'New' Poppe Tyson faces hard climb

Lorimar Telepictures Corp.'s recent restructuring of its USAdvertising and Poppe Tyson units faces a stern challenge in the current business-to-business advertising climate.

The parent's creation in March of a "new" Poppe Tyson as a large agency specializing in business-to-business advertising comes at a time when the segment has lost some of its allure.

Many of the familiar business-to-business agency names of the past -- such as Marsteller Inc., Ross Roy Inc. and Creamer Inc. -- have changed as those agencies have expanded their client rosters to include consumer accounts, due to the limitations of concentrating only on business-to-business.

In addition, spending by business-to-business clients was the first segment of the ad industry to dry up in the current ad slowdown -- making it an unlikely target for expansion.

Lorimar acquired Poppe Tyson from D'Arcy Masius Benton & Bowles and merged it into USAdvertising this year (AA, March 16). The joint operation took the name Poppe Tyson.

The move was triggered, in part, by problems at the Boston office of Lorimar's largest agency, Bozell, Jacobs, Kenyon & Eckhardt. BJK&E's Boston operation in February lost its largest account, the $20 million Ocean Spray Cranberries business. That loss followed the departure from BJK&E last December of the $3 million-plus Bank of New England account.

So Lorimar folded BJK&E's Boston office, a consumer shop, and Union, N.J.-based USAdvertising into Poppe Tyson and said the merged unit would concentrate on business-to-business. Yet the diminishing supply of business-to-business ad dollars has some rival agency executives questioning Lorimar's strategy. The weakened business-to-business segment has spurred many such agencies to look elsewhere for new revenue sources. Spending cutbacks have made many smaller business-to-business shops to after more general business.

"Today most business-to-business advertising is coming from major, broad-based agencies," said Albert Bouchard, exec VP at WCRS North America, New York. "A lot of business-to-business advertising has disappeared [because] companies are merging or going into Chapter 11 [bankruptcy proceedings]," said Edmund Norwick, VP-director of business media, Griswold Inc., Cleveland.

Business-to-business shops are not aggressively seeking new accounts in their traditional specialty because it has become significantly less lucrative than consumer advertising, added Gene Thompson, VP-media director at Meldrum & Fewsmith, cleveland.

"The wave of consolidation [in American business] has hurt business-to-business [advertising] -- it's certainly hurt us," Mr. Thompson said. "Production costs are the same. . . and agency income is less."

WCRS' Mr. Bouchard agreed: "The bigger dollars come from consumer accounts -- that's why business-to-business agencies have been going after the large consumer budgets." However, Poppe Tyson Exec VP Gary Davis contended a large business-to-business shop is still viable.

"Lorimar took a look at the marketplace and saw several billion dollars being spent in business-to-business," he said. "You're talking tremendous growth [potential]." Despite business-to-business advertising's current slowdown, Mr. Davis is confident that the new Poppe Tyson will generate enough business to make the agency profitable. He claimed that the agency's experience in the field will attract new accounts. Poppe Tyson is based in Union, N.J. and also operates offices in New York and Boston.

Ron Vrba, a former executive at USAdvertising, became chairmanceo of Poppe Tyson and general manager of the Boston office. Mr. Davis, also formerly with USAdvertising, is general manager of the New Jersey office. Fergus O'Daly, formerly Poppe Tyson president, is president-general manager of the New York office. USAdvertising was established two years ago to handle client conflicts stemming from the merger of Bozell & Jacobs with Kenyon & Eckhardt.