Minneapolis ad agencies are regaining their strength

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.

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.

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.

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.

But advertising relationships are cyclical and Twin ­Cities ad agencies still have fans.

"Minneapolis continues to be a strong advertising market relative to its size," said Patrick Hunt, CEO of Hunt Adkins and a 29-year veteran of the ­Minneapolis advertising community.

Olson last year named ­outsider John Partilla as its CEO while Campbell Mithun lured Rob Buchner away from Fallon to lead that shop. ­Buchner's brother, Mike Buchner, has been CEO of ­Fallon for less than three years. Fischer became president of Carmichael Lynch in March. Meanwhile, former Olson CEO Kevin DiLorenzo last week took over as president of Barrie DeRozario DiLorenzo.

"That helps redefine the marketplace," Purdy said of the leadership changes.

Fallon's Buchner said his agency is only one new client away from needing to start hiring again.

Fallon's latest efforts include work for Tequila Herradura and Woodford Reserve bourbon under the Brown Forman umbrella and Loctite Adhesives, which includes the time-tested product Super Glue. Fallon also just commenced a campaign for its client of three years, H&R Block, tied to the upcoming income tax season.

Carmichael Lynch, which hired 53 employees last year, launched new advertising campaigns for Subaru last week featuring a family of golden labs called "The Barkleys" and a safety-themed ad entitled "They lived" featuring a family of crash survivors. Earlier this month, the agency added nutritional supplement giant GNC as a client along with its $33 million to $41 million media budget. The ­agency's most visible clients also include Jack Link's Beef Jerky and Tempur-Pedic mattresses.

"We want to make this a fun place to be," said agency president Fischer.

"We've got a unique blend of confidence and humility," said Fischer. "Gone are the days when being boisterous wins you business. The new world of marketing is to have that [deep] level of relationship and trust in a creative vision that furthers business.

"It's a hard thing to capture, and just as hard to keep."

David Phelps • 612-673-7269