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Wednesday, Feb 28, 2024

Market Column


Four years ago, Bruce Miller walked away from Foote, Cone & Belding to start up a quirky little ad agency in Santa Monica.

Four months ago, that little shop doubled in size to become one of the biggest advertising agencies in Los Angeles County.

And Miller now sits in the office that once belonged to his former boss.

Who says you can’t go home again? Certainly not Miller, who as president of the hot shop Suissa Miller Advertising Inc. had the rare pleasure in December of relocating his new company into the exact same offices on Wilshire Boulevard once occupied by his old employer, FCB.

“I walked into the men’s room on our first day here and said, ‘Yep, this is exactly the way I remember it four years ago,’ ” Miller said.

Such is the ebb and flow of the advertising business, in which small shops can become giants at the stroke of a pen and once vital players can become all but obsolete seemingly overnight.

It’s been particularly wild surfing in Los Angeles in recent months, especially as a result of the stunning decision last October by American Honda Motor Co. to shift the $120 million ad account for its Acura division to Suissa Miller from incumbent agency Fathom.

In the time since then, Suissa Miller (along with most other sizeable ad agencies in L.A. County) has been flooded with job applications from Fathom employees. Suissa Miller has cherry-picked about 15 of them, according to Miller.

As for Fathom, it is now the subject of continual rumor. Ad industry trade magazines have reported that the agency’s owner, New York-based Omnicom Group Inc., will fold up the shop by the end of 1997 and transfer its single account Redwood City-based Oracle Corp. to DDB Needham Worldwide.

Fathom’s creative director Larry Kopald says the agency still has nearly 100 employees and there have been no layoffs, but observers say the Oracle account simply isn’t big enough to support that level of staffing.

“At this point, there’s really nothing to say. We go on, and it’s that simple,” Kopald said.

Among the high-level defections at Fathom is former managing partner Tim Hart, now president and CEO of Bates USA West in Irvine.

Hart, who declined to say much about his old agency, said Bates is now concentrating on growing its Los Angeles office. If the agency should emerge victorious in the current Bank of America account review, a large portion of that business valued at about $50 million in annual billings would be handled in L.A., Hart said.

In other words, more flow, less ebb.

But also on the ebb side is FCB, whose Los Angeles office suffered a series of devastating blows last year.

From a reported $86 million in billings in 1995, FCB’s L.A. division is now believed to be running in the range of $25 million to $50 million. Farmer’s Insurance Group and Metro-Goldwyn-Mayer Inc. both took their ad business elsewhere last year.

Real estate and advertising sources say FCB will soon shutter its L.A. office completely. Suissa Miller is subleasing two floors, or about 45,000 square feet of space, that FCB used to occupy at 11601 Wilshire Blvd.

And while FCB retains a presence in one floor of the building, real estate sources say Suissa Miller has the option to take over the rest of FCB’s space if it moves out.

FCB General Manager Joel Hochberg said there are no plans to move in the immediate future at least not for the agency. Hochberg himself confessed that he has received a job offer from another L.A. shop, but said he couldn’t reveal which one until next week.

Meanwhile, at Suissa Miller, the agency recently bought 300 pieces of remnant carpeting to create a bizarre patchwork floor for its new space and we’re not talking tasteful remnants, either. Leopard spots clash head-on with pineapple prints in a brain-bending interior design that could as well have been created by the people at Excedrin.

“When somebody spills coffee on it, nobody can tell the difference,” said Miller. “We’ve gone from quirky Santa Monica to quirky highrise.”

By the time it finishes adding people to staff up the Acura account, Suissa Miller will have 160 employees, double its size before the win. None of the creative work on Acura has broken yet, but Miller says the preliminary stuff got a good reception from Acura dealers at a recent meeting of auto sellers in Atlanta.

The agency has stopped looking for or accepting new business, a typical move after a shop absorbs an account the size of Acura.

“We’re in a digesting mode right now, just trying to do right by Acura and do right by the accounts that led us to do the kind of work that attracted Acura,” Miller said.

Suissa Miller is riding high right now, but advertising veterans warn that the days of explosive growth for the agency are probably over. After all, the shops now moving out of L.A. or downsizing were once the hot new kids on the block, too, until they grew and got acquired by a holding company and eventually lost the confidence of too many of their clients.

The problem, says Select Resources International President and consultant Michael Agate, is that once a small shop absorbs a giant account, it’s no longer considered a responsive, fast-moving agency.

“It sometimes gets tougher to persuade the small or medium-sized client that they’re important after taking on a huge account,” Agate said. “If an ageny doesn’t keep up, or create a streamlined working model that can work as fast or flexibly as the small independents, it’s vulnerable.”

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