeles ad agency office ("The Big Squeeze: Bitter Competition for Few L.A. Accounts Sends Ad Firms Packing," Feb. 16).
May I suggest that the blues singers you quoted are, for the most part, either naive or misinformed? And that the reason they've tended to self-destruct is that they simply don't understand what's required to make a go of it?
Here are a few simple tips that would help them:
First, an agency office in Los Angeles can't be viewed as a way to service the local market. Rather, if an office is to grow and prosper, it must serve as a base from which to service multiple markets.
Second, while it's true that Los Angeles branch offices of major agencies seem willing to chase anything that can mist a mirror, whose fault is that? The actual expense, in staff hours and out-of-pocket expenses, of making a full-scale new-business presentation these days runs $100,000 or more (often, lots more), with, at best, a 50-50 chance of winning the account. If the account bills $1 million, the highest profit projection that can be reasonably hoped for is, say, $25,000. So of course they lose money on any account that bills less than multimillions--and the more they pitch, the more they lose.