High-Tech at Low Ebb for Pair of Ad Agencies : Shakeout: One firm is closing, another cutting back drastically after industry’s troubles rub off.
Two Orange County advertising agencies that specialize in high-technology clients have fallen on hard times.
One, Irvine-based R.L. Couch & Co., is going out of business. And 21-year-old Galusha & Associates in Newport Beach is drastically cutting staff and changing its focus.
The principals say the high-tech industry--including manufacturers and vendors of electronic equipment, computers and medical devices--is hurting, and so they are too.
The news comes during an industry shakeout that has seen the demise of nearly half of the 420 agencies that were doing business in Orange County in 1990.
“It’s traumatic,” said Frank Galusha, 59, who laid off most of his 15-member staff July 17 and has kept a handful of people to close out some remaining accounts. His agency has handled advertising for Fujitsu and State of the Art. The company billed $12 million in 1991.
Galusha said he plans to rent smaller offices, keep four employees and turn his attention to direct marketing and sales promotion. At its height in 1987, Galusha employed 30 people.
The smaller agency will farm out ad placement, brochures and publicity campaigns to other agencies or contractors. “Basically, we’ll be doing the same thing we’ve always done without the organization under our own wing,” Galusha said.
At its founding in 1971, the company was one of the few specializing in helping high-technology companies advertise to others within their industry. Galusha said about 300 other agencies nationwide soon targeted that specialty, but that number has dipped to about 100.
A fellow specialist, R.L. Couch, will close its doors Friday. The 12-member staff, about half the size it was last year, has been writing resumes and interviewing for the past few weeks, said Rex Couch, president of the 15-year-old agency, which billed $13 million last year.
Couch said the slump in the high-tech industry has hurt him in general, but the loss of his biggest account earlier this year, Ohio-based Tecmar, was the most difficult blow. Tecmar, which makes data storage backup products, took its business to Irvine-based dGWB.
Several of Couch’s remaining accounts, and four staff members, will join Newport Beach-based Lenac, Warford, Stone Inc. Couch said he plans to take some time off.
Although Couch declined to identify the clients, he has worked with McDonnell Douglas Field Service Co., American Assn. of Critical-Care Nurses and Infonet.
Competitors of the ailing companies say business is not bad for everyone.
Chuck Roberts, president of Roberts, Mealer & Co. in Santa Ana, which billed about $4.5 million last year, said his company is diversified enough so that segments of high-tech that are doing well--biomedical and disk-drive makers--are part of the mix. He said he has just had his best month in two years.
And J2 Marketing Services in Brea has just hired two people, bringing its staff to 21, said Terri DiMarco, an account supervisor and a recent past president of the Business and Professional Advertising Assn.
“It’s not true” that everyone is hurting, DiMarco said. “We’re busy.”
Chip Shafer, president of Shafer & Shafer in Irvine, said he billed about $16 million last year to clients such as Toshiba, Quantum and Beckman Instruments. He predicted that Galusha and Couch will be among the last of Orange County’s agencies to announce drastic cutbacks.
“This shakeout has been a good one,” he said. “If you look at the list of agencies left, who’s left to fail?”
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