The lessons of the shakeup at Mithun ad agency

It's been two months since the signs came down at the Mithun advertising agency, the first of the Twin Cities institutional ad names to fade into ­history as the once illustrious firm was consolidated by its parent company.

While the slick downtown office and most of the staff still remain, the firm, now dubbed McCann Minneapolis, is a different beast complete with a new identity and executive board.

The makeover of the firm that most knew as Campbell Mithun (its name was shortened a couple of years ago) is the outcome of a fast-moving industry where even the biggest names always need to be on their toes.

"I think you have to be quick on your feet, always be anticipating the next thing," said Dave Peterson, creative director and founder of Minneapolis agency Peterson Milla Hooks. "It makes it exciting, but it's also challenging. I don't think Campbell Mithun was ever built for that kind of market."

Many of the largest ad agencies in town are also part of global corporate companies but have been able to maintain their autonomy. Earlier this month, for example, top-ranked Olson was consolidated by ICF International but the marketing firm will largely keep its composition and independence, its president has said.

One large change in the overall ad market has been the globalization of companies, which has meant the globalization of agencies. Agencies have had to become part of bigger organizations — or expanding themselves by opening offices in other locations.

Mithun also faced another reality of today's advertising marketplace: Long-term relationships with clients are becoming less common. Companies routinely put their advertising up for review, normally coinciding with a change in ownership or in the chief marketing officer who may want to take the company in a new direction.

"[Mithun] brought a ton of resources to this town, whether that was talent and attracting people here or all the sort of adjacent services," said Mark Bubula, co-founder and president at marketing consulting company Friends & Neighbors, who started at Mithun as an account executive before working for years at Olson and then starting his own firm.

Mithun became part of the Interpublic Group holding company 20 years ago and began operating soon after as an independently branded North American unit within McCann Worldgroup.

In late January, McCann declared it was consolidating its Twin Cities offices, including Mithun, in an effort to "leverage McCann's resources by connecting the Minneapolis operation more closely to McCann." Along with a reduction in staff, the change also resulted in the exits of Mithun CEO Rob Buchner and Chief Creative Officer David Carter.

McCann Minneapolis declined to comment for this story outside of its company statement.

Industry insiders say Mithun's shortfalls were its inability to change with the times during an age when digital has become more of a focus and failure to attract new accounts needed to offset lost clients.

Mithun was not alone in its struggles. Several more established firms, some of which are under the umbrella of holding companies, "have had a really tough time in the last 10 years" adapting to the changing market and scaling to clients' needs, said Steve Wallace, president of the Advertising Federation of Minnesota.

"I would say this marketplace has changed a lot in the past 20 years," Wallace said. "Whereas you had the Mithuns and the Fallons and the Martin Williams, which were all 200 to 1,000 people, you have now a lot of people who worked at those companies who have formed their own boutique shops."

Bubula, whose company consists of about 10 full-time people not including the freelancers his firm often uses, said that while there will always be a need for larger agencies, there seems to be "a lot of energy in this marketplace around smaller shops."

"I think that agencies have to embrace change. Change is happening all the time," Bubula said. "They have to be flexible and nimble in that regard. They have to be more and more a flatter organization where there aren't so many layers that cause inefficiency and slowness and drive up overhead."

Not all of the larger firms have faltered. Mike Lescarbeau, chief executive of Carmichael Lynch, said the more resources a firm has, the easier it is for them to invest in new ideas.

Carmichael Lynch, which was acquired by the Interpublic Group in 1998, has a roster of clients that includes Subaru, U.S. Bank, and American Standard.

Lescarbeau said he attributes a lot of Carmichael Lynch's growth in the last few years to the firm being "more flexible" and expanding its capabilities. Carmichael Lynch has had two consecutive years of 10 percent growth year-over-year. In the last six months, the company's head count has increased 8.5 percent.

Steven Wehrenberg, an advertising professor at the University of Minnesota and former Campbell Mithun CEO, said that while the transition of Mithun was a loss, other agencies can learn from what happened. "The ones that are able to succeed the most are the ones that are able to adapt," he said.

Nicole Norfleet • 612-673-4495