When 21st Century Group Inc. and U.S. Prevention Marketing merge this month, the combined company will begin life with a jump-start - a substantial chunk from the state's $14 million anti-tobacco advertising campaign.
The prospect of winning the $3.6 million contract - the 25 percent of the campaign earmarked for a minority subcontractor - was what prompted the two small firms to come together.
"We knew it was too big for either of our companies," said Adrian Harpool, the owner of 21st Century. "We couldn't do it alone, but if we combined our strengths we had a good chance."
Even together, the new 12-person company remains a small player in a city with national advertising and public relations firms employing hundreds. But its executives are hoping that the combined firm, which will operate as 21st Century Group - and the tobacco contract's high visibility - will send more deals their way.
"The hope is that as a larger agency we will be able to go after larger pieces of business," said Edwin V. Avent, founder of U.S. Prevention.
The two men have already targeted other contracts, submitting a bid last month for 25 percent of the Maryland Lotto's $15 million advertising budget.
The tobacco contract, by far the biggest that either U.S. Prevention or 21st Century has won, doubles what their combined billings were a year ago.
The merger also allows 21st Century the chance to rebound after a planned merger with Baltimore-based The Reeves Agency was derailed when Reeves went bankrupt and closed.
Harpool is hoping that this time it'll be different as his public relations, marketing and advertising agency joins with a marketing company specializing in the promotion of health care to African-Americans.
Both men left promising careers to try their hand at running their own marketing and public relations companies.
Harpool gave up a career as a private business consultant in 1995 to start 21st Century. He and a partner who eventually left the company opened the business in an efficiency apartment equipped with an old fax machine and computer. The firm grew slowly to its five full-time and four part-time employees.
Mayor Martin O'Malley hired the firm during his election bid to develop radio advertisements targeting minority voters. The company created Baltimore-Washington International Airport's marketing campaign to attract Chicago travelers. And, it is the public relations firm for American Skyline Insurance Co., the company started last year to bring cheaper insurance to city residents.
Avent, 39, opened U.S. Prevention in 1990 after careers in Baltimore as a restaurateur and as a sales and marketing director for Career Communications Group. After reading reports that African-Americans were suffering from health problems at rates disproportionate to the general population, he decided to marry his business background with health care marketing.
His Glen Burnie company made its mark developing AIDS and HIV prevention programs aimed at African-American teen-agers for state and city agencies, including ones in Maryland, California and New York City.
Avent also developed the Umoja Sasa (Unity Now) condom, which his firm sells to health departments and nonprofits. The condom is packaged in a matchbook with the colors of the African-American flag: red, green and black.
Avent and Harpool, 47, plan to move into a 7,600-square-foot office on Light Street this month. The new company will keep the 21st Century Group name, and U.S. Prevention Marketing will serve as the health care division. Harpool will be chief executive officer, and Avent chief financial officer.
Minority-owned advertising and marketing firms, such as 21st Century and U.S. Prevention, represent a small fraction of the industry and tend to be smaller than the average firm, making it harder from them to compete, analysts and advertising executives said.
Although they don't track firms by race, officials with the Advertising Association of Baltimore estimate that fewer than 5 percent of its 500 member firms are minority-owned, most likely with less than 50 employees.
"It takes a lot of people to handle the big accounts," said Steve Klein, president of the Advertising Association of Baltimore. "Size makes a difference whether you're a minority-owned firm or not."
Small minority firms, however, are finding ways to compete.
Just as the larger companies have discovered and targeted the $1 trillion U.S. buying power of Asians, African-Americans and Hispanics, minority firms are using their expertise and life experiences to reach these audiences. Others are contracting with larger companies or merging into bigger firms.
"In order to be better able to service more traditional marketers, they have to grow, and it seems like the trend is to grow through mergers and strategic alliances," said Angel Rivera, diversity chairman of the Advertising Association of New York.
Avent and Harpool first talked about combining companies in late 1998, shortly after Maryland announced that it and several other states had settled a lawsuit with the country's largest cigarette makers. Maryland stood to get more than $4 billion, part of which was to be used for an anti-smoking campaign.
Last year, the General Assembly passed legislation proposed by Gov. Parris N. Glendening that aims at awarding a quarter of state business to minority companies. Harpool and Avent knew larger companies would be looking to fill that part of the contract.
Late last year, when the state started seeking bids for the contract, the two decided to begin the merger. The men began approaching the larger companies as a team, under the 21st Century Group name.
They were listed as minority contractors on bids submitted by Baltimore-based Trahan, Burden & Charles Inc. and GKV Communications Inc., the company that won the contract in December. Subcontractors Logicon/ROW Sciences of Rockville, and Porter Novelli International, a New York public relations and marketing firm, will help develop the campaign
Roger L. Gray, president and chief executive officer of GKV, said 21st Century's versatility was a plus. Its combination with U.S. Prevention can only help, he added.
"Edwin Avent seems like a pretty sharp guy, and his agency has done the type of advertising we're about to launch; 21st Century has a broad range of expertise, from advertising to public relations," said Roger L. Gray, president and chief executive officer of GKV. "I don't see how this can't be anything but beneficial."
The 18-month contract began Feb. 1, and advertisements should start appearing in April or May, Gray said. The company hasn't divvied up assignments yet, but 21st Century Group is expected to work on all aspects of the campaign, from the development of television advertisements to pamphlets. The company expects to draw heavily from Avent's expertise with health care marketing.
Avent and Harpool don't expect their partnership to erase all the obstacles that confront a small, minority-owned firm. They say, for example, that they can't compete for most contracts on their own because of their size. Government jobs are alternative options, but Harpool complains that larger contractors often pool so many minority companies into a job that the workload is small and unprofitable.
At the same time, larger companies complain that there aren't enough minority companies with which to partner.
"I think the bottom line is that there needs to be more [minority-owned companies], because the concern is that the ones that exist are reaching the point where people may be taking on more than they can handle," said Tom Siebert, communications director for Trahan, Burden & Charles.
Avent and Harpool also worry about being pigeon-holed into handling only minority accounts.
"We've done campaigns where there is no kinte cloth," Harpool said. "That's not all we do."
"At the same time, we do bring that experience to the table, and we're not going to shy away from that," added Avent.
Gray said 21st Century won't be limited to minority marketing but that GKV will look to its expertise in that area. Avent and Harpool helped the company write the entire campaign that was presented to the state.
21st Century plans to hire four more people in the next year. it hopes the merger and tobacco contract is the prelude to more growth.
"We are grateful to have this opportunity," Avent said. "Hopefully, this is the beginning to the company becoming a major regional player."