Like other chief marketing officers in the Boston area, Don Lane faces an important question: whether to buy local.
Advertising, that is.
As the new chief marketing officer at the Saucony shoe company in Waltham, Lane may be looking for a new ad agency later this year. If that happens, he would prefer not to have to look too far.
“An agency in our backyard would be preferred,” said Lane, who spent much of his career at the Boston advertising giant Arnold. “I’m a big fan of the Boston ad community. There’s a ton of talent here. [But] the Boston ad community needs to do a better job capturing and selling what makes the city a hotbed of creativity.”
Time was, Boston companies usually hired Boston advertising agencies. But now, if Lane stays in his backyard, he’d be bucking an industry trend. Being local is no longer an advantage for an ad agency; proximity and geography barely seem to matter anymore. There are no hard numbers or clear statistics, but ad executives said the shift has been plain to see in recent years. “There isn’t that geographic loyalty anymore,” said Rick McKenna, who runs a local brand consultancy, Altantic Strategies.
“Social media and the Internet has totally changed the perspective. . . . If somebody is cheaper elsewhere, [clients] are going to go for it.”
The ad industry is dealing with major nationwide shifts: frequent turnover among the chief marketing officers who set the advertising agendas for corporate buyers; the rise of the “in-house agency,” an internal squad that does more advertising production; a move away from the “agency of record” model, with one firm handling all the disparate marketing needs for a company; and an emphasis on targeted marketing on digital platforms, rather than big TV spends.
Several of Boston’s big agencies have continued to grow their staffs, regardless, in part by winning more business from out-of-state clients. But nearly every Boston agency of significant size has been affected by the trend away from local preference.
Hill Holliday came up with “Responsibility. What’s your policy?” for Liberty Mutual’s consumer business. Arnold told stories “Straight from the bog” for Ocean Spray. And Full Contact recruited the actor David Hasselhoff to hawk Cumberland Farms coffee on store signs (hashtag #icedhoffee) and in a goofy, beach-themed music video (“Thirsty for Love”).
All of those accounts have since moved to out-of-town agencies.
Even Saucony, which used to work with Mechanica, an ad agency in Newburyport, has since used agencies from outside Massachusetts.
It’s a sensitive issue in Boston ad circles. None of the city’s three big traditional agencies — Hill Holliday, Arnold, and MullenLowe — would provide an executive to comment for this story.
There have been job cuts along the way. But based on data compiled by the Boston Business Journal, Arnold was the only one among the Big Three with a substantial decline in Massachusetts employment over the past decade: Local jobs there dropped to 300 in 2018, from 525 in 2009.
Meanwhile, the local head count at Hill Holliday went up by nearly 100, to 559, and at Mullen, which reported 500 workers, compared with 421 a decade earlier. (Digitas, a digital-focused agency, outranked them all last year, with 605, but the company was not included in the BBJ rankings in 2009.)
Being local still helps sometimes. For example, the new owners of the Papa Gino’s and D’Angelo chains decided to use Full Contact, which had done campaigns for the two chains in the past. The chains’ new chief marketing officer thought it was crucial to have a nearby partner to help design the latest campaigns that launched this spring.
Meghan McDonnell, president of the consultancy Pile and Co. in Boston, said she has noticed a shift away from local preference in other cities, too.
“There were times when clients really looked at the geography of an agency as being an important factor,” said McDonnell, whose firm helps companies pick ad agencies. “That’s less important to clients these days. It’s not that they don’t want a close relationship or require face-to-face meetings. But with technology, there are a lot of ways to have meetings face-to-face without being across the street.”
Locally, Steve Connelly has been sounding the alarm. The head of Connelly Partners said Boston agencies should do a better job promoting their work, and the city.
He hangs some of the blame on corporate consolidation, as many well-known Boston brands have been acquired by out-of-state companies: Reebok, John Hancock, Gillette.
“We have fewer brands that are based here to make marketing decisions,” Connelly said. “The ones that are here don’t hire here anymore.”
Connelly said his firm sought to bid on a new ad campaign by a prominent local company last year, but was told not to bother because that business wanted to go outside the Boston area for a change. He declined to identify the brand.
“I’m fine swinging and missing,” Connelly said. “I’m not fine with not playing.”
Other ad executives aren’t as concerned.
Andrew Graff, cochair of the Ad Club’s executive committee, said Boston agencies are still competing on a national level. And each of the Big Three are known for clients that aren’t based here: Arnold with its Progressive ads featuring Flo, Hill Holliday for Bank of America, and Mullen for JetBlue.
Moreover, Graff said, the move away from traditional TV airtime to social media and events has had a bigger impact on the industry.
Graff cited the Red Bull Crashed Ice event in February, which pitted skaters against each other on a downhill track in Fenway Park as an example of the new wave of marketing.
“Branding is still very much alive,” said Graff, who runs the Allen & Gerritsen agency in Boston. “But it requires you to be way more creative than simply doing the big campaign and running it on TV.”
The makeup of Boston’s business community might be playing a role, though. Biotech companies, for example, don’t tend to be heavy marketers. And local consumer tech firms, such as Wayfair and DraftKings, have in-house operations to handle much of their ad work.
Fred Bertino, president of the local ad agency MMB, doesn’t think being based in Boston is “holding us back.” Some chief marketing officers might want to chase certain agencies that happen to be hot at a particular moment. But, he said, that’s always been the case.
“If they could find what they want in Boston, they would hire in Boston,” Bertino said.
Jon Chesto can be reached at firstname.lastname@example.org. Follow him on Twitter @jonchesto.