Thursday, January 10, 2008

A space odyssey.

A fish, the old adage says, rots from the head. Though I avoid all mouldering whenever and wherever I can, particularly mouldering of the piscine ilk, I do work in advertising so I am quite familiar with rotting crania. Posit that and allow me to extemporize on advertising agencies and space.

About forty years ago my father was the Chairman of a large and thriving agency that has since been amalgamated into obsolescence. That agency was an original tenant of what was then called the Pan Am Building. Ever optimistic, this agency leased five floors and sublet the two they didn't need at that time. I remember my father some years after this arrangement was struck remarking, "We make more from real estate than we make from advertising." Fast forward twenty years and I find myself working for a noted medium sized agency on lower 5th Avenue. This agency was one of the first to make the move from mid-town to what were then the wilds of 18th Street. I remember one of the eponymous owners saying to me, "We got this space for $13/sq. ft. We're making more in real estate than we're making in advertising. Yesterday I read about Ogilvy's big move west, thereby halving their real-estate costs. (There is NO truth to the rumor that their new tagline is "last agency before the Lincoln Tunnel.)

So my question is this. Why have we so devalued the value we add to brands that we have as an industry become a cost-center rather than a profit driver. Businesses that add value are on Fifth, Park and Madison. Agencies, that profession with the rotting smell, are cosigned to the boonies.

Until we embrace building real returns to our clients, locating agencies in Queens and Jersey is next.


Unknown said...

and do not for a second think the savings will go the only asset they claim they have: people.
well, not most of them at least.

advertising is now located in areas in line with its reputation; right next to used car companies lots.

Laura said...

Why not have advertising outsourced to Bangalore and then agencies can just make their money on subletting their space in Manhattan. Keep a few square feet for those with the very lofty titles and then watch profits soar.