Leaving Los Angeles: Why Have Network Agencies Reduced Their Presence in Southern California While Entrepreneurial Shops Have Thrived?

By O'Leary, Noreen | ADWEEK, February 24, 2014 | Go to article overview

Leaving Los Angeles: Why Have Network Agencies Reduced Their Presence in Southern California While Entrepreneurial Shops Have Thrived?


O'Leary, Noreen, ADWEEK


Earlier this month, Ogilvy & Mather Los Angeles cut 33 jobs, all but eliminating its ad agency presence (already drastically down from its 350 level in 2000). In December, DDB L.A. parted with longtime client Wells Fargo and relocated 30 agency employees to San Francisco.

Some 20 years ago, network agency offices were the dominant players in Southern California. They'd land a local anchor client--usually a car, entertainment or technology account--and try to build from there, despite the dearth of big marketers out West.

But even as technology--driven from the West Coast--transforms the industry, many remaining L.A. network agencies still have more of an outpost mentality than an entrepreneurial reflex born of such change.

One reason is that West Coast network offices often conform to their headquarters' more traditional operating model, relegating them to service entities. "If the West was a different country, these agencies would be developed within that culture and have a clearer business role within the network," said Robert LePlae, former North American head of TBWA\Chiat\ Day and McCann Erickson.

Not surprisingly, then, L.A.'s industry dynamism comes from hot independent shops like 72andSunny and content creation upstarts.

"To thrive in this market, you have to thrive at the intersection of marketing, technology and entertainment," said John Boiler, founder, CEO, 72andSunny.

John Seifert, chairman, O&M North America, said Ogilvy L.A. will now focus on technological and social media PR work there. "We believe a strong presence is essential, but we don't think anyone has nailed the model of how to take advantage of it yet," Seifert said.

Aside from the vulnerability inherent in being dependent on a couple of clients, big-agency L.A. offices face other challenges. …

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