Hal Riney & Partners Essay, Research Paper

Ownership/size/locations -

Hal Riney & Partners, Inc., one of the most famous privately-owned advertising agencies in San Francisco, CA, was founded in 1986 by chairman and CEO Hal P. Riney himself. With the branch office in Chicago, Hal Riney & Partners Heartland, reaches out to clients in different regions as well. Both San Francisco and Chicago offices employ a total number of approximately 350 employees.

Income/profitability -

As of July 1996, Hal Riney & Partners, Inc., had an approximate annual billings of $475 million. The breakdown of gross billings by media are as followes: Newspaper – $38 million; Business Publication – $4.75 million; Transit – $4.75 million; Outdoor advertising – $19 million; TV – $275.5 million; Radio – $42.7 million; Collateral – $9.5 million; Consumer publication – $57 million; and cable TV – $23.75 million. Nowadays, the average percentage of earning for advertising agencies is approximately between .05% to 1% of the total billings. With a billing of $475 million, it would be logical to assume that Hal Riney & Partners earns approximately $2.375 million to $4.75 million. With the acquisition of several new accounts including Acer Group and Sprint Spectrum, Hal Riney?s billing is now approaching $600 million.

Management Profiles -

The chairman and CEO of Hal Riney & Partners, Inc., is Mr. Hal Riney. There are over 30 Sr. VPs and VPs holding various positions at the San Francisco office alone. Some of the key personnel at the San Francisco office includes Vice Chairman – James Travis; Chief Financial Officer & Executive VP – Lyn Muegge; Executive VP & National Creative Director – Joe O?Neill; Executive VP, and Managing Director – David Verklin; Executive VP and Corporate Development – John Yost; and Creative Director – Gerald Andelin.

The Chicago office handles a set of different clients with its own different personnel such as Barray Krause – Executive V.P. and Managing Director; Jonathan Harries – Executive V.P. and Executive Creative Director; Catharine Gerber – Senior V.P. and Media Director; and Paul Janas – Senior V.P. and Creative Director. Hal Riney has recently added Scott Marshall as the president on his pay roll after several unsuccessful search for new partners. In the past 18 months, Hal Riney had also held conversations with Interpublic Group (who owns McCann-Erickson, Lintas, etc.) and W.Y. Choi (a majority owner of N.W. Ayer & Partners) in attempt to sale his agency.

Clients -

Hal Riney & Partners serves a variety of clients from auto maker to fast food restaurant. Current major clients include Acer Group, Alamo car rental company, Birkenstock, The Walt Disney Company, Cox California PCS, GM Electric vehicle, Public Broadcasting Service, See?s Candies, Inc., Kaiser Permanente, Saturn Corporation, Subway Restaurant, Mirage Resorts, Inc., The Good Guys!, Pharmative Corporation, The Stroh Brewery Co., Progressive Insurance, Crystal Geyser Water, Kinko?s Service Corporation, Sprint PCS (formerly known as Sprint Spectrum), and Serta, Inc.

Sprint PCS, a recently acquired client, has an estimated budget of $20 – $30 million. Hal Riney?s first responsibility is to build the brand personality and image advertising of Sprint?s wireless phone and communication services. The account is being overseen by Riney co-executive creative director Steve Sweitzer and creative director Dave O?Hare. Riney will also create regional print and radio ads to tie into Sprint?s retail alliance, Radio Shack.

In addition to Sprint PCS, Hal Riney is playing a very active role in Saturn Corporation?s launch in Japan with the seventh largest Japanese advertising agency, Daiichi Kikaku. Saturn?s goal is to be No. 1 in customer and dealer satisfaction.

Despite its success, HR&P had raised a rather controversial campaign in the past. It would only be fair to present some of the unsuccessful campaigns to achieve the objectivity of this assignment. One of those controversial ones was the Swedish Bikini Team for Old Milwaukee Beer in 1992. The campaign was charged and accused of being sexist by native Swedish and various feminist groups in the US. HR&P withdrew the campaign and later resigned the account.

Corporate/Creative Philosophy -

Hal Riney has a special way to ?talk to? the American people. He has a unique way to profile people and make them seem real, thus give them credibility. His voice was featured at several commercials such as the Bank of America advertisement and the KQED Channel 9 in San Francisco. According to Michele Kirk, the creative director at Macy?s Advertising, Hal Riney won?t pick up a client that he has no faith in. His ads often give the audience a warm and fuzzy feeling similar to the ?feel-good? ads for Ronald Regan presidential election in 1984.

The agency has recently revamped the creative department to expand the number of creative brains available to work on each account and new business pitch. Under the new construction, creative directors can pull any staff member in the creative pool to work on any account on an as needed basis. Previously, each creative team worked exclusively on two or three accounts. The team approach eliminates all the hierarchy in the creative process thus the creative team helps to get work approved quickly and efficiently.

In addition to the reconstruction of his creative department, Hal Riney has his own corporate philosophy. Riney believes the client?s relationship with an agency is like a marriage. He believes the problems don?t get solved by being ignored. They have to be raised and discussed. The ones who work through problems will become stronger for the experience. In other words, if the agency were a person, which would you encourage your daughter to marry?

Successful Campaigns -

Hal Riney?s successful, ?the Saturn Family,? campaign began in 1990 by focusing on the Saturn?s employees who work in Spring Hill, Tennessee. For the past two years, the campaign has focused in on the customers – giving the consumers a sense of who the people are, what they do for living or for fun, and how they feel about Saturn cars. The campaign has boosted Saturn sales of more than 20 percent from 1992 to 1994, as well as the establishment of brand personality. The campaign promotes a homespun portraits of the people, not the cars. One of the recent ?Saturn Family? ads featured hundreds of Saturn volunteers building thousands of dollars worth of playground equipment in 12 sites around New York. This ?family? campaign has been going on for over five years, and it is likely the campaign will remain the same. There is no reason to change a campaign when it is effectively reaching the audience.

Aside from Hal Riney?s media use, he was also a member of the creative & political team who created the ?feel-good? commercials for Ronald Reagan in 1984. It is hard to determine how ?good? of a president Reagan was, but the campaign did bring victory to Reagan in 1984 in the presidential election. However, when the Reform Party presidential candidate, Ross Perot, asked Riney for an official campaign role, Riney denied the offer. Regardless what Riney did in 1992, his ?feel-good? campaign for Reagan was a proven success.

New Business wins/losses -

HR&P?s headquarters office in San Francisco has lost some of its luster in the past two years or so, while its Chicago?s office has done well with new business wins. Recent loss of accounts include Peets Coffee & Tea Co., Eddie Bauer, Inc., and Aspen Skiing Co., all with a $5 million in billings. HR&P also lost the $25 million First Interstate Bank account after Wells Fargo?s buyout of F.I. Bank.

On the bright side, HR&P Heartland is continuing its business with Kinko Corporation, the nation?s largest chain of document production and business service stores, after a four month agency review. Plus, not to mention First Union Corporation, with an expected billings of $30 million, named Hal Riney & Partners as its new corporate advertising agency. HR&P will be responsible in producing and developing campaigns to promote the financial services company and the expanding lines of business.

HR&P also added Acer America Corporation, a computer company, on its account list. The advertising agency?s main goal is to raise brand awareness among consumers. Its solution is a witty campaign far removed from the tech-and-spec approach of most computer advertising. Skyy Spirits Inc. as well awarded HR&P, San Francisco, a $5 million account, to handle advertising for brands like Skyy Vodka, which was previously handled by Monte Sandy & Needham Advertising in Walnut Creek, CA.

Other new acquisition includes Sprint Spectrum with an expected billings of $80 million, Cox California PCS and GM Electric Vehicle with estimated billings of $25 million respectively. Subway Franchise Advertising Board also retains its five-year partner, HR&P/Heartland, to handle its advertising with an estimated billings at $85 million after a few months of review.

Special Capabilities –

HR&P, Inc. specializes in brand building. A success example of its brand building capability is Saturn Corporation – the homespun feeling. Mr. Riney knows what his clients want and like. Hal Riney?s ability to talk to the American people and his ability to talk to the ?lower denominator? of the society have won him several accounts as well as keeping them. Hal Riney has been wanting to retire and to sell off his agency for a few years, but his clients threaten to withdraw their accounts if he quits. I believe his ability to cope with clients and the general public have enabled him to stay in business since the opening of HR&P in 1986.

Primary Competitors –

In a recent sales pitch with Subway Restaurant, HR&P was one of the three finalists who competed for the account. The other finalists included New York based agencies – Deutsch Inc.; Devito/Verdi; and Partners & Shevack. Riney was awarded the account after a lengthy agency review. HR&P was also competing with two other agencies, Lois/EJL Advertising and Mendelson/Zien Advertising, in the Los Angeles area for the $25 million Cox California PCS, a unit of Cox Communication, Inc., account.

It is hard to identify the primary competitors for HR&P since most advertising agencies are competing with one another to an extent. For instance, HR&P recently won the $5 million Skyy Spirits Inc. account from Monte Sandy & Needham Advertising. MS&A Advertising is a small agency with only 14 employees based in Walnut Creek, CA. Just a month ago, Hal Riney was competing against several San Francisco agencies such as Atlas & Co., Black Rocket, Team One Advertising and Citron Haligman Bedecarre for the $7 million Powerfood (PowerBar) account. The size of the competing agencies for Powerfood ranged from 10 employees (Atlas & Co.) to 200 employees (Team One Advertising, a sub-division of Satchi & Satchi). Thus, it is hard to identify who the main competitors are based on the billings and the size of the agency.