A year after Stephanie Vorhoff moved to Baltimore to open a branch office for Weinstock, White & Associates, a Memphis, Tenn., ad agency, she's fighting to keep the doors open.
In the rough-and-tumble world of advertising, the loss of a major client can close agency doors. But even after losing their only big client -- an $8 million account with Hardee's/Roy Rogers -- the owners of Weinstock, White's local office are unwilling to fold.
"We're going to go on fighting," Ms. Vorhoff says.
Today, a sense of urgency dominates Weinstock, White. Its work for Hardee's/Roy Rogers is winding down and will end in less than three weeks. To survive, the firm's employees are scrambling to find new clients.
Their battle to find those clients comes as the advertising industry is emerging from its worst period since World War II. Total ad spending in the United States fell in 1991 for the first time in 30 years and experienced its largest decline since 1942, says Robert Coen, an advertising industry forecaster with McCann-Erickson U.S.A., an advertising agency in New York.
And although Mr. Coen expects ad spending to increase 5 percent this year, agencies will be hard-pressed to find new business. One possibility, he notes: start-up agencies that can attract clients who are looking to save money on advertising.
Director of Account Services Bill Lang, who is coordinating Weinstock, White's search for clients, tries to remain optimistic. "Tomorrow somebody could call."
He accepted a job at Weinstock, White the day before it lost the Hardee's/Roy Rogers account. But he has no regrets about his decision. "You have to try to get opportunities when you see them."
The toughest part of losing the account, Ms. Vorhoff says, is knowing that the agency isn't to blame.
Weinstock, White's main reason for opening the Baltimore branch was to serve the Hardee's Restaurants in the Baltimore-Washington region. Under the initial arrangement, a New York agency handled the chain's national advertising, while Weinstock, White was in charge of buying space in the local media and creating collateral materials for display inside the restaurants.
Ms. Vorhoff hired eight employees, offering them the opportunity to help start an office from scratch. Within a few months they won the Philadelphia and New York Hardee's accounts as well, and opened another office in Philadelphia.
But their client was in turmoil. Customers were opposing Hardee's decision to turn the region's Roy Rogers restaurants into Hardee's. Throughout the winter, Weinstock, White conducted marketing studies, helping Hardee's conclude that it should reopen the Roy Rogers restaurants.
Ironically, Weinstock, White's conclusions cost the firm its business. Hardee's decided to establish Roy Rogers' as a separate company and appointed a new president. Soon thereafter, the Roy Rogers division fired the New York lead agency and decided to consolidate the national and local advertising accounts. All of the Roy Rogers business was awarded to Bethesda-based Earle Palmer Brown.
Ms. Vorhoff was notified by phone the afternoon of May 19. Within an hour, she called together her staff and told them the news. "It was pretty quiet," she recalls.
Although some members of the staff suspected they might lose the account, Peter Tahinos, an account executive, said it still was a shock. "No matter how much you prepare, you feel it," he says. "The next three days we were all at a loss. We were in a daze."
But the following Monday, they decided to fight to preserve the branch by finding new business. The restaurant chain had given them 60 days' notice, and they had one other small account, so they were assured of some income. What they didn't know was how far they could stretch that money.
The staff immediately went to work, calling acquaintances, reading newspapers, looking for clues that companies might be looking for a new agency.
Each morning at 10, Weinstock, White employees gather to review their progress and brainstorm on ways to get new accounts. It's serious business, but staff members still manage a light-hearted banter throughout the meetings.
"They've got a Gestapo lady who answers the phone," Mr. Tahinos jokes about one prospective client.
"I haven't been told 'No' yet," Lana Robinson, another account executive, reports hopefully on another target.
Ms. Vorhoff recounts her frustrating attempts to reach a prospective client and concludes: "I'm going to keep calling until I at least get obnoxious enough that they take the phone call."
The conference room resembles a war room with lists, charts and maps taped to the walls. On the door is a paper headed: "Hot List" with the names of prospective clients.
Once they target prospective clients, they focus their research. They make trips to the library to investigate the client's history. Employees even do their own market tests. They have bought cases of soft drinks to get ideas for pitching to a specialty soft drink maker. And they have scouted fast-food restaurants and grocery stores, searching for ideas they can suggest to improve marketing and promotions.
Not only must they develop creative ad campaigns for prospective clients, they have to market themselves as well. They decided to package their agency history in a briefcase and send it to prospective clients. They hired a public relations agency to help them sell themselves. And they're considering a direct-mail campaign.
Some self-promotion ideas didn't fly. They considered hiring a plane to fly by a meeting in which executives from a fast-food restaurant chain were reviewing agencies. They even considered sending clients T-shirts imprinted with reasons they should hire Weinstock, White.
Workers at Weinstock, White are betting that their experience in the fast-food business will help them land a new account soon. They also may be able to take advantage of a recent trend in the advertising business of breaking apart large accounts into regions and awarding business to smaller agencies.
But Ms. Vorhoff says she also is realistic. "How long can you keep an agency open when there is no income coming in?"
Gary White, vice president of the agency, says that if the decision on whether to close the branch was based purely on economics, it probably would already be shuttered. "For us it's a people issue. This group has worked so hard, we'd like to see how many clients they can pick up."
Weinstock, White, which has annual billings of $24 million, has one other branch, in Santa Barbara, Calif. Mr. White says Baltimore could provide a strategic location to attract East Coast business.
But Mr. White can't predict how long this branch will stay open. So while fervently looking for new clients, the employees also must consider their own futures.
Bonnie Murray, the branch's project manager, and her husband have postponed buying a house until her job is more certain.
Agency employees still are getting paid, but everyone is more cautious. "I can't imagine anyone wanting to buy a $1,500 TV now," Ms. Vorhoff says.
Ms. Vorhoff and her husband have decided to remain in the area even if the agency closes, because they are tired of moving from place to place. She believes she could get a job with another agency or work in a company's marketing department.
Mr. Tahinos, meanwhile, spends about an hour each morning writing letters or making phone calls inquiring about job openings. With a wife and two sons, the Baltimore native cannot afford to be without a job for long.
"It's a crazy business, even when it's going well," he said.
He oversees the agency's only business, a small account for Acadia Windows and Doors, a business headed by Ms. Vorhoff's husband. Despite the rather desperate situation, he has surprised himself by continuing to come to work with a positive attitude.
Ms. Robinson and the others at Weinstock, White say they do not regret their decisions to go to work there. Helping open a branch office has been exciting and fulfilled an entrepreneurial bent most of them had.
"It was worth the risk," says Ms. Robinson, who had left her job as a marketing manager for a Wendy's franchise in Crofton.
Even the stress of trying to find new clients has its rewards, she says. "I feel like we're working for ourselves now. It's more intense. The people who are here want to stay here."
In recent days, the agency has received some encouragement. The soft drink maker and fast-food chain invited them to make a presentation. "There's light at the end of the tunnel, we just don't know how long the tunnel is," Ms. Vorhoff said.
Even if the agency isn't able to get enough business to stay open, Ms. Vorhoff says she is proud of her workers and the commitment they have shown. "We're going to go down fighting."