Insurance and Tourism & Hospitality and Media & Marketing

State bundles media buying: Firms here question whether small Fort Wayne-based agency can handle $10M contract

August 15, 2005

In a move that has rankled some central Indiana advertising agencies, Gov. Mitch Daniels' office this month awarded a $10 million-$12 million media buying contract encompassing all state agencies to Fort Wayne-based Asher Agency.

Asher in turn promised to save the state $900,000 in the coming year.

The contract, a one-year deal with a oneyear renewal option, calls for Asher to place television, radio, print and outdoor advertising for the Hoosier Lottery, Indiana State Fair, Indiana Criminal Justice Institute, Office of Tourism and Development, Department of Insurance, Department of Revenue, Indiana Tobacco and Cessation and Family and Social Services Administration.

"No question, this is the biggest contract we've won," said Asher Agency President Tom Borne.

Borne said his firm, which has 25 employees in offices in Fort Wayne and Lexington, Ky., would be adding three or four more to handle the account.

But some Indianapolis agencies questioned whether Asher has the manpower or statewide clout to handle such a large piece of business. Many of Indianapolis' largest ad agencies and media buyers also went after the state contract.

"It's very surprising a small agency with very little media buying capability could win an account of this size," said Roman Brand Group Chairman Dan Roman. "That's kind of strange. I think you lose a lot of clout going with an agency like this."

This is the first time Indiana has bundled media buying for all its departments, but similar initiatives have been launched in Kentucky and California. Previously, one firm worked with each state department.

Roman Brand Group, for instance, handled the Hoosier Lottery's media buying and creative content for the last seven years. Roman Brand still handles the creative, but lottery officials said that work will be re-bid this month.

Perkins Nichols Media was second in the bidding for the consolidated state account, said company president Bill Perkins, who handled media buying statewide for Daniels' gubernatorial campaign.

"The difficulty is, we know this state and this account," Perkins said. "Of course we're disappointed. That would have been a big piece of business."

Perkins said Asher underbid his firm significantly, and he questions their ability to deliver such savings.

"We were going to dedicate six people to this account," Perkins said. "Asher will put two people on this account."

Borne scoffed at such criticism.

"We've been doing this a long, long time," said Borne, whose brother Tim founded the company in 1974. "There's no doubt we have the talented people to do this. We know the state from a media-buying perspective as much as anyone."

Borne pointed out that Asher has done statewide work for several clients, including Subway sandwich shops and Ivy Tech State College. But he conceded those efforts were smaller than the state account.

"One of the reasons why [state officials] chose us was their comfort with our ability to buy statewide," Borne said.

Officials in Daniels' office declined to comment, saying the contract was not finalized as of Aug. 10. Asher officials, on the other hand, said the deal is done. In fact, they made a $1.5 million media buy Aug. 9 for the Indiana Department of Revenue.

"Consolidating the media buying for the Lottery and other state agencies should provide quite a savings," said Hoosier Lottery Executive Director Esther Schneider. "The commission on media placement for the individual departments has been 15 percent and now it's going to be 2-1/2 [percent] to 3 percent. This is all part of the governor's strategy to save money and be more efficient."

Though Asher currently has no Indianapolis office, the company had a sizable presence here in the 1990s. Asher's Indianapolis division was later bought by Evans Group, which was acquired by Paris-based Publicis Group. Borne pointed out that Asher did considerable work for Simon Property Group and other notable companies during its stint in Indianapolis.

"We still have people in Indianapolis every day of the week," Borne said. "We just don't feel the need to have an office there."

Tom Hirschauer, president and general manager of Publicis' Indianapolis office, said most of the comments from Indianapolis firms concerning Asher is typical rhetoric from agencies who lost a bid.

Hirschauer, who worked with the Borne brothers in their Indianapolis division, said Publicis looked at the state account, but couldn't make it work financially at the commissions Asher agreed to. Still, he remains confident in the Bornes.

"They're extremely good businessmen who know how to run an agency," Hirschauer said.

Making long-term media buying deals and keeping man-hours on the account to a minimum will be critical for Asher, he added.

"I'm sure they figured out a business model that allowed them to make money and the state to save money," Hirschauer said. "They're very good at cutting the numbers every which way.

"I'm not upset a firm outside Indianapolis was chosen. The most important thing is that a firm within Indiana was chosen. If a firm demonstrates the business acumen and media buying ability to work statewide, they deserve the account."
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