Some of Los Angeles’ Smaller Ad Agencies Are Bucking Industry Blues

These days, you’d have to be pretty daring--or pretty dumb--to put your home at risk to open an ad agency in Los Angeles.

But that’s what Cary Sacks and John Fuller did. Even as business in the Los Angeles ad market hit the skids nine months ago, the two daredevils left the local office of Della Femina McNamee and took out fat home equity loans to open Sacks/Fuller Advertising.

“We knew we couldn’t goof up,” said John Fuller, the agency president. “If we did, we wouldn’t only lose our jobs, we’d lose our homes.”

For the time being, their jobs--and homes--appear to be safe. In less than a year, their agency has nearly doubled in size and picked up several new clients, including the big boot retailer, Thieves Market. “I’m not saying we’re rolling in dough,” said Cary Sacks, creative director at the ad firm, “but we’re not worrying about how we’re going to pay next month’s rent.”

This is no accident. A surprising number of small agencies in the Los Angeles market are bucking the industry blues. At a time when many of the area’s big agencies such as Chiat/Day/Mojo and J. Walter Thompson are chopping, squeezing and cutting back, plenty of smaller ad shops say things have never been better.

“What recession? What slowdown?” posed Raymond Coen, whose 1 1/2-year-old agency, Coen, Kalis & Moiselle, creates ads for Hamburger Hamlet. “We read all the doom and gloom articles and wonder what they’re talking about. Our business continues to grow.”

Indeed, many small agencies in Los Angeles are benefiting from budget-conscious advertisers who are looking to reduce advertising costs. Instead of hiring fancy-sounding agencies with Madison Avenue price tags, they are turning to the smaller shops whose executives often have at least some big agency training.

Although smaller agencies seldom have the broad background and industry connections of the big shops, they often are less expensive, far more aggressive and able to devote more individual attention to clients.

“If the country is not in a recession, the advertising industry certainly is,” said Charles Sharp, a headhunter with the Los Angeles firm Charles Sharp & Associates. “But many smaller agencies have excellent client bases that have not been affected by the slowdown.”

This is not to say every small agency is enjoying a heyday. Just last month, the year-old Los Angeles agency Albright/Labhart announced that it was closing its doors. And others still may follow. But if there is any up side to the nagging downturn that has hit the advertising industry, it is that some smaller ad shops are actually benefiting from it.

Perhaps the biggest success story of any small agency in town is the 2-year-old firm Stein Robaire Helm. Over the past six months, while most rivals have been losing business, it has picked up five new clients and nearly doubled its annual billings to about $23 million.

While giant J. Walter Thompson reportedly laid off a dozen employees from its Los Angeles office last week, Stein Robaire Helm has actually hired seven new staffers since January--and it is looking for an eighth.

“Two weeks ago we turned down a $1-million account because we were too busy to give them the attention they needed,” said Greg Helm, president of the young agency, which recently won such familiar clients as Southern California Acura Dealers and the Century Plaza Hotel & Towers. “We’re finding there’s a lot of business out there. We don’t see it slowing down.”

Similarly, over the past six months, the tiny agency Larsen Colby Koralek has almost doubled its annual billings, with nearly $9 million in new business from five new clients--including the Riverside Press-Enterprise and UCLA Medical Center. The agency has hired four new employees too.

“When there are people who don’t have a lot of money to spend for advertising, they often look for more creative ways to spend it,” said Rick Colby, president of the agency. “That opens the door for smaller agencies.”

While business isn’t exactly booming at 3-year-old Vogel Communications Group, the agency has increased its billings over the past year. Last month, it won the $2.5-million Tahiti Tourist Board ad business from one of the major agencies in town.

“Our whole setup is for expansion and contraction,” said William C. Vogel, president of the agency that uses only free-lancers to create and place all of its ads. “For us, the bad times have been advantageous.”

Back in the early 1980s, the upstart agency Fotouhi Alonso Advertising almost went belly up when most of its high-tech clients jumped ship during bad times. That taught executives at the agency to grow more slowly, diversify and take on some consumer accounts.

Today, the small agency posts annual billings of about $19 million, including the business it recently won, Warner Brothers Domestic TV Syndication, which is syndicating “The Jesse Jackson Show” and “Trump Card,” the game show named after Donald Trump.

“The trick is to avoid getting so big that changing is like trying to turn a battleship,” said Farida Fotouhi, president of the agency. “For us, it’s like turning a scooter.”

Tobacco Tax to Fund Prenatal Care Program

Too often, low-income women who are pregnant seek prenatal care too late. So, with $3 million in funds from the California tobacco tax, the Department of Health Services has named the agency Evans/Los Angeles to help develop a campaign to encourage improved prenatal care.

“Our goal is simple,” said Kenneth W. Kizer, state health director. “We want healthier babies and we want a process that makes it as easy as possible for pregnant women to get the care they need.”

The ads, which will begin to appear in October, will be in English, Spanish and several Asian languages, said Jim Winters, chairman of Evans/Los Angeles. The ads will encourage pregnant women to avoid smoking and taking drugs. The ads will also point out that some low-income women are eligible for free prenatal care.

One employee at Evans has an especially keen interest in the campaign. Ronnie Greenfield, the account supervisor who will work closely with the Department of Health Services, recently gave birth to twins.

Saudi Airlines Kicks Ads Into High Gear

The crisis in the Middle East hasn’t stopped state-owned Saudi Arabian Airlines from pumping up its advertising.

“We had their ad manager in our office last week,” said William C. Vogel, whose agency, Vogel Communications Group, has handled the account for two years. The airline, which doesn’t fly into Los Angeles but has many flights to New York, actually plans to increase its ad spending over the next year. In recent weeks, its flights have been packed both in and out of Saudi Arabia with military as well as civilians.

“They want us to come to a meeting there in a few weeks,” Vogel said. “But I don’t even know if the State Department will let us go.” The airline’s slogan: “More Than Welcome.”

Dueling Vodkas Have Billboard Face-Off

While the vodka wars rage, commuters continue to suffer the visual consequences.

Stolichnaya Vodka has fired the latest salvo with its massive billboard on Santa Monica Boulevard that features a giant, 3-D bottle of Stolichnaya that appears to be sitting in an icy freezer. The unusual billboard was constructed from four tons of steel.

On the back side of the billboard? You guessed it--an ad for rival Absolut.

Clio Award-Winning Ads to Be Screened

Why would people pay money to see 2 1/2 hours of commercials?

Who knows? But $7 advance tickets are already on sale for the Oct. 11 Los Angeles screening of the 1990 Clio Awards at the Wilshire Ebell Theater. The Clio competition, regarded by some as the Oscars of advertising, was held in New York earlier this year.

The screening is open to the public, but don’t expect to just show up at the door and get a ticket. Last year, the show sold out in advance, and people were turned away.

‘Hip’ Dentist Seeks Clients With Ad

HMD, 46, seeks M/F, 18-78.

This may look like a classified ad, but it was actually the headline to a quarter-page advertisement that appeared in the September issue of Spy magazine. The ad continues, “Hip Manhattan Dentist (HMD) seeks Seriously Smiling Client for possible rendezvous.”

That dentist is Alan J. Goldstein, who calls himself a “personal trainer” for teeth.

Goldstein, who specializes in a special tooth-whitening process that costs about $1,000, said he has been extremely disappointed in the response to his ad. Only a few have phoned. Said Goldstein, “I’m still not clear if this is the way to bring clients into the office.”