Mini-Shops With Maxi-Clout

By Christine Gorman

In the advertising industry, small shops are thinking big these days. Fast- moving and feisty, the upstarts are luring a growing share of blue-chip accounts away from the Madison Avenue behemoths. While agencies like Manhattan's Young & Rubicam (1987 billings: $4.9 billion) and London's Saatchi ) & Saatchi ($4.6 billion) have tried to dominate the business by taking over competitors, firms less than one-tenth their size are attracting large ad accounts to such off-the-avenue cities as Boston and Minneapolis. In mid- August the Richards Group of Dallas ($97 million) snared the $15 million account for the Long John Silver's restaurant chain from Chicago's Foote, Cone & Belding ($2.3 billion). In July Nissan awarded a $50 million account for the Infiniti, a new luxury auto to be introduced next year, to Boston's Hill Holliday, Connors, Cosmopulos ($290 million).

Such clients appreciate small shops because the advertisers can command the faithful attention of the agencies' top talent. Doing business with a small firm typically entitles the client to deal with the boss, while at a mega- agency the upper echelon usually concentrates on major accounts like IBM (budget: $138 million). But the greatest lure is the little shops' reputation for creativity. In last June's annual Clio Awards ceremony, the industry's equivalent of Oscar night, Fallon McElligott of Minneapolis ($142 million) won twelve prizes. The most honored Madison Avenue contender, BBDO Worldwide ($3.7 billion), won seven. Among the Minnesota firm's winners was an ad for a pregnancy-prevention campaign that portrays an expectant teenager under the line, "If you're embarrassed by a pimple, try explaining this." A reason for the agency's success, says its chairman, Patrick Fallon, is that only one creative director reviews all text and designs. By comparison, submitting an idea to the management committee at a big agency, Fallon says, is like "having your work bitten to death by ducks."

The mega-firms are not endangered, of course, because they provide many services that smaller firms cannot. Big corporations that want to sell their products globally often prefer to deal with agencies that maintain large research departments and branch offices all around the world. Because they deal in volume, major agencies can also offer some services at more competitive prices.

For many clients, smaller agencies like San Francisco's Hal Riney & Partners ($200 million) are an excellent fit. Three years ago, the firm won an $800,000 advertising account for Calistoga, a Northern California bottled- water brand owned by Perrier. Riney's nostalgic soft-sell campaign, which now features a freckle-faced boy from 1920s-era California, helped boost sales 100% in three years. It also landed Riney the national account for Perrier in 1986, which is currently worth $20 million. The most impressive sign that small agencies have come into their own may be Riney's capture last May of General Motors' $100 million account for its new nameplate, the forthcoming Saturn. For the most successful small agencies, the biggest challenge may be to stay that way.

With reporting by Blake Hallanan/San Francisco and Marc Hequet/St. Paul