ARCHIVED  December 1, 1997

Industry maintains its stability

A flourishing economy tends to carry over to the advertising and marketing agencies that sprout up to serve it.In Northern Colorado, however, the advertising and marketing industry appears to be characterized not by sprouting but by equilibrium. The regional picture has remained stable and balanced for the past 10 years, with small agencies coming and going over that time.
Meanwhile, bigger players have moved outward, developing their presence in the national and world markets.
Some clear evidence of the advertising equilibrium may be found in the Yellow Pages of the 1987 phone book. In 1987, there were five listings for "Marketing Research and Analysis"; in 1997, there are also five. In 1987, there were 12 marketing consultants listed; now there are 11. Only under "Advertising Agencies" is there a perceptible change: from 20 listings in 1987 to 33 today.
However, even though the numbers have remained fairly even, the players have changed. Two-thirds of the 1987 ad and marketing consultants are gone, while four-fifths, or 80 percent, of the marketing research firms no longer exist. It appears, then, that for the last decade in Larimer County, there has been very little growth in the industry, just some shifting around.Equilibrium in a time of growth?
There are reasons for the anomaly of equilibrium in advertising. One of them is that the entrepreneurial activity that has found a good home in Northern Colorado does not necessarily create an ideal environment for advertising and marketing growth.
Karen Hanson, founder and president of Fort Collins-based Invision Marketing Co., in business since 1986, explains the difficulty of working with smaller companies: "The smaller the company, the more service it requires. Why? A small company with a small budget needs to get a big return on its investment. It needs results."
JoEllen Harris, half of the relatively new firm (1991) of Bob Harris & Co. in Greeley, agrees.
"Our original dream was to give small businesses access to really good talent. What we learned was that a business has to grow to a certain point before it is in a position to use the help well."
As a result of that lesson, the Harrises reappraised their mission and now focus on a select group of clients in Northern Colorado representing the cattle, automotive, and financial industries: cows, cars and banks.Positioning is everything
The fact that local demand for advertising and marketing expertise seems to be stuck in a mode where forward and reverse reactions occur at equal rates does not seem to have dampened the ambitions of those in the industry.
The local situation has made them creative; positioning has become the engine for profitability. Some agencies position themselves as full-service, others as specialists in public relations or business-to-business marketers. Some position themselves out of the region.
Melissa Katsimpalis and Laura Sandell are two of the newest players in the game and made a conscious decision to list "public relations" as their first ingredient. They formed isis Public Relations & Marketing in Fort Collins in 1997 because they felt the time was ripe to move their PR expertise from CSU into the public sector.
"We saw a growing outsourcing trend with companies," Sandell said. "Companies stay lean by not keeping an in-house marketing department. We felt that there was a place for us to step in and help with strategic counseling around communications."
Although Katsimpalis and Sandell˜s company is new, their familiarity with the market is not. Both were tested in the crucible of university public relations, where an ability to promote an image and quell controversy is a high art. Because of university connections, with the media in particular, ISIS has an advantage over other startup agencies and may beat the odds explained by Laurie Steele, head of account services at Fort Collins-based Burns Marketing Communications, ranked first in total billings in 1996.
"This region is saturated with talent," Steele said, "and so it is difficult to compete on a small level."
"Plus," said Jeff Williams, media director for Burns, "it takes such a long time to educate a small to medium business about the value of advertising. We work from referrals, and so when new clients come to us, they know what to expect."
At the opposite end of the advertising/marketing/communications continuum from the newer, smaller, specialty agencies, the older, larger, full-service agencies take up their position. Instead of representing the norm, as it might in a large and growing market, the full-service agency with several employees fills a niche.
"We like to manage the whole project because that is more efficient," said Keri Rizley of Kelly Rizley Advertising, founded in 1982. "We look like a small agency, but we have long-term relationships with artists and writers who we know can keep their focus on the project. Experience is essential."
Invision˜s Hanson agrees with the full-service concept.
"If I were starting over, I would start with a talented staff from the very beginning," she said. "I originally worked alone. That lasted for six months, and then I understood that smaller companies would always be fighting for the same market share."
Being a full-service agency with a staff of 23, Hanson must look outside of Northern Colorado for clients.
"I could not survive doing only local work," she said. "But you can go anywhere if you are talented. Our office is in Fort Collins, but we compete in Australia, U.K., Japan and Europe."
In part, Hanson has taken her lead and some of her international projects from Hewlett-Packard Co., "a savvy company to work with."
She explains that HP follows the 80/20 rule and focuses on accounts — business to business — that will bring them the greatest profit.
Business to business is yet another piece of positioning used by Front Range agencies. Scott Evans, of Up2Right Industrial Marketing Research and Strategy in Loveland, discovered early on that there was not enough high-end local work to foster an entire industry. So he focuses on strategic consulting and goes outside of the region for business, using the same marketing strategies for himself, including direct mail, that he recommends to his clients.
"I do no ad development and no material development," he explains, "and I deal exclusively with high-tech and industrial clients."
Also working out of Loveland, James R. Williams of Stage 7 (a dba for Integrated Marketing Systems Corp.), uses telemarketing and direct mail to put his clients in front of highly qualified, highly interested clients. Williams has found that large corporations will go to outside contractors when it comes time to test the waters for a new product.
"If the product misses the target, it˜s no big deal," Williams said. "The company has not invested in its own marketing team and so has no layoffs to deal with. This kind of outsourcing is very cost-effective for them."
While all of these varieties of positions in the market may be seen as stops along a continuum, in effect they become niches because the only head-to-head competition seems to be among the smaller companies who still compete for the banks and retail establishments. What the future holds
Marketing and advertising trades in hope, and so, despite the difficulties in finding a place in the market to be creative and to prosper, the practitioners of this trade are on balance an optimistic lot.
In response to a saturated market, they have specialized and may eventually be able to capture some of the branch business from corporations that have tended to plan marketing strategies from distant headquarters.
Many feel that the very nature of this region makes it not only a good place to live, but also a positive place to do business. Burns˜ Steele points out that along the Front Range, issues related to health and human services have filtered into businesses.
"Working for causes has become a major marketing tool," she said. Doing good and doing business.
Still, there is a bind. Nature tells us that specialization makes one vulnerable to extinction, a truth that may account for the longevity of larger, full-service agencies and the high turnover among small ones. In time, the local client base may achieve more depth or something on the horizon such as Web TV may call off all bets. Meanwhile, even the most talented designers and writers and MBAs in marketing should think long and hard about moving in and setting up shop aimed at local markets. The inn is full.

A flourishing economy tends to carry over to the advertising and marketing agencies that sprout up to serve it.In Northern Colorado, however, the advertising and marketing industry appears to be characterized not by sprouting but by equilibrium. The regional picture has remained stable and balanced for the past 10 years, with small agencies coming and going over that time.
Meanwhile, bigger players have moved outward, developing their presence in the national and world markets.
Some clear evidence of the advertising equilibrium may be found in the Yellow Pages of the 1987 phone book. In 1987, there were five listings for…

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