Because of increasing technology and decreasing clients, the advertising climate in Rhode Island has become one where an agency could either shape up, shut down or ship out.
Looking at the Providence Business News’s first 1987 Book of Lists, very few of the listed advertising agencies remain in the area. The top three, Leonard Monahan, Saabye, Potter Hazelhurst and Spencer, Bennett & Nowak have all closed. The few agencies that did not shut down, either reorganized or left town.
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Jonathan Duffy, president of the Providence-based Duffy & Shanley, which was ranked fourth in 1987 spoke about why the company his father started in 1973 with the late Joe Shanley has been able to stay in business so long.
“We diversified,” he said. “I think that’s what has allowed us to hang around. The more services you offer, the more pieces of business you can get.”
Duffy said agencies had to become all things to all people to get more business. It also didn’t help that other industries were merging and consolidating.
“Everybody used to have a bank as a client,” he said, “but now there are three banks.”
His father, David Duffy, chairman of Duffy & Shanley, agreed.
“Today the landscape has changed 100 percent,” he said. “There are not as many headquarter companies, and there are fewer organizations with significant budgets that would warrant service by a large advertising agency.”
“As agencies closed, many of the good people went on to Boston shops, into New York or elsewhere,” he said.
The younger Duffy cited the closing of Leonard Monahan, which was number one in 1987 as Leonard Monahan Saabye, as a wake up call to the advertising community. The Providence agency filed for bankruptcy in 1998.
Bruce Leonard, former president of the defunct agency is currently a partner at Providence’s J&B LLC, along with Jason Grant, whose Jason Grant Associates was listed at number 10 in 1987.
“The business itself is going through a tremendous transition,” he said in a 1998 interview. “I think the traditional agency isn’t going to be the agency of the future. There will be less structure, things will happen faster because the work will be digital and people with ideas are going to be more important.”
Josh Fenton was with Leonard Monahan before the agency folded. He has since been a partner with RDW Group and is a partner with Trion Communications, which recently changed its name form McMahon Preston Communications.
He said Leonard Monahan, like Pagano Schenck & Kay, which moved operations to Boston in the early 1990s, and now is moving to New York, was limited by the fact that it was a great creative agency but could not handle full-service.
“Neither agency was a full-service agency, nor did they want to be full-service agencies,” said Fenton.
“The next model that grew out of that was RDW, which was full-service and they have been a dominant regional agency,” he said. “Now they need to sustain that. The cruel thing about this business is you just have to continue to grow. You can’t level off, or one by one blocks from your tower will start to go away.”
Mike Doyle, president of RDW Group, the Providence agency which has consecutively topped the list of area’s advertising agencies for several years, said RDW knew it was doing something different when it created the model, but not that the agency would be as successful as it became.
“We started our company under the umbrella of integrated communications,” he said. “Interactive and Internet are two of the more critical tools that were not even a twinkle in anyone’s eye in 1986. We started with five people in four rooms and we had no idea we would take on the giants (of the industry) and be in the position we are in today.”
RDW was on PBN’s 1987 list in a slightly different incarnation, as Rivers Trainor Doyle.
Mike Trainor left in 1994, to start Trainor Associates.
“Many agencies failed to recognize the real opportunity for survival and growth was to position yourself as a strategic consultant to your client,” said Trainor. “The new technology-driven economy challenged agencies to be able to be a consultant guide to businesses about how they need to adapt. The agencies that have stayed around are agencies that I think recognized this and made a significant effort to adapt.”
“If you were to look at the revenue-drivers for agencies 15 years ago, you would have seen most of those agencies would have had a very high percentage of their revenue driven by placement of media or hourly billing on creative work,” he said. “But 60 percent of our gross operating revenue is now derived from consulting fees, marketing planning, research and public relations counsel. We became a fee-driven business less dependent on media placement.”
Doyle said advertising is fundamentally defined with change, and technology has been the biggest catalyst for change.
“When we began 15 years ago, we had one memory typewriter, and then we has one computer,” he said. “Technology has absolutely changed our industry dramatically. We used to have contract board artists to do what you can now do with desktop publishing.”
Trainor agreed technology is largely responsible for the industry’s changes.
