Marketing Madison Avenue

Dan Seymour outlined two primary goals when he became president of J. Walter Thompson Co. five years ago. A onetime radio announcer, Seymour emphasized that he intended to safeguard those factors--particularly talent--that have helped 105-year-old J.W.T. become the world's biggest advertising agency. He would also strive, he said, to acquire new "tools" and people to enable it to grow still further.

To do that, the firm that competitors call "the General Motors of the agency business" last week announced plans to invite the public along for the ride. J.W.T. filed with the Securities and Exchange Commission to make a public stock offering. This would enable the agency to reward its people more handsomely and give it cash to expand beyond last year's record billings of $638 million.

Gift for Creativity. J.W.T. aims to market 750,000 of its 2,700,000 shares, which are now all held by the agency's executives and its retirement fund. The sale will begin about June, at a price still to be determined. Of these shares, 350,000 will come from the company it self, and 109,709 from the retirement fund, which will still retain the largest block of stock. The rest will come from the firm's officers, who are being asked to sell up to 20% of their holdings for the issue.

With the new funds and its own stock, J.W.T. will be able to make additional acquisitions. It already owns a Puerto Rican insurance company and controls a New Jersey electronics firm. By establishing a market for the stock, the offering will fix its value and make it unnecessary for the company to buy back shares held by retiring executives. The offering will also help solve Seymour's problem of "how to give 7,500 employees in 55 offices around the world the idea of a real stake" in the firm's annual gross. J.W.T. will be able to issue more generous stock options, which U.S. firms find are increasingly necessary to attract and keep creative people.

Ten other advertising agencies, including five of the largest,* have gone public since 1962. Their stocks have turned in mixed performances, and few have kept pace with agency growth. Some analysts sense a general waning of public interest in stocks of service companies, particularly those of ad agencies. Investors tend to regard the business as unstable and its major asset--alent--as difficult to evaluate.

Because it is so big and steady, J.W.T. may change all this. It has 800 clients around the world, including Ford, Unilever, Pan Am, Eastman Kodak and RCA. In the past month, it has picked up the accounts of two big-billing brewers, Hamm's of St. Paul and Guinness of England. A majority of clients have been with the agency for 20 years or more, and its employees have an average tenure of seven years, which is a long time by Madison Avenue standards. Thompson has increased its billings by 36% in the past five years. In 1968, they went up a record $47.6 million--more than the total billings of all but the top 30 of the nation's ad agencies.

* Foote, Cone and Belding; Doyle Dane Bernbach; Grey; Ogilvy and Mather International; and Papert, Koenig, Lois.

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