Campbell & Wagman, the Los Angeles agency that persuaded client First Interstate Bank to "go the extra mile" in its advertising--but which recently lost the $25-million account--is closing its doors.
The agency's remaining staff of 19 people--down from a peak of 55 employees three years ago--will be let go in December, when the company is to close shop, said Craig Campbell, co-founder of the 7-year-old agency.
Although the economic downturn has forced several Southern California ad agencies to pull up stakes over the last few years, it was not just the sour economy that led to this closure, Campbell said. Rather, the agency pressed its luck by depending on a single client--First Interstate--for about 80% of its business, he said. The company's annual billings are $34 million, down from $50 million three years ago.
"In Southern California, many agencies are dominated by a single client--and that can be very dangerous," said Campbell, who has worked in the ad business for 29 years.
First Interstate, whose ad slogan has been "Go the extra mile," put its ad account into review two months ago. Executives say they don't expect to name a new agency until February.
Industry executives say Campbell & Wagman found itself swimming upstream by trying to survive as a mid-size agency in a business climate that could not support it. "Small, niche ad agencies will grow in the '90s, as will multi-international agencies," said Rich Edler, executive vice president of Foote, Cone & Belding/Los Angeles. "But it is very, very difficult to be in between."
Campbell, 52, former general manager at Foote, Cone's Los Angeles office, said both he and agency co-founder Michael Wagman, 52, hope to remain in the ad business in Los Angeles.