Aspen Quietly Grows Into L.A. Marketing Powerhouse.

ASPEN Marketing Group Inc. is likely the biggest marketing company in Los Angeles you've never heard of.

In fact, Aspen might be the biggest marketing company in L.A., period. With projected 1999 revenues of $200 million, the only possible challenger is giant Playa del key ad agency TBWA Chiat/Day Inc., which reported 1998 billings of $1.67 billion (likely putting its revenues somewhere in the $200 million range).

The difference, of course, is that anybody who knows anything about marketing has heard of TBWA Chiat/Day. But Aspen Marketing Group?

One reason for Aspen's low profile in L.A. is that it only recently became headquartered here. Until former Petersen Publishing President Neal Vitale took over as chief executive in February, Aspen was based in Evergreen, Colo. But another is its nature as a specialist in the back end of the marketing business.

Aspen is a sort of mini-Omnicom Group Inc., only the opposite. While the giant communications holding companies like Omnicom have built up vast networks of advertising and public relations agencies, Aspen has been rolling up companies that specialize in myriad other marketing disciplines besides advertising and P.R.

Since 1996, Aspen has acquired 10 companies in such businesses as promotional products, event marketing, direct mail, voicemail marketing and Web-site development. The most recent came in mid-October, when Aspen bought a Birmingham-based promotional products distributor called Norris Sales Co.

In an era when traditional advertising has lost some of its luster, Aspen's rapid growth is a testament to the increasing popularity of back-end marketing services. "If you look at long-term trends in advertising and promotions, you'll see there's been a pretty dramatic trend away from advertising and toward more measurable forms of marketing," said David Wong, general partner with Brentwood Associates, which owns a majority stake in Aspen.

Not counting new acquisitions, Aspen's existing businesses are projected to grow by 20 percent in revenues this year, according to Vitale.

Aspen still has a lot of buying to do. In late June, it closed a $120 million line of credit with Banque Nationale de Paris, and it's looking hungrily for more fast-growing marketing companies to acquire.

The end game in all this is to go public and get even more money to get even bigger. This is an area in which Vitale has a good deal of experience.

He and his investment banker partners acquired Petersen Publishing in 1996, bought up a slew of publications to build one of the biggest specialty magazine groups in the country, and took the whole thing public just a little more than a year later -- only to turn around and sell the company to British publisher Emap early this year. Everybody involved made a bundle; the partners spent $450 million in a leveraged buyout of Petersen in 1996 and sold the company to Emap for $1.2 billion.

Vitale left Petersen in June 1998 over management conflicts with Chief Executive Jim Dunning -- "Companies need one guy in charge and he got there first, so we agreed to part ways and end that confusion," is the way Vitale puts it. He confirmed that a public offering for Aspen is in the cards, perhaps as soon as early next year.

"We can say something that advertising agencies can't say, which is, 'If we're not making money for you, fire us,'" Vitale said.

Aspen isn't the only, company in the "advertising specialties" market on an acquisition drive, but it is among the most unusual. Most of the acquirers tend to stick to a given segment, such as promotional products or direct response. Few are going after such a diverse range of marketing services -- though that may be about to change.

One of Aspen's biggest competitors might turn out to be Chicago-based Ha-Lo Industries, a $600 million-in-revenues public company that is branching out into other marketing services because its core business of promotional products is slowing. (Ha-Lo bought one of L.A.'s biggest promotional products distributors, Idea Man, in January.)

After announcing it would miss earnings estimates for the second quarter in a row in mid-October, Ha-Lo's stock is in the tank and its management is talking about buying more marketing-services companies, like Web developers and direct-response specialists. That makes its business model sound a heck of a lot like Aspen's.

Two more titles

So many Los Angeles-focused magazines are popping up recently, it's proving a challenge to track them all.

Two weeks ago, this space chronicled the launch of five new L.A.-centric titles, but missed two others: Southland and Real Estate Southern California.

The latter, as it sounds, is a trade publication for the local real estate

industry published by New York-based Real Estate Media Inc. The former is yet another effort to succeed in the fiercely competitive city magazine business. The burned wreckage of titles like Buzz and LA Style hasn't discouraged the publishers of Angeleno, Channel Los Angeles and now Southland from jumping into the fray.

Southland differs from the other local city magazines in that you'll find houses and scenery on its cover, not movie stars. The main focus is on homes, art, profiles and architecture -- and even the celebrity stuff has an architectural bent, such as a look at actor Dennis Hopper's home in the premier issue.

That focus isn't an accident; Publisher Steven Moser was the West Coast ad director for Architectural Digest for 13 years before leaving to start his new venture last year, and Editor Elizabeth McMillian was the architecture editor at the same magazine.

The publication, which launched last spring and has a controlled circulation of 40,000, is entirely funded by Moser. He acknowledges he's not making money yet, but says advertiser interest has been strong so far.

"I might be nuts, but we're having fun with it," he said.

News. Editor Dan Turner writes a weekly column on marketing for the Los Angeles Business Journal.