Chiat/Day/Mojo may shrink in number of offices, but it plans to retain its size, scope.

Chiat/Day/Mojo may shrink in number of offices, but it plans to retain its size, scope

Chiat/Day/Mojo, the biggest ad agency on the West Coast, may lose a chunk of itself in the coming months. But it will be a voluntary loss and the agency will still be the biggest both in L.A. County and on the rest of the West Coast.

The Venice-based agency announced last week that it plans to sell a majority interest in its San Francisco office to a management group of employees headed by Fred Goldberg. Goldberg runs the San Francisco shop, which is known for its California Coolers ad campaign. Like other Chiat/Day/Mojo offices, the San Francisco office is also known for the imagination that drives its advertising.

Chairman Bob Wolf, based at Chiat/Day/Mojo's Venice headquarters, said the agency will actually lose little in terms of size and profitability even though the San Francisco office accounts for about $100 million of Chiat/Day/Mojo's $1.2 billion in yearly billings.

"We'll still be a billion-dollar agency," said Wolf. He explained that part of the buyout deal is to move three major accounts -- Qantas, the Australian Tourism Commission and Koala Springs soft drinks -- to the Venice office. Wolf wouldn't say how much the three total in billings, except to acknowledge that it is "a significant amount."

An obvious question is why an agency would be willing to give up control of a $100 million office. The answer lies in Chiat/Day/Mojo's business strategy and a problem relating to the San Francisco office, Wolf said.

Wolf said the buyout, which is expected to be consummated by the beginning of July, is part of Chiat/Day/Mojo's business strategy and will solve a problem that has been nettling the agency for a while.

Chiat/Day/Mojo thinks of itself as a national agency that goes after big, national advertisers. But the San Francisco office sometimes wants to go after smaller, local accounts. The problem is, there are few big advertisers in San Francisco and Chiat/Day/Mojo's senior management doesn't want to spend the agency's time chasing small, local accounts.

Right now the problem Chiat/Day/Mojo runs into when it considers prospective clients is "Who is going to pitch the business, Los Angeles or San Francisco? There is sometimes a conflict with the San Francisco office in terms of what to pitch. They want to service local business whereas we believe in going after national business, which puts them in a bind," Wolf said. "We don't want to be just a local agency looking for local business."

Wolf says, in fact, that Chiat/Day/Mojo's policy is not to pursue any client that spends less than $5 million a year on advertising.

That is a remarkable statement for an agency in Los Angeles, considering how intensely competitive the advertising agency business is and how many big agencies in L.A. do go after small accounts. But Wolf says Chiat/Day/Mojo has the luxury of being able to eschew the smaller accounts because it has plenty of business.

Many of the big national accounts are not in Los Angeles or San Francisco, he said, explaining that the agency's strategy is to operate both its L.A. and New York offices as national shops that cast their net throughout the country.

Chiat/Day/Mojo will retain a minority ownership of the San Francisco operation for the time being, which will generate some income for the agency for a while.

Selling the office also will add some dollars to the Venice agency's coffers; the net effect of the deal "will probably be a wash, financially," but will benefit Chiat/Day/Mojo in the long term by solving the long-term strategic problem, Wolf said.

Wolf also says the selling off of the San Francisco office, which will adopt another name, is a "win-win" situation.

"Unlike a lot of agencies which have closed their San Francisco offices, leaving employees and clients high and dry, we think it's a more elegant way to not be in the San Francisco market," the Chiat/Day/Mojo chairman said.

People

Carol Stevens joined the PR agency Ruder Finn as a vice president to develop campaigns and supervise accounts in entertainment, leisure and communications. The one-time senior vice president at Rogers & Cowan returns to the agency business after a stint as vice president for publicity at Universal Studios in Florida . . . Hank Antosz and Richard O'Neill were promoted to senior vice president at Chiat/Day/Mojo. Pam Cunningham and Jerry Gentile were promoted to vice president at the agency . . . Sue Vlieger Kiersch was promoted to vice president and management supervisor at Dailey & Associates. Pat Garvey was named manager of sales promotion and Lisa German account supervisor for public relations at the agency.

Accounts

Carnation Co. named McCann-Erickson to handle its Buitoni brand and Dailey & Associates for its Libby canned meats and Contadina canned tomato products . . . The Phelps Group landed the advertising and public relations assignment for the USC/Kenneth Norris Jr. Cancer Hospital and Research Institute.

New ventures

Former Hill and Knowlton vice president Sandra Sternberg is on her own as Kramer Sternberg, a corporate communications and public relations firm in West Los Angeles.

Sternberg, who was director of corporate communications at Hill and Knowlton, says she'll specialize in investor relations, executive communications and business marketing.

Miscellany

Lucky for John Littlewood, chairman of Ayer's Los Angeles office, that the agency has remained downtown. Littlewood can pop right over to the L.A. Music Center Opera to fulfill his "tiny" role in the Music Center Opera's production of "Don Carlos." Littlewood plays a bishop, and he says the role allows him to "decompress from the wonderful absurdities" of advertising. The role also got him a small spotlight in the premier issue of a new magazine called Agency that's produced by the American Association of Advertising Agencies.

Bob Howard covers advertising, public relations and media in Los Angeles County.