Pup Bites Dog

In the advertising business, it is not news when dog eats dog. But last week admen were watching a seven-week-old pup who had just taken a $3.5 million bite out of one of the biggest mastiffs in the business. The aggressive young pup was the Manhattan firm of Sullivan, Stauffer, Colwell & Bayles, Inc. Its chief victim: Ruthrauff & Ryan, Inc., sixth largest ad agency ($32 million a year in accounts).

S.S.C.&B. was the result of the biggest exodus in recent advertising history: four vice presidents walked out of Ruthrauff & Ryan all at once to start their own agency. Close on their heels went ten other key men and three fat R.&R. accounts. Raymond F. Sullivan, 48, chairman of R.&R.'s plans board, took along the $1.5 million-a-year Noxzema Chemical Co. account, which he had handled for more than 20 years, and the $500,000-a-year billings of Smith Bros. John P. Cohane, 34, brought along the $1.5 million business of the drug division of American Home Products (Anacin, BiSoDol, Kolynos).

Into the new firm with Sullivan and Cohane went Donald D. Stauffer, 45, and S. Heagan Bayles, 35, co-directors of R.&R.'s radio operations. Their fifth partner was the only principal in the new firm who was not an R.&R. man: Robert T. Colwell, 42, top creative man and head of the plans board at J. Walter Thompson, No. 1 U.S. ad agency.

Lessons Learned. Admen gossiped that the exodus was at least partly the result of personal differences between those who quit and R.&R.'s President Barry Ryan, who inherited his job from his father, Founder Frederick Behrens Ryan Sr. The founders of S.S.C.&B. denied the rumors, but they promptly adopted a rule against hiring a relative of any member of their new firm.

Probably more important was the feeling that too much of the take was going to R.&R. stockholders, too little to working executives. In new S.S.C.&B., only active executives will hold stock. If they leave the firm or die, their stock will have to be sold back to the firm. And before dividends are distributed to stockholders, 20% of the profits will be divided among twelve key executives, another 5% will be split by other "loyal employes."

The new agency also adopted another policy which showed that its founders had learned something while teaching R.&R. an expensive lesson. In S.S.C.&B. all top executives will participate in weekly conferences with clients, thus building up a personal contact between the client and the firm as a whole (and perhaps preventing any S.S.C.&B. man from taking an account along when he leaves).

By last week, S.S.C.&B had signed up accounts totaling more than $5 million, announced that it would take on only one more client this year. Admen wondered who the new client would be. Into S.S.C.&B. this week went another R.&R. vice president, 38-year-old William Spire. His job at R.&R.: account executive for the $3 million account of the American Tobacco Co. (Pall Mall, Lucky Strike).

This file is automatically generated by a robot program, so reader's discretion is required.