Thoughts on 25 Years of Starting and Running an Advertising Agency

by Ernie Canadeo

It was the rockin' freewheeling days of the late 1970's/early 1980's when I worked in advertising at RCA Records...and my expense account was larger than my salary! When I would bring clients to Studio 54 and entertain them backstage at concerts. When wearing jeans and sneakers to work was way ahead of its time. But then I quit my job in 1985 to become Associate Publisher (and part owner) of an ill-fated magazine where my paychecks bounced and which folded after a few months. I was out of a job, and everything was so much different. As Bob Dylan wrote, “I was so much older then, I’m younger than that now.”

 

I made a choice not to return to RCA – although I was offered a new job there – because I left to start my own business, and felt cheated. I still wanted to give it a shot. So I started EGC in a spare bedroom of my recently mortgaged home as "EGC Enterprises", because I had no idea what I was going to do. I looked into selling mail order videos, or advertising premium items before I decided to do what I knew, and thus formed EGC Media Group, a media buying and production agency.

It took me nine months of running up credit card debt and a lot tears before I landed my first client, an auto and marine dealer with a budget of almost $1MM. I produced a TV commercial and placed media on the new and emerging medium of cable TV with good results. And, I hired my first two employees, one of whom stayed with me for 18 years before retiring. A few months later I beat the big agencies and landed the largest retail client in the NY region at that time, TSS Seedman's, because I knew how to raise co-op advertising funds from my experience at RCA. We did some terrific creative, and had the nerve to grossly exaggerate how large my firm was – my biggest fear was they would want to visit my office, which was in an industrial park with bars on the windows. But it worked and I was in business, placing $3MM in media and hiring half a dozen people in 1986. Finally, I bought a small house in Hicksville, which became our new office.

The first piece of bad advice I received when I expanded from media buying to print production was to not buy a Macintosh computer because the quality wasn’t good enough. So, I took out a $75,000 loan and purchased a used linotype machine, and a stat camera (complete with chemicals which had to be changed weekly), only to throw them out a year later and purchase a Mac IIx, a black and white printer, a black and white scanner and Quark software for $40,000.

 

Apple revolutionized the industry; and I learned not to listen to people who were afraid of change. Business was good throughout the 80's, and by 1990 EGC had about a dozen clients and ten employees. I always tried to create a “family” environment at the agency, and hired wonderful and talented people who worked hard and had passion for the business. But then the recession hit, and many of our retail clients went out of business. One of them, a local chain of video stores, was purchased by the then unknown Blockbuster Video, and our client got us in to pitch Blockbuster. We won the business and became their regional agency. We “grand opened” almost 200 Blockbuster locations in three years, handling all of their advertising needs. It got us through the bad years, and I decided to create a division, The Retail Marketing Group, to showcase our retail franchise marketing experience. We subsequently became the national sales promotion agency for Haagen Dazs Ice Cream, and did sales promotions for Shell Oil Company, KFC, and the NY Lottery. And while other firms were laying people off, we continued to grow, and moved to a larger house in Hicksville in 1994. We were named one of Long Island's Top 25 Fastest Growing Firms (five of six years from 1990-1996). We were winning a lot of creative awards, including the Advertising Campaign of the Year. And we were having fun.

It was around this time that the business changed dramatically, and like many companies, we needed to reinvent ourselves to survive. Due to economic challenges, the standard commission structure was changing to a less profitable fee-based compensation, and commissions were cut. Clients were moving away from a full service agency relationship and using several agencies for different specialized services. Many were creating their own in-house agencies. And the Internet was becoming a force that would change marketing forever.

 

We started an Interactive Division in 1997, with a separate office and staff dedicated to building websites. Clients wanted specialization; I'd give them specialization. Our Interactive Division grew nicely, we produced websites for current and new clients, and were very profitable until September 11th changed everything and business stopped. We subsequently folded the division into our main offices, but our early experience gave us the knowledge to be smarter than our competition and, as a result, we are now one of the most successful digital agencies in the region.

 

We purchased our own office building in Melville in 2005, and today our agency is filled with approximately 40 incredibly talented people who work in an environment that remains very creative yet professional. We provide marketing services for some of the country’s most prestigious brands, such as Brother International and Sterling Optical, as well as many wonderful local and regional clients. All are a pleasure to work with and we love the challenge of helping to make their businesses grow and their brands become more valuable.

 

Of course technology has changed dramatically in the past 25…15…five…even the past six months – and one of our biggest challenges is to integrate new technology and a new culture into our clients’ marketing strategies. And I'm proud to say that we have again stayed ahead of the competition by hiring the best people and retraining our existing employees to understand how the new media has transformed ours, and our clients’, businesses.

 

One of the most interesting things about growing a business is how the owner’s role changes. I am not as involved in the day-to-day operations as I once was (in the beginning I did it all), and while I still have strong relationships with our clients and maintain our financial health, I have become the agency’s "ambassador", which is the perfect role for me because I truly believe we have the best, most passionate and talented people who have the proven ability to help any business grow. They are doing it, and I love telling people about it.

 

So what are the most important things I’ve learned in 25 years of running a business? First is to delegate and hire the best people you can find, the ones who complement your skills and share the same passion for the business. And take care of them both financially and with enhancing their quality of life. Promote your company and network religiously in the right circles, because referrals are the lifeblood of new business. Force yourself to get up early to go to the breakfasts, and drag yourself after working ten hours to the evening events; it will pay off.

Give back as much of your time and resources as possible to causes you believe in and to people who may not be as fortunate as you. We have a budget line for charitable work and I make sure we meet or exceed it every year. Encourage your employees to do the same. Be a voracious reader; read industry publications as well as general news to be as smart as you can be. You want to be able to carry on an intelligent conversation with your employees and clients, as well as impressing anyone who may be a potential client.

Maintain the absolute best reputation in your industry. Treat everyone well. Be fair. And always do the right thing. Combine those traits, and you can’t help but be successful.

 

As we celebrate our 25th year, the most rewarding thing to me is that I am convinced that our best years are still ahead of us. Thank you to everyone who has made that possible.