.....Advertisement.....
.....Advertisement.....
Sunday, November 08, 2009

Roanoke Valley ad agencies: Surviving no spin

With a client base of mainly institutional-type businesses, Roanoke Valley ad agencies survive the recession.

A skull and advertising books decorate an office at The O'Connor Group.

Kyle Green The Roanoke Times

A skull and advertising books decorate an office at The O'Connor Group.

Jesse Couch (left), senior art director for The O'Connor Group, talks to Tamea Franco Woodward, president and CEO of EastWest DyeCom, about redesigning her company's Web site and logo.

KYLE GREEN The Roanoke Times

Jesse Couch (left), senior art director for The O'Connor Group, talks to Tamea Franco Woodward, president and CEO of EastWest DyeCom, about redesigning her company's Web site and logo.

Advertising firm president John Anstey thinks decades ahead while walking through 60 years of history.

Roanoke-based Anstey Hodge Advertising Group bought and renovated a 1950s gas station on Gilmer Avenue in Gainsboro this year, pumping 10 to 20 years of capital investment into the company. Anstey and David Hodge are confident their firm will survive.

The group is just one of the Roanoke Valley's advertising, marketing and design firms to stay afloat while much of the industry sank along with the global markets in September 2008. Of 110 members in the Advertising Federation of the Roanoke Valley, Jim Dudley, the group's president, said he hasn't heard of any regional advertising businesses that have laid off employees.

"It's been a lot more brutal in the major markets than it is in Roanoke," said Dudley, who owns his own advertising and design firm, Dudley Creative. "People have had to tighten a lot, but people haven't lost jobs."

Many of Roanoke's firms work with institutional-type businesses that haven't slashed advertising budgets as deeply as consumer-focused businesses. This client base gives the area a strength not enjoyed by retail- and finance-dependent firms in larger markets such as New York or Los Angeles.

"When consumer spending is down, it doesn't necessarily affect our clients," said Tony Pearman, chief executive officer of Access, one of Roanoke's largest advertising and marketing firms.

He ran down the list of what kind of businesses hire ad firms in the Roanoke Valley: higher education, nonprofits, industrial companies, services for senior citizens, health care and technology.

"Those things are a little bit more permanent in terms of their need, so that benefited all of us," Pearman said.

Access moved to an office on Patterson Avenue Southwest in late 2008, adding almost 14,000 square feet to its space.

It was a big investment, Pearman said, and a tough second quarter this year didn't make it easier on the firm. Still, Access' clientele, including Optical Cable Corp., ADMMicro and Hospital Corporation of America, helped it survive, he said.

A few blocks away on First Street in Old Southwest, the O'Connor Group hasn't recovered fully from the recession but is "fairing pretty well," president Bill O'Connor said. Profit margins will be the same as last year at the marketing, public relations, advertising and design firm, which handles campaigns mostly in the manufacturing field and some retirement communities.

The group's $1 million in gross sales last year was 10 percent to 15 percent lower than the pre-recession average, he added.

Another downtown Roanoke firm is more bullish: "We did not participate in the recession," said Thomas Becher, president of tba (The Becher Agency) on Norfolk Avenue. "What makes us tick is that we're not reliant on one industry, and we're full service."

In the firm's three-year lifespan, each year has seen increased revenue, he said. He declined to give specific sales numbers.

New York City-based Omnicom Group Inc. and the Interpublic Group of Companies Inc. had $13.4 billion and $7 billion in sales, respectively, last year, according to company filings. They're two of the four creative services companies that handle more than half of the world's advertising, marketing and communications business.

"Big firms that rely on big mass media spends are particularly hard hit," said June Blocklin, a partner at New York's Gilbert and Company marketing consultancy who talks with about 1,000 senior executives in the industry each year.

"I'm shocked" by the lack of downsizing at Roanoke's firms, she said.

Neathawk, Dubuque & Packett, which has a two-story office on South Jefferson Street, has added an account executive and will open an office in Raleigh soon. The company is getting more business, too, adding Virginia Western Community College and Hometown Bank to its client roster this summer.

The Richmond-based firm has five offices currently.

Todd Foutz, who runs the Roanoke office, attributes the growth to a strong client base. The office's business has followed the same trends as its clients, benefiting when business is good and struggling when clients cut back.

"They're looking ahead, and they're looking ahead with confidence, so that's great for us," Foutz said.

Neathawk, Dubuque & Packett's business was down in the first half of this year, he said. It's better now, so much so that the company is "back on track with our budget," he said. But the firm isn't back to the boom-time levels of 2006 and 2007.

Advertising budgets are an "easy cut" for businesses to make in slim times, Foutz said. "But the really smart marketers out there know that that's the time to put the money into it because everybody else is going to be cutting."

.....Advertisement.....