Date: August 7, 1998
From the print edition of CityBusiness
Net profits anticipating trends in the advertising industry, from integration to the internet, has paid off quite well for Risdall
Tim J. Johnson Staff Reporter
Skeptics have been questioning the profitability of the Internet since its inception. "Sure," they reason, "It looks really neat and the folks in marketing are excited, but can you make money with it?"
John Risdall, chairman at New Brighton-based Risdall Advertising, says yes.
His agency started aggressively pursuing Internet business well before other local agencies, and it's seen explosive growth in the past year largely due to its clients advertising on the 'Net.
While others question the Web's profitability, Risdall cites example after example in which clients have increased sales because of it, in a much cheaper way than traditional advertising efforts. "It's not just a pretty picture. We figure out a reason why they should be on there, and how to make money," he said. "We were able to figure it out. We knew what it was going to be."
The Internet has certainly been a boon for the agency, which now generates a third of its billings from the new medium. And it's seen its capitalized billings -- the amount of money clients spend on advertising, including media placement -- jump from $39 million in 1996 to $51 million in 1997. Risdall expects to hit $60 million this year, and says the company can hit $100 million in three years.
The amount the company generates in straight revenue is roughly a seventh of billings, or about $8.5 million this year. Employees have grown from 28 in 1996 to 39 in 1997, to about 40 now. Much of that growth has come recently: The agency hired 11 people in the last 11 weeks of 1997, and it recently added three new Webmasters.
The recent growth spurt is in stark contrast to its first decade of existence. The agency led a comfortable life with a solid base of clients, but its growth was glacial. "One day I woke up and decided I didn't like what was going on," he recalls of a day in 1982. "I'm in charge of all these things ... why are they pissing me off?"
Good question. "You need to have a goal and a vision and a focus. I don't think I did," he says. "I was just getting by."
He poured his energy into his business, and cited the hiring of Neal Linnihan in 1984 as a sort of turning point. Linnihan, who specializes in environmental clients, was named president and became a partner in 1993.
The firm has about 120 clients, none of which accounts for more than 10 percent of revenue. That creates a buffer from client losses that frequently rock smaller agencies. Risdall recalls a conversation with another ad exec who fretted about firing employees after a client departure.
"I thought, `When did I lose 10 to 20 percent of my business?' In 25 years, it's never happened," he said.
Risdall likes to point out that his agency, started by himself in 1972, was an integrated, full-service firm well before the concept caught on with other agencies. It offers clients a range of services in advertising, marketing, promotions, marketing research, corporate identity and public relations.
And while most agencies relish their cutting-edge image and high-profile consumer accounts, Risdall and partner Linnihan dote on what others see as ho-hum clients: manufacturers, industrial companies and high-tech firms.
The high-tech niche makes sense, says Risdall. "All of it's new, and all of it has to be introduced," he said.
It also provides a natural entree into the interactive business. According to InterMedia Advertising Solutions in New York, the computer and software industry accounts for 50 percent of all ad spending on the Internet.
Not only are these firms comfortable with the technology, they're also believers, notes Rick Krueger of the Minnesota High-Tech Association. "They're looking at the marketing potential, and the marketing projections are phenomenal."
Despite agency growth, Risdall acknowledges that a 10- to 12- person shop had its advantages. "It had more of a feeling of a family, now it's more of a business. You lose some of the closeness that you felt."
That's not to say he regrets it. Growing bigger affords more resources and allows it to branch into different areas of work. "Doing bigger and better has its own rewards."
For more information, contact:
Tim J. Johnson Staff Reporter
Skeptics have been questioning the profitability of the Internet since its inception. "Sure," they reason, "It looks really neat and the folks in marketing are excited, but can you make money with it?"
John Risdall, chairman at New Brighton-based Risdall Advertising, says yes.
His agency started aggressively pursuing Internet business well before other local agencies, and it's seen explosive growth in the past year largely due to its clients advertising on the 'Net.
While others question the Web's profitability, Risdall cites example after example in which clients have increased sales because of it, in a much cheaper way than traditional advertising efforts. "It's not just a pretty picture. We figure out a reason why they should be on there, and how to make money," he said. "We were able to figure it out. We knew what it was going to be."
The Internet has certainly been a boon for the agency, which now generates a third of its billings from the new medium. And it's seen its capitalized billings -- the amount of money clients spend on advertising, including media placement -- jump from $39 million in 1996 to $51 million in 1997. Risdall expects to hit $60 million this year, and says the company can hit $100 million in three years.
The amount the company generates in straight revenue is roughly a seventh of billings, or about $8.5 million this year. Employees have grown from 28 in 1996 to 39 in 1997, to about 40 now. Much of that growth has come recently: The agency hired 11 people in the last 11 weeks of 1997, and it recently added three new Webmasters.
The recent growth spurt is in stark contrast to its first decade of existence. The agency led a comfortable life with a solid base of clients, but its growth was glacial. "One day I woke up and decided I didn't like what was going on," he recalls of a day in 1982. "I'm in charge of all these things ... why are they pissing me off?"
Good question. "You need to have a goal and a vision and a focus. I don't think I did," he says. "I was just getting by."
He poured his energy into his business, and cited the hiring of Neal Linnihan in 1984 as a sort of turning point. Linnihan, who specializes in environmental clients, was named president and became a partner in 1993.
The firm has about 120 clients, none of which accounts for more than 10 percent of revenue. That creates a buffer from client losses that frequently rock smaller agencies. Risdall recalls a conversation with another ad exec who fretted about firing employees after a client departure.
"I thought, `When did I lose 10 to 20 percent of my business?' In 25 years, it's never happened," he said.
Risdall likes to point out that his agency, started by himself in 1972, was an integrated, full-service firm well before the concept caught on with other agencies. It offers clients a range of services in advertising, marketing, promotions, marketing research, corporate identity and public relations.
And while most agencies relish their cutting-edge image and high-profile consumer accounts, Risdall and partner Linnihan dote on what others see as ho-hum clients: manufacturers, industrial companies and high-tech firms.
The high-tech niche makes sense, says Risdall. "All of it's new, and all of it has to be introduced," he said.
It also provides a natural entree into the interactive business. According to InterMedia Advertising Solutions in New York, the computer and software industry accounts for 50 percent of all ad spending on the Internet.
Not only are these firms comfortable with the technology, they're also believers, notes Rick Krueger of the Minnesota High-Tech Association. "They're looking at the marketing potential, and the marketing projections are phenomenal."
Despite agency growth, Risdall acknowledges that a 10- to 12- person shop had its advantages. "It had more of a feeling of a family, now it's more of a business. You lose some of the closeness that you felt."
That's not to say he regrets it. Growing bigger affords more resources and allows it to branch into different areas of work. "Doing bigger and better has its own rewards."
For more information, contact:
| John Risdall | or Michelle Vandesteeg |
| Chairman and Chief Executive Officer | Vice President, Account Supervisor |
| Risdall Advertising | 651.631.1098 (tel) 651.631.2561 (fax) |
| 550 Main Street | |
| New Brighton, Minnesota 55112 | www.risdall.com or www.risdall.net (web) |