AM Advertising
Executives:
Jim Tindaro, president; Kathy Cunningham, executive vice president
Gross Income, 2000:
$7.1 million
Location:
San Diego
Employees:
25
Business:
Advertising, media buying
Its use of interviews, customer questionnaires and telephone queries is how local marketing agency AM Advertising has made a name for itself.
Now, the research itself might propel AM to change that name.
Over the last month or so, the company has begun investigations for its newest brand profile project: itself.
It even assigned the project to a staff member and will outsource some of the survey work to a market research firm.
“We’re trying to practice what we preach,” said Kathy Cunningham, the agency’s executive vice president. “We want to ask the people who work here what they think the agency stands for we want to find out what our clients think we stand for, or what differentiates us, why they continue to keep us on board.”
In the local market, which is suffering the effects of a sluggish economy, AM seems to be doing the impossible. It has remained increasingly profitable.
In 2000, the company’s gross income was $7.1 million, up from $4.6 million the year before and $3.5 million in 1998.
This year, the company is on track to beat last year’s income by close to 15 percent, said Jim Tindaro, AM’s president.
Long-Term Relationships
AM has had several long-term clients. It has worked with Henry’s Marketplace since 1990 and Mossy Automotive Group since 1988.
Peter Mossy, president of the car dealerships, said despite being approached by other advertising firms, he’s stayed with AM because of its accountability and the way it has kept his company’s brand development on track.
At each sale the dealerships make, the buyer fills out a survey designed by AM that explains why the person was motivated to come to the dealership and his or her general media habits, such as what radio, TV or newspapers they use, when they use it and what they read.
Now, with surveys dating back more than a decade, the dealership has a bank of knowledge as to how its customer base is evolving, Mossy said.
“From that, we’ve seen how our clients change; we’ve been able to adapt, and they’ve been very good at moving us in the direction of where our customers are going, as far as our marketing goes,” he said.
Before AM, Mossy found other agencies would create a campaign and buy the time, but results would be less clear.
“It all seemed to be doing very many different functions to get the same outcome, and then you never were really sure if it was effective or not effective,” he said.
Although it may seem like “grunt work,” the post-buy and media research that AM regularly analyzes is important, Mossy said.
“One of the things about advertising is that not everything is effective, and being able to measure means that you can control it and hopefully spend our advertising dollars more wisely, putting them where they can have the maximum impact,” he said.
Success Measured By Longevity
According to Bob Gavin, partner at Gavin & Gavin Advertising, Inc., another local agency, lengthy client relationships are a strong indication of AM’s abilities.
“It says that they obviously understand the pulse of the retail marketplace to have clients with that stature for that long,” Gavin said. “The average agency relationship lasts about two years, so to have a client for five years or more is a tremendous pat on the back.”
Henry’s and the Mossy dealerships are coveted clients, he noted.
“To have an account of $3 million in the San Diego market is a big plum, and I think that these guys have several of them like that,” he said of AM.
Having longtime clients says that AM is succeeding on several levels, including management, creative, promotional style, and its understanding and strategic approach to each business, Gavin said.
It also speaks to the agency’s ability to mesh with different types of clients with various strengths and businesses.
“It’s not easy to be all things to all people, but they seem to have done a real good job with that,” Gavin said.
Every client is different, both in the customers they seek and the way they want to deal with their marketing work, Tindaro said.
Understanding The Client
Each company tends to have a way they like to be approached, said Cunningham, who oversees client service.
She has several categories for identifying a client’s communication needs and style.
Some clients wants to know every detail involved in the campaign and its execution. Some want the bottom line, and others want a consensus in which several people at his or her company should be involved.
There’s also a fourth type of client who wants more of a show, an approach focused on the perspective of what an audience consumer might see.
At Henry’s, which is owned by Boulder, Colo.-based Wild Oats, marketing coordinator Kelly Martin said she appreciates AM’s responsiveness.
AM handles radio and television ads for the company and the print work is done in-house, Martin said. The relationship is renewed monthly, she said.
A recent project for Henry’s involved AM analyzing surveys of 15,000 customers, using it for media buys.
More than anything, the agency manages to give Henry’s a feeling of security about its marketing plans, Martin said.
“They really care about us,” she said.
When Chuck White began overseeing marketing for Sycuan Casino, he quickly realized the Oregon-based agency doing the casino’s radio and TV didn’t understand the San Diego market to his satisfaction.
He had met Tindaro and Cunningham at various events, and asked them to oversee Sycuan’s market research.
After six months, he gave them the casino’s television and radio accounts.
Hands-On Management
White, who has since left Sycuan and now works as president and CEO of locally based PSA Management Co., which oversees restaurant Pea Soup Andersen’s, said he found AM different from other advertising firms he had worked with in San Diego.
It’s well staffed without a lot of freelancers and the principals are hands on, White said.
“Kathy and Jim are actively involved in every account,” he said.
Originally, the company’s reputation for research attracted White to AM. “They have a reputation as being probably the best research agency in town, and I found that to be the case.”
AM never handled Sycuan’s media buying, but consulted on its marketing plans, he said.
“They pointed out how we could redirect money and get a lot more bang for it,” he said.
The local Ikea store in Mission Valley, an AM client since November, has also benefited from AM’s approach to customer research, said marketing manager Linda Persson.
According to Persson, AM’s focus on research was clear during the account review, which involved at least three agencies.
“We picked AM Advertising because they seemed to be very prepared and they knew about Ikea,” she said. “One of the top things that we really liked about them was they were very into research, looking at the customers and the environment.”
This wasn’t true with the other agencies she talked to, Persson said. “They didn’t really refer to research that much at all.”
She also is pleased with the way AM’s handled media buys.
“The efficiencies of our buys are very, very good,” Persson said. “It’s not very traditional we’ve gone back and forth on that several times, but I’ve had other people looking at our media buys, and (AM’s) done a marvelous job for what costs we’ve had.”
Automotive Experience
Tindaro and Cunningham bought the agency in 1990. At the time, it was an office of Los Angeles-based U.S. Promotions and they had both been working there. Tindaro had come to San Diego from L.A. to open the office three years before.
Although the company had been profitable in its previous incarnation, the owner decided to become an independent consultant in the car industry.
At first, Tindaro and Cunningham christened the agency AutoMotive Advertising and focused on the car sales industry. It’s still the company’s legal name.
About 10 years ago, when the agency started to work with other types of businesses, it began doing business as AM.
The name change could be part of the company’s study of its own brand, Tindaro said.
As for other changes, there could be some new clients in store. Earlier this month, Tindaro was in Las Vegas and San Bernardino for meetings with prospective clients.
Starting out in the automotive business served AM well, said Bob Gavin.
What an agency learns in the car business is applicable to all retail business, and cars are the hardest of the retail industry, he said.
“Once you’ve cut your teeth in the automotive business, other high-revenue and low- profit margin businesses with heavy reliance upon real estate and people become second nature,” Gavin said. “They’ve bridged that gap well.”
