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Ad Agencies Build Virtual Teams to Boost Production Capabilities

Madison Avenue veteran ad man Rob Weinberg, self-proclaimed “chief imagineer” of his MarketBuilding Team, enjoys a 30-foot commute from his bedroom to his office in Rancho Bernardo.

“I used to own a New York City ad agency in the ’80s at Gramercy Park,” he recalled. “I had 22 people reporting to me.”

His hefty roster of heavy hitters included such clients as Pfizer Inc. and Chemical Bank, and he “did the whole rat race thing. You know what they say , ‘The rats are winning,’ ” said Weinberg.

These days, he presides over his “virtual corporation” with wife and production manager, Randy Rose.

“I am a copy writer and strategist and account manager,” said Weinberg, who is usually seen sporting a Panama hat. “She is designer, editor and production person. We meet in the middle and have regular meetings.”

They also tap into a “crack” team of illustrators, writers, production and printing people, among others, to serve their clients, many of them from the real estate industry.

“That’s the key to making a virtual agency work well,” he observed. “You have to have the right people. I have two fat Rolodexes next to my computer. I network constantly.”

With his involvement in the Rotary Club, the San Diego North Chamber of Commerce, public speaking, a regular marketing column called “Ask Mr. Marketing,” and a couple of marketing books out, Weinberg is “all over the place.”

He prides himself on being able to marshal his freelance troops at a moment’s notice.

“You have to be able to actually deliver the product or service,” said Weinberg. “We have people in Montreal, New York, Florida, Atlanta and Houston, but the bulk is here.”

As for media, he said that, “We do high-tech, low-tech and no-tech. You have to have a very broad-based knowledge.”

Weinberg defines “no-tech” as networking.

“Word of mouth is the best marketing there is,” he said.

How’s business going?

It’s only June, but, said Weinberg, “We have already met the revenues we had last year.”


Virtual Trend

The technology revolution, along with shifting market conditions, all converged in the last decade to spur a trend toward the virtual ad agency , a small full-time staff, tapping into a pool of independent contractors, from art directors to copywriters to public relations executives.

Consider the case of Sheila Fox. After almost two decades with conventional ad agencies, including almost a dozen years as a president of Chapman Warwick Advertising & Public Relations in San Diego, she decided that it was time for a change.

“I took six months off, and thought about what I had learned,” said Fox. “To re-create another agency would be counterproductive.”

Rather than go the conventional agency route, where she would have to make her team “all things to all people,” Fox decided to create virtual teams for her clients.

“I have my resources, but I’m paying no overhead,” she said. “I can charge reasonable amounts for what I do, and I don’t have to pass on overhead costs. Everyone I work with is entrepreneurial as well, and very motivated. And, it’s allowed me to grow personally.”

Fox’s 9-year-old business, Fox Marketing Network, is so virtual that it has no Web site.

“I have been so blessed to have referral business that I never put up a Web site,” said Fox. “A week before I finish a project, the phone is ringing. I haven’t had to market myself.”

Like Weinberg, Fox is a big believer in the power of networking, having served as Western regional chair for the American Advertising Federation, where she made scores of industry contacts. Fox also kept up with industry changes, attending national conferences where “everyone was talking about how hard it was for agencies to adapt to all the changes going on.”

It was a particular challenge for the smaller agencies, faced with a growing demand by clients for a variety of specialists, but lacking the budget to keep that many on staff, she said.

“Add to that the tech boom and how fast things were changing,” she observed.

Her virtual agency has been working out well, said Fox.

“I am doing work that I love, working with people who are responsive and professional, and I am learning all the time, and this makes it a pleasure and a joy to do what I do,” she said.

If there is a downside, it’s the cost of health benefits.

“This is expensive,” Fox conceded. “My premium went up 35 percent this year. It’s a trade-off for getting other benefits.”


Rising Demands

Competition has had a lot to do with the changing agency structure, said Andreas Roell, chief executive officer and president of Geary Interactive, a San Diego-based online marketing agency.

In times past, agencies had long-term contracts and retainers with their clients, said Roell, while now, business is run more on a project-by-project basis.

“How do you justify the costs you have as an agency now?” he asked. “Agencies have to look deeper inside themselves, and reorganize their structures.”

This means being able to tap into a pool of resources that include freelancers, temp agencies and partnerships with those with special talents, he said.

The challenge?

“There is a big discussion in our industry,” said Roell, who also serves as president of the San Diego Ad Club. “Is longer-term thinking being jeopardized? If you hire a freelancer, how much do they know about the client? Total involvement in the brand has become much more limited than it has been in the past.”

Another big issue, he said, is that interactive space is becoming more fragmented.

“It’s so broad, we can’t have a payroll for all of the needs,” said Roell. “It is the nature of the Internet. There are so many different pieces of technology floating around, so much innovation.”

Consequently, he added, “The face of the agency has changed. It is the hub of knowledge and ideas, but the execution is more done at multiple places. This drives the virtual agency, and it has become so much more of an efficient way to communicate.”

Clients also expect less face time, said Roell.

“We have clients on the East Coast, and for us to be in their face would take too much time away from doing our jobs,” he said. “This has become a less in-person approach, and more focused on getting the job done. I think it’s a sign of the times. Consumers have changed. It is our job to respond to it.”

Agencies have struggled for long periods of time changing the way they operate, said Roell.

“The ones that don’t adjust themselves, it will hurt,” he said. “For those who progress, it will be the same or better than it was before. The key is being able to service the client properly.”


Boutique Boom

Greg Starmack, president of The Starmack Group, a La Mesa boutique marketing and communications agency, worked for big agencies for almost two decades.

“The traditional agency business I came from was very departmentalized, and they kept themselves apart,” he said. “You had your own department and that’s what you worked in.”

With the dot-com crash several years ago, agencies were “forced to re-analyze how trends are set, how industries like dot-coms can explode for a small amount of time,” said Starmack. “When the industry went away, it caused a huge dent with the ad agency business, and forced them out on the street. With that, a lot of creative ad people went off on their own, and started freelancing and found opportunities to do a lot of different work in a different atmosphere.”

This new business model has advantages, said Starmack.

“Clients are demanding more and more time with their marketing partners,” he said. “With smaller agencies, we have people who can wear different hats, and can slide into situations easier than they did 10 years ago. Small agencies become more flexible, and they turn work around quicker.”


Virtual Evolution

Starmack, who now has a staff of eight, began as a virtual agency, brainstorming with freelancers that included Michael Duffy, creative director currently on staff.

As a freelancer, “I had to do everything , billing, being account executive and art director,” said Duffy.

He also found himself isolated.

“I would go out and go to dinner with friends and talk and talk and talk,” he recalled. “I’d talk to my dog, and the retired neighbors across the street. I missed the camaraderie.”

Kathleen Cunningham, president of Advanced Marketing Strategies in San Diego, considers the virtual agency a “viable business model.”

“But will it replace the bigger agency?” she asked. “I don’t think so. I think that there is a lot to be said for having everything done in one shop. We consider ourselves a business consultant. For the clients we have, if they went to a virtual agency, they would be getting piecemeal advertising.”

Her company employs 23 full-time staffers, and has offices in Los Angeles, Dallas, Houston and Phoenix.

Cunningham also believes that larger agencies can be just as nimble as the virtual or boutique businesses.

“We all have the same technology,” she said. “This allows our business to become ultra-responsive, and allows us to turn things around quickly.”

As for pricing, Cunningham added, “You get what you pay for.”

Beth Callender, principal of Greenhaus, a San Diego-based advertising and marketing agency, figures that her business places among the top five locally these days. But, she agrees that there aren’t many mega-agencies around anymore.

“When I first started in the business in the early ’80s, every agency had fast-food, car dealership, real estate and bank clients,” she recalled, noting many of them had headquarters here.

“In the ’90s, we lost a lot of corporate headquarters and there were mergers and acquisitions,” said Callender. “Where marketing used to exist locally, a lot of it was folded into agencies at the national level. Everything was fragmented, changed and streamlined.

“In the late ’80s and early ’90s, there was the advent of media-buying services,” said Callender. They were operating nationally, she said, and “getting the best rates. Things that used to be the exclusive job of agencies have been divvied up among different firms.”

Then came the online boom.

“It’s a completely different world,” she said.

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