Advertising Industry in Detroit

[MotownSpartan]

"GM also recently opened up Cadillac for review. Boston-based Modernista has had the account since it was stripped from the Troy office of Leo Burnett in 2006. Leo Burnett won't say if it will bid on its old account, estimated to be worth about $225 million.

The GM/C-E news comes on the heels of Chrysler and Omnicom Group’s BBDO potentially parting ways in 2010, possibly ending a relationship that began in the 1950s. BBDO has about 450 staffers in a Troy office, all working on Chrysler. Less than a decade ago, it was about 1,200 people locally. Some of the work is also done from BBDO’s New York City office.

Some of the Chrysler account work [[total measured media was $1 billion-ish last year) has already been pieced off — San Francisco-based Publicis & Hal Riney, Dallas-based Richards Group and [[fortunately for the Detroit ad world) Southfield-based GlobalHue."
http://www.crainsdetroit.com/section...Id=personaDest

I've noticed that much of the advertising work that's been moved from Detroit ad agencies has moved to agencies that are located in cities [[not suburbs like the Detroit agencies). Is there a connection between being located in an urban location and creativity, particularly as it applies to ad agencies? Do you think that creative types are stifled by being out in the suburbs or are they more productive in urban centers? Is there any connection in particular between auto industry work moving away from suburban agencies towards urban ones [[seemingly) or is this just a random occurrence as it relates to Detroit? Are ad agencies in other major cities [[Chicago, NY, Boston, SF, etc.) located in the suburbs or is this a Detroit phenomenon? Finally, is there any chance that any of the Detroit agencies will relocate to downtown Detroit?

[Dustin89]

I recently wrote an opinion column related to this subject:

http://theoaklandpress.com/articles/...3572778298.txt

Dustin

[Zimm]

as someone who, until a couple of years back, worked in the industry here, i can say with some certainty that the only think more gone from Michigan than automotive manufacturing jobs are automotive advertising jobs. those dollars are long gone, and if/when any small percentage of them return, they will provide far fewer jobs, many of which will not be local. it has been happening for years. the recent economic crisis has only hastened the process.

all of this is why i'm back in school, getting as far from advertising as possible...

[4Oranges]

Right there with you, Zimm. Lost my automotive event marketing job last February and spent all of a month looking before realizing that if jobs in my field ever did come back, they were NEVER going to come back at the money that was spent before. So I am back in school as well, pursuing something that will hopefully make my time on this mortal coil more meaningful, to me anyway. Somebody has to advertise the shiny new cars and their accessories - - it just ain't gonne be me ever again! And I've never been happier....!

[MotownSpartan]

Dustin,

What do you think the odds are of the legislature passing the reform you called for? Anyone else here associated with the industry that can comment on why all of Detroit's large ad agencies seem to be located in the suburbs?

[dcmorrison12]

It's a well known fact that young professionals seek out urban areas that are vibrant, exciting, walkable and have easy access to mass transit.

So, I'd say a factor in these moves has to do with the young professionals working at the urban ad agencies

[Johnlodge]

So you think the reason the auto companies are rebidding the work is because the ad agencies aren't in a city?

Not because Chrysler, for example, owed BBDO Detroit millions of dollars prior to the bankruptcy? Or possibly because other agencies are able to do the work cheaper, since they have higher volume from other industries, and weren't stiffed out of said millions of dollars by these companies already?

Nah, must be because their office is located in a city. That's how large corporations decide who to bid work out to.

[MotownSpartan]

So you think the reason the auto companies are rebidding the work is because the ad agencies aren't in a city?

Not because Chrysler, for example, owed BBDO Detroit millions of dollars prior to the bankruptcy? Or possibly because other agencies are able to do the work cheaper, since they have higher volume from other industries, and weren't stiffed out of said millions of dollars by these companies already?

Nah, must be because their office is located in a city. That's how large corporations decide who to bid work out to.

That's not really a long the line of thinking that I was going for. I don't have any answers, just questions but it seems that the theory would be more that urban ad agencies attract the young creative class, which in turn produce better work product than agencies in the suburbs [[because they can't attract talent like the urban ad agencies). Does anyone with knowledge of the industry think there is truth to this?

[Johnlodge]

The relationship between Chrysler and BBDO has be come increasingly strained over the past year. Chrysler, which only accounts for about one percent of Omnicom’s total business, owed BBDO more than $58 million when it declared bankruptcy last spring. BBDO has already laid off about 25 percent of the employees handling the automaker’s account and cut back operations at its Troy, Michigan, office as Chrysler slashed its spending by more than 70 percent from $840 million in 2008 to $230 million this year. When Chrysler consolidated its work nine years ago, the account was worth $1.8 billion annually.

http://www.allpar.com/news/index.php...le-ad-agencies

Not really surprising these two companies can't find a way to sign a new contract, now that the current one is expiring. I'd point to things like this before suggesting that somehow the agency's office location has something to do with it. Of course for dcmorrison, the opportunity to start a city vs. suburb nonsensical line of reasoning is just too tempting.

[dcmorrison12]

JohnLodge - It's not nonsensical to say that urban areas, cities, attract the young creative class. It's a known FACT.

Historically, and to this day, this is a major selling point OF cities. It's a place where people can get together, share ideas and become active. Of course, other factors are there, such as efficient use of space, entertainment, transportation hubs and convenience.

It's been well documented that young professionals seek out urban areas.

IN FACT, research has shown than most graduates, straight out of college, will chose WHERE they want to live, BEFORE they have a job. You pair that with the known fact of these young professionals preferring urban areas, and you get your support for why ad agencies in major cities may have a better chance of finding clients.

Michigan has been witnessing a "brain drain" for a while now, although exacerbated due to the poor economy. It's been documented in the Freep and Detnews that this is due to lack of jobs, and vibrant city centers. [[We all know Michigan does not support its cities, as evidenced by the large amount of failed cities)

Having a vibrant city attracts the ever so important, and attractive [[to employers) young professionals. This can help persuade businesses to move to the city where they are located. Where there are young and ambitious employees, there will be fresh new and exciting ideas. So, it is definitely possible that urban ad agencies have a better chance of attracting clients, due to having more young professionals employed.

[Johnlodge]

None of this has anything to do with why the local agencies are losing/parting ways with the auto industry that has supported them for decades. Like everything else around here, they depending heavily on one industry, and got burnt.

Do young creatives prefer an urban work environment? Sure, many probably do. Is that why Chrysler is leaving BBDO, or why McCann lost Buick? No.

[gnome]

MS, your entire premise is laughable on its face if for no other reason than you think that the age of a creative person has something to do with doing good work. Age has nothing to do with it.

Most agencies in the metro area use to be in Southfield. Doner, Campbell-Mithun, Meldrum, BBDO, Bruce and Chato, Yaffe, Wm Esty, Berline, Don Coleman ... along with a half dozen more. They were there because their clients were close and taxes were low.

What attracts the creative class is the client and the work they need. Not whether an office is in a suburb of a shitty city. You have cart before horse. It is the clients who attract creative, not the other way around.

If you want to wonder about why we don't have exciting clients around here, you might want to consider the regressive business environment that comes out of Lansing and not whether hipsters in skinny jeans can't find a decent latte in Madison heights.

[MotownSpartan]

MS, your entire premise is laughable on its face if for no other reason than you think that the age of a creative person has something to do with doing good work. Age has nothing to do with it.

Most agencies in the metro area use to be in Southfield. Doner, Campbell-Mithun, Meldrum, BBDO, Bruce and Chato, Yaffe, Wm Esty, Berline, Don Coleman ... along with a half dozen more. They were there because their clients were close and taxes were low.

What attracts the creative class is the client and the work they need. Not whether an office is in a suburb of a shitty city. You have cart before horse. It is the clients who attract creative, not the other way around.

If you want to wonder about why we don't have exciting clients around here, you might want to consider the regressive business environment that comes out of Lansing and not whether hipsters in skinny jeans can't find a decent latte in Madison heights.

Gnome, I'm merely asking a question about the connection between urban spaces and creativity. Obviously I'm not suggesting that one particular agency loses or gains work because it's in the suburbs/city... I"m asking more generally about whether ad agencies in other major cities are located in the suburbs as opposed to the city center [[like in Detroit). I'm also asking if ad agencies in Detroit can recruit the creative class to the same extent as agencies in other locations and whether this has anything to do with the fact that they seem to all be in the suburbs. Again, I'm not saying there is or is not a connection, just asking questions for those in the industry and who know about the industry.

[Johnlodge]

Gnome, I'm merely asking a question about the connection between urban spaces and creativity. Obviously I'm not suggesting that one particular agency loses or gains work because its in the suburbs/city... I"m asking more generally about whether ad agencies in other major cities are located in the suburbs as opposed to the city center [[like in Detroit). I'm also asking if ad agencies in Detroit can recruit the creative class to the same extent as agencies in other locations and whether this has anything to do with the fact that they seem to all be in the suburbs. Again, I'm not saying there is or is not a connection, just asking questions for those in the industry and who know about the industry.

The ad agencies around here are where they are for the same reason many of the other business are where they are, as gnome pointed out. If that's not helpful enough, read Origins of the Urban Crisis.

Do the agencies here have trouble attracting talent? Probably not. I doubt finding employees is one of their biggest problems right now.

[hybridy]

completely false-take a local example

http://www.campbell-ewald.com/

when they present they like to say they're from detroit. i was interested in an internship with them until i figured out they were in warren. their headquarters is directly across from the tech center. chevy and the navy are their largest clients so location makes sense for them

[Dustin89]

Dustin,

What do you think the odds are of the legislature passing the reform you called for? Anyone else here associated with the industry that can comment on why all of Detroit's large ad agencies seem to be located in the suburbs?

Hi MotownSpartan,

After doing the leg-work on the column and speaking to people both in the advertising and production industries and at the state of Michigan, my impression is that the exclusion of commercial work from the tax credit could be resolved at the executive [[Governor and/or Dept. of Treasury) level. The bill was passed by the legislature with the intention of including this work, and I have not heard anybody say that anything is required on their part to resolve this.

Dustin

[BShea]

Hi MotownSpartan,

After doing the leg-work on the column and speaking to people both in the advertising and production industries and at the state of Michigan, my impression is that the exclusion of commercial work from the tax credit could be resolved at the executive [[Governor and/or Dept. of Treasury) level. The bill was passed by the legislature with the intention of including this work, and I have not heard anybody say that anything is required on their part to resolve this.

Dustin

I have talked to treasury and the Senate Fiscal Agency, and they agree that the bills were muddily written [[so they say) and that an amendment is required to include commercials. I was under the impression that part of the budget resolution includes tamping down the incentives while also properly including commercial work.

[ghein]

I wouldn't completely discount the lack of talent as the reason why ad agencies around here are going under. However, it's not a city vs. suburbs thing, it's a Detroit vs. everywhere else thing. People don't want to live in Detroit. Those of us who were born and raised here may like it, but do you really think talented people from around the country are open to moving here if a local agency recruits them? When I tell people from around the country that I'm from Detroit, I still get stupid questions like "really? But isn't it too dangerous to live there?"

Agencies in Boston, New York and Chicago can recruit talent from around the country because they are cities with good reputations that people [[young and old) want to live in. Businesses in Detroit pretty much can only hire from the pool of Detroiters who were born and raised here and don't want to leave. This is why Comerica left; they couldn't hire the caliber of people they wanted.

This is why I'm such a big booster of the city proper. We need jobs and new industries here, but I don't believe that start-ups and entrepreneurs from around the country will look at Detroit as a viable option, regardless of how nice our suburbs are. Our reputation preceeds us.

[artds]

Detroit is an anomaly in the way that its metro area has evolved.

If you moved just about any contract away from a metro-Detroit based company to a company located in another metro area, chances are that it would end up in the hands of a company located in an urban downtown.

Thus, the fact that this advertising work is going to companies located in urban areas is more likely just incidental than anything else.

[BShea]

Businesses in Detroit pretty much can only hire from the pool of Detroiters who were born and raised here and don't want to leave.

Untrue for most of the ad houses. Places like Campbell-Ewald, Doner, BBDO, etc, are filled with people from around the country. And yes, they have a lot of local people, too ... and Michigan produces talented people. Your birthplace is immaterial to your creativity and talent. And I'd note that the NY, Chicago and L.A. shops have a lot of local folks working there, too.

Plenty of Detroit folks move on to other agencies and work, and plenty come here.

If the Bright Lights/Big City thing is what some 22-year-old kid wants [[and I'm picturing Ryan from "The Office") then Detroit and every other city between the coasts doesn't have a chance at them.

In a bad advertising industry climate, I have trouble imaging some talented kid is going to stick with a dead-end small shop job in NYC because he/she doesn't want to accept a position to do high-profile work on national Chevy advertising at Campbell-Ewald. Maybe I'm wrong ...

[MotownSpartan]

If the Bright Lights/Big City thing is what some 22-year-old kid wants [[and I'm picturing Ryan from "The Office") then Detroit and every other city between the coasts doesn't have a chance at them..

- I don't think this is necessarily true. As a fairly recent graduate, I know a lot of people from Michigan/the midwest who have moved to Chicago. As another poster mentioned earlier, the vast majority of people I know decided they wanted to live in Chicago BEFORE they got a job there. This pattern of deciding where they wanted to live before they had a job held true for other cities as well [[of course, the financial meltdown may have changed this slightly... but not for the better in Detroit given our high unemployment rate).

In a bad advertising industry climate, I have trouble imaging some talented kid is going to stick with a dead-end small shop job in NYC because he/she doesn't want to accept a position to do high-profile work on national Chevy advertising at Campbell-Ewald. Maybe I'm wrong ...

- Some of the advertising people I know specifically moved away from Detroit because they didn't want to work on automotive work given the state of the industry right now. I think that talented people from around the country are probably very leery of getting involved in an ad shop that relies as heavily on the auto industry as the metro- Detroit agencies seem to. Again, I'm sure there are counter-examples and my personal experiences are merely anecdotal. I think doing auto industry work would be incredibly challenging and rewarding, although I'm not sure that most of my peers agree at this moment.

[Johnlodge]

You ask questions, and then don't listen when the correct answers are given to you. So what's the point of asking? Your friends who moved away probably couldn't find a job here right now if they wanted to. As you've noticed, the local agencies aren't begging for talent right now. I know very good, experienced, talented people in the field who are looking for work here. If your friends stayed around, it wouldn't make the advertising industry here any stronger, because there are no clients for them to take on. You're trying to put the cart before the horse, as said before.

Like I said, if you want to argue that a stronger, healthier city would lure more businesses, and then in turn the ad agencies here would be stronger because they have more clients, than I can see where you're coming from. If you want to argue that having an abundance of skinny jean hipsters makes the ad agencies in a given locale more profitable, you are way off the mark. The agencies here can find all the talent they need, in fact people compete extra hard to fill whatever slots become available. They are not hurting for creative talent, they are having to let creative talent go because they are losing money.

[ghein]

Maybe my personal experinces are not the norm, but my office here in the D is mostly local talent, whereas when I lived in Chicago it was a melting pot of the midwest and beyond.

Businesses in Detroit pretty much can only hire from the pool of Detroiters who were born and raised here and don't want to leave.

In a bad advertising industry climate, I have trouble imaging some talented kid is going to stick with a dead-end small shop job in NYC because he/she doesn't want to accept a position to do high-profile work on national Chevy advertising at Campbell-Ewald. Maybe I'm wrong ...

If it was his only decent offer, yeah, he'd move to Detroit. The point I was driving at was that if that talented kid wanted to get out of his dead-end shop in NYC, odds are he would do everything in his power to go anywhere but Detroit. I believe that Detroit is not the first choice for most of the best and brightest out there, and it is going to hurt our local industries in the long run.

[MotownSpartan]

Your friends who moved away probably couldn't find a job here right now if they wanted to. As you've noticed, the local agencies aren't begging for talent right now. I know very good, experienced, talented people in the field who are looking for work here. If your friends stayed around, it wouldn't make the advertising industry here any stronger, because there are no clients for them to take on. You're trying to put the cart before the horse, as said before.

I have some who moved straight to cities like Chicago out of college and others who worked for Detroit agencies and voluntarily left to seek out work in other cities.

[Johnlodge]

I have some who moved straight to cities like Chicago out of college and others who worked for Detroit agencies and voluntarily left to seek out work in other cities.

Again, your friends leaving have absolutely zero effect whatsoever on the local agencies.

If every single creative person wanting a job in advertising moved to the area, the coffee shops would be extremely busy, but the ad agencies would still be folding, and those people would all be taking jobs at Wendy's. The agencies need clients, not talent. They are not losing business because they are located north of an irrelevant latitude and don't attract your friends, they are losing business because our local economy is garbage, and the one industry that supported them for years is shrinking. I'm not sure how many other ways I can word this for you.