Pitch for Funds Is Thrown a Curve

Everything was carefully calculated. The letterhead atop the stationery tried to coax conservatives to keep reading. So, what better name to splash across it than that of Malcolm Forbes, editor of Forbes magazine?

And the stationery had to be slightly downsized--to give that appearance of coming personally from the editor’s desk. Even the number of pages was critical. Two pages didn’t appear to be meaty enough, but four pages seemed a bit bulky. They settled on three.

What’s being marketed here? Ronald Reagan--or at least his place in history. Two weeks ago, 720,000 requests for donations to the proposed $80-million Ronald Reagan Presidential Library were mailed to Forbes magazine subscribers. Ground-breaking for the library on the Stanford University campus is tentatively scheduled for this spring. Money raisers, who have already pooled nearly $30 million, hoped to attract big donations before favorable tax deductions expire.

Everything was painstakingly planned. Except one thing.

“Who could have predicted it?” posed Malcolm Forbes, referring to the Iranian arms scandal that has rocked the Reagan White House. The letter seeking donations of a minimum $100--which Forbes says he personally authored--went out in the mail just one day before details of the Iranian arms deal began to spill. “It’s probably safe to say that it hasn’t enhanced response,” Forbes said in a telephone interview.

“We haven’t been able to register any strong sentiment either way,” said Gary Jones, executive director of the Washington-based Ronald Reagan Presidential Foundation. “Sometimes people jump to support, while others back away.”

Indeed, so-called direct mail advertising can be a “dangerous undertaking,” said Rodger Schlickeisen, managing director of Craver, Matthews, Smith & Co., a consulting firm that has overseen direct mail fund raising for Sen. Edward M. Kennedy. “I’m sure they’re cursing the gods and kicking themselves for their timing.”

Still, one of the biggest-ever direct mail campaigns for a President is but a ripple in the ocean of this increasingly popular form of advertising. More than $15.6 billion was spent on direct mail last year, more than three times the $5.1 billion spent in 1977, according to a study by New York ad firm McCann-Erickson Worldwide.

Direct mail, which ranges from record clubs to charities, vastly eliminates waste in advertising by targeting audiences. But if the timing is affected by outside events, the results can be devastating. Experts say Reagan’s direct mail could still be a boom or a bust.

“The timing seems horrible, maybe even ridiculous,” said Ray Roel, editor of Direct Marketing, a trade magazine. “But when a person is under attack, it can also rally support.”

Those committed to Reagan “will not be bothered by what they perceive as the press blowing something way out of proportion,” said Russ Reid, president of Pasadena-based Russ Reid Co., a firm that raises money for nonprofit groups. Reagan’s Republican money-raisers rank among the best users of direct mail, said Junius Clark, president of the Assn. of Direct Marketing Agencies. “No one else has had near the sophistication.” And even with the continued onslaught of media reports on the Iranian arms scandal, the Reagan Library fund raising crew has no plans to change its tactics. Said Jones: “There’s no need to.”

Chiat/Day in for Some Major Changes

After a year of big gains--and big losses--1987 may be the year when Chiat/Day clamps the brakes on growth in New York, expects to pick up steam in California and continues a transition at the top that will eventually shake up the ad giant’s entire management.

“We’ve grown too fast,” said Jay Chiat, chairman and chief executive of the ad firm that now posts U.S. billings of $335 million a year. “We’ll probably not look for any new business for a while in New York,” he said in a phone interview from New York, where the company held budget meetings last week.

That strategy might sound unlikely for an outfit that lost $35 million of its West Coast business this year--when both Apple Computer and Nike bid adieu. On top of that, co-founder Guy Day said two weeks ago that he is leaving the agency to pursue a full-time career as an author.

But so far in 1986, the company has posted its best-ever growth year, adding $110 million in new business, including such major accounts as Sara Lee, Royal Caribbean Cruises and Gaines Dog Food. And senior officials at Fox Broadcasting say that Chiat/Day’s Los Angeles office is on the brink of inking an estimated $5-million contract with the new TV network.

Chiat/Day is clearly a company in transition. Not only is the 56-year-old Day leaving the firm, but a few months ago Jay Chiat, 54, stepped down as the New York office’s creative director--a hands-on position that oversees all advertisements that come out of the ad firm’s most successful office. Chiat now spends most of his time planning “longer-range” strategy.

That strategy, however, does not entirely rule out the possibility of retirement. “When it stops being fun, I’ll go,” said the firm’s 51% owner. Senior executives at the firm say that Chiat is delegating more of his duties in preparation for his departure, and that Lee Clow, president, is the likely successor. “We’re trying to transfer management to a second generation,” Chiat said, “but without impacting the product.”

It Takes Time to Stake Out One’s Turf

It’s not easy getting respect in the California ad market--even when your agency’s worldwide billings are $500 million. Just ask Richard Kelly, West Coast president of Scali, McCabe, Sloves, the New York ad firm with such major accounts as Volvo and Nikon. It opened a Los Angeles office one year ago but only recently landed its first sizeable West Coast client. “We’re trying to build roots in the community,” said Kelly, “but it takes time.”

Indeed, it took the agency nearly a year to land Camp Beverly Hills, a leisure clothing maker whose $1-million account it picked up last month. Then, late last week, the firm landed the account for California magazine, formerly called New West. Kelly said he hopes to create an ad campaign that will clearly differentiate the 350,000 circulation magazine from competitors such as Los Angeles magazine. But the agency also wanted the account for self-serving reasons. Said Kelly: “We’re looking for a way to shun our New York image.”

Problem’s the Same on the East Coast

Meanwhile, one of the West Coast’s most highly regarded firms, San Francisco-based Hal Riney & Partners, is having the same problem on the East Coast. The firm quietly set up a New York office four months ago and is still looking for its first New York account. Riney, with billings of $120 million, masterminded the wildly successful Bartles & Jaymes wine cooler campaign. But even if the firm finds success in the Big Apple, it will keep its heart--and its headquarters--in San Francisco. “I have no interest in living and working in New York,” Riney said.

Writer’s the Same, but Tune Is Different

The same folks who got you singing Levi’s “501 Blues” may soon have you humming in the shower with Procter & Gamble’s Prell shampoo. HLC, a Los Angeles commercial music production company, has signed with the New York ad firm, Wells, Rich, Green to write a lather-up jingle. The on-camera locks behind the shampoo will belong to super model Christie Brinkley.

Ad Agency Gained More Than It Lost

After a massive acquisition spurt earlier this year, Saatchi & Saatchi Co. PLC--the world’s largest ad firm--began losing clients faster than the Indianapolis Colts lose football games. In fact, it lost $403 million in business, as Nabisco Brands, Procter & Gamble and Colgate-Palmolive went elsewhere.

But the London-based company also picked up nearly $400 million in new business--including Xerox and Northwest Airlines. Some analysts, however, were surprised late last week when--for the 16th consecutive year--Saatchi posted record net income, up 72.4% to $55 million from $31.9 million in fiscal 1985. “Sure, some people were surprised,” said Anne McBride, a Saatchi spokeswoman. But there is little surprise in the company’s 1987 strategy. “We’ll continue to grow through acquisition,” she said.