"When an agency is so glued to a major account, it doesn't have the time or wherewithal to look for other business," said Cy Schneider, executive vice president at the New York Bozell, Jacobs, Kenyon & Eckhardt, and former chairman of the agency's Los Angeles office. "And you can spend so much time on that account that the culture of your office becomes the culture of that account."
On Monday, Saatchi & Saatchi even announced that it was changing the name of its West Coast operations to Saatchi & Saatchi DFS/Pacific, in part, to try and attract more Pacific Rim business in addition to Toyota. "When clients have such an apparent dominance," said James Lindsey, chairman of the office, "there can be a problem in attracting other clients who are concerned that they won't get the attention they want."
Many Los Angeles ad firms originally opened to service a single advertiser. In some cases, that can be highly profitable--such as it has been with Rubin Postear and Honda. But it can also be risky. In May of 1987, the agency William Esty closed its Los Angeles office when it lost the Nissan ad business, although it has since reopened with another smaller client. And in 1988, the New York ad firm Scali, McCabe, Sloves backed out of the Los Angeles market two years after its key client, Continental/West airlines, went belly-up before the agency could create its first ad.
One way to avoid such headaches is to rely less on a single client. "That's easier said then done," said Craig Campbell, president of Campbell & Wagman, a 2-year-old agency with annual billings of $53 million that depends on First Interstate Bancorp for well over 60% of its business.
"Clearly, that's too much," said Campbell, whose agency has slowly picked up a few other advertisers, including Marshall's department stores. But with a client as big as First Interstate, he said, "some potential clients won't even talk with us because they feel we're dominated by one account."
Few Los Angeles ad agencies are so dominated by a single client as Chiat/Day is by the Japanese car maker Nissan. More than $200 million of the office's $250 million in annual billings are from Nissan.
"I'm sure," said Advertising Age's Danzig, "Jay Chiat has spent some time wondering what would happen to his Los Angeles office if it lost Nissan."
In fact, Herskovitz said, Chiat/Day officials have even been consultants to "thirtysomething." Chiat/Day was repaid the other week when its name was passingly mentioned on the show.
"But we don't spend much time thinking, 'Oh no, what if we lost this or what if we lost that?,' although that may be the nature of many Los Angeles agencies," said Lee Clow, president of Chiat/Day. "That's because there are only so many clients to go around here. For a West Coast ad agency, an account like Nissan is the gold ring."
For years, the gold ring at the Los Angeles office of Ogilvy & Mather was Mattel. Just five years ago, the toy maker accounted for nearly 80% of Ogilvy's business. "We were perceived as an agency that just did toy advertising," said Gerald McGee, managing director at Ogilvy.
Now, however, Mattel represents less than half of the office's total billings, said McGee. For one thing, Mattel has since cut back on advertising. And it also handed some of its advertising to a competing agency, Foote, Cone & Belding. This forced McGee to hunt up new business, including clients like Carnation, Microsoft Corp. and Tandem Computer. But none of this new business came easy.
About two years ago, Ogilvy's New York office put the pressure on McGee to find more business in Los Angeles. It got so intense that the Adweek magazine even ran a story that detailed the tremendous pressure McGee was under. McGee reacted as any creative ad man would. He pinned a special button to his suit that read: "I'm under tremendous pressure."
So is Herskovitz. After all, the Hollywood-invented ad agency that has been a key setting for "thirtysomething" is history. "We even destroyed the set," Herskovitz said. "It was very weird. A lot of people who work around here still can't believe it's gone."
Aussie Firm's S.F. Chief to Step Down
Just one month after Chiat/Day made a bid for the Australian ad firm Mojo/MDA, the chairman of Mojo's U.S. headquarters in San Francisco has resigned.
Donald F. Dorward, 57, said Monday that he would leave the agency April 30. The office is scheduled to be merged with Chiat/Day's San Francisco office, and Dorward said in an interview Monday that he didn't intend to play second fiddle to anyone.
"I certainly haven't been forced out," said Dorward, who would not reveal his plans. "As a matter of fact, I approached them about it. But I'm too old to be the No. 2 guy and too young to retire."
The newly combined office would be run by Fred Goldberg, president and chief executive of Chiat/Day's San Francisco office.
New Agency Likes Rent-A-Wreck's Name
Rent-A-Wreck has long been apologizing for its oddball name in its advertising.