Minneapolis ad agencies are regaining their strength

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: January 21, 2014 - 11:21 AM

The glitter is back.

The Minneapolis advertising scene is showing signs of strength after several years when flat was considered up on financial spreadsheets.

Revenue at Periscope rose 15 percent in 2013. At Carmichael Lynch, income from new and existing clients jumped 11 percent. Organic growth at Campbell ­Mithun was up 8 percent.

Fallon, which lost its high-­profile Cadillac account earlier in 2013, is on the rebound with several new client wins while Colle+McVoy experienced its eighth straight year of revenue growth in 2013.

“Hopefully we are on the verge of getting great new work and great new clients,” said John Purdy, a former Twin Cities advertising executive who now teaches courses on his profession at the University of St. Thomas. “That gives Minneapolis prestige that may have been lost from the golden days of advertising in the ’90s. Minneapolis can get its mojo back.”

When it comes to creative agencies, Minneapolis ranks behind New York, Los Angeles, Chicago, San Francisco and Washington in terms of size. Minneapolis and the state owe their advertising muscle to the proximity of timber and grain mills in the late 19th century that led to a flourishing printing industry and agribusiness giants like Pillsbury, General Mills and Hormel that looked locally for help in marketing their goods. The result has been a handful of larger agencies and dozens of smaller ones.

Nearly all agencies suffered during the Great Recession as clients closed their checkbooks and cut back on marketing and advertising. The Minnesota advertising and public relations community currently employs about 5,500 people. When support services such as printing, animation and design are included, the industry employs about 44,000 and accounts for $17 billion in revenue a year.

Martin Williams is off to a strong start in 2014 with its latest national TV campaign for financial adviser Raymond James, a client since 2009. And that’s on top of work for new clients including the restaurant chains P.F. Chang’s and Pei Wei as well as Kubota Corp., the Japanese construction equipment manufacturer.

Small shops are prospering as well. The 22-person agency Solve experienced a nearly 70 percent revenue increase last year from $2.4 million to $4 million with clients ranging from Abu Dhabi Commercial Bank to True Value Hardware and Bentley Motors.

‘I like what’s going on here’

After a first-half struggle in 2013 that included two rounds of layoffs, Space150 came back strongly and had a record first fiscal quarter in 2014. Hunt Adkins, with a staff of 40, saw revenue climb 15 percent last year and recently added Hayward Industries, a leader in the swimming pool market, to its client roster.

“I like what’s going on here,” said Solve CEO John Colasanti. “It’s great if others are making some strides because it’s good for us all.”

Marcus Fischer, president of Carmichael Lynch and an 18-year veteran of the advertising industry, admits: “In any recession, advertising is the first to go and the last to come back.”

But, as the economy improved and social media added a new component to advertising needs, businesses started to spend again.

“We didn’t lose any clients last year and that’s a big deal,” said Periscope CEO Greg Kurowski, whose agency added TCF Bank, a portion of Great Clips and the Sportsman’s Guide to its client roster in 2013. “But there are still challenges and we have to bring our ‘A’ game every day.”

Fallon’s Mike Buchner said he is “guardingly optimistic” about the coming year. “I think the back half of this decade is going to be better than the first half.”

But where there are client wins there are also client losses in the fickle advertising ring. Changes in creative direction, leadership and in the marketplace can bring changes in relationships between clients and agencies.

In 2010, Carmichael Lynch split from Harley-Davidson, a partner for 31 years. Periscope parted ways with the Red Robin restaurant chain two years ago after that operation changed CEOs. Last year the mattress company Simmons and Martin Williams split and Fallon lost the Cadillac account and upward of 50 employees who were working on it.

  • related content

  • President Marcus Fischer of Carmichael Lynch says he strives to make the Minneapolis agency “a fun place to be” as the advertising business picks up.

  • Periscope employees worked in their former photo studio in December 2011 while renovations to the building on Washington Avenue S. were completed. The Minneapolis ad agency reworked its space and added 18,000 square feet to handle workforce growth.

  • In December, Olson CEO John Partilla pushed the ad agency’s annual revenue to over $100 million with the acquisition of PulsePoint Group, a management and digital consulting firm based in Austin, Texas.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

Advertisement
Golden Gavel by Star Tribune

Countdown to great deals

Bid Sept. 21-29

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close