Building reputations

Agencies' attitudes to setting up shop anywhere beyond Soho or Covent Garden have changed radically. But the right location and offices can still speak volumes to clients.

Fallon...new office in 'Noho'
Fallon...new office in 'Noho'

Take a photographic tour of the new offices of Fallon, Engine and Karmarama: Grand designs in adland

Adam & Eve's first home isn't exactly the Garden of Eden.

The year's most talked-about start-up has begun life in a dowdy 60s block above a car-park in London's Upper St Martin's Lane that throbs to the sound of heavy drills flattening a nearby redevelopment area.

In a year's time, the agency's offices will also have been reduced to rubble. But they'll have served their purpose.

The short-term lease, agreed on highly favourable terms, has enabled Adam & Eve to find its feet while keeping overheads to a minimum.

If all goes well, it will, by that time, have moved somewhere less deafening for its 17-strong staff, and more welcoming for its first clients.

But where? Certainly not Victoria or Holborn, which are still deemed much too dull by most agencies.

The up-and-coming East London, with its competitive rents and good supply of warehouse-type buildings and where Mother and Wieden & Kennedy have set up shop, could be a more attractive prospect. Or maybe out West, where Leo Burnett and Karmarama reside.

And what about the area north of Oxford Street - dubbed "Noho" - where Fallon, McCann Erickson, TBWA\London, CHI & Partners, Miles Calcraft Briginshaw Duffy, Saatchi & Saatchi and Engine are to be found?

The area not only offers the square footage many agencies need, but a central location, good shops and restaurants, and rents significantly cheaper than Mayfair.

Chances are it won't be Soho or Covent Garden, where the lack of large spaces and generally higher rents is causing agencies to forsake their spiritual home in ever increasing numbers.

Meanwhile, improving digital communications has obviated the need ?for agencies to live cheek by jowl ?with post-production houses.

"We love Soho and so do our clients, but agencies in general have become less precious about it," Laurence Green, Fallon's chairman, says.

The prospect of far better deals (CHI is paying £14 per square foot in "Noho", four times less than Soho's going rate) is also fuelling the exodus.

Indeed, it remains to be seen how long landlords around Soho and Covent Garden can sustain an uncompromising stance in the face of a collapsing property market.

The boss of one top 20 agency found his landlord a model of sweet reasonableness when, with the agency's lease soon to expire, he began exploring alternatives.

Nevertheless, deciding on a home is a hellishly difficult call for an agency chief, who must weigh his or her ?current requirements against future business prospects.

It's a decision that can have profound implications. Ogilvy & Mather still rues its move to Docklands in 1991 in order to escape rocketing West End rents and to found a new agency community that never happened.

Staff and clients have consistently detested the location in equal measure ever since.

"It had an enormous effect on our business and meant that we lost a lot of good potential recruits," Patrick Collister, the agency's former creative chief, remembers.

"Our production people were spending three hours a day travelling to and from Central London. Our Kraft clients hated the place so much that they insisted on meeting at JWT. It was humiliating."

"If you're a small agency, picking a property is among the biggest business decisions you're likely to make," James Murphy, one of the Adam & Eve founders, says. "It's something you're strapped to and it's probably your biggest fixed cost."

The consolidation of the agency business has left only the major holding companies capable of investing in and managing a property portfolio.

This invariably means that network offices have much less autonomy than before when it comes to finding a new home. Their New York- or Paris-based parent will often want to shoehorn them into property they already possess rather than rent more space.

Bob Willott, the editor of Marketing Services Financial Intelligence, says: "It's possible that some agencies outside London, where property can be a good investment, own their buildings. In London, property is just too expensive."

Tom Knox is the deputy chairman of Delaney Lund Knox Warren & Partners, which has occupied its modest Covent Garden offices through various incarnations for almost 20 years.

"Property deals take up a lot of management time and take agencies into areas where they don't have expertise," he points out. "It can become very distracting and diverts you from looking after your clients."

Johnny Hornby, a CHI founding partner, recalls being warned by Charles Dunstone, boss of the Carphone Warehouse and one of its first clients, never to get into the property business - and he never has.

"There's always a risk you become too large or too small for the building you have," he explains. "Whatever happens, that property has to be managed. And there's a danger that if you're both the landlord and tenant you treat yourself too generously."

The other factors influencing the choice of building reflect the changing ways agencies want to think and work, how to better stimulate their staff and how to forge a more collaborative relationship with clients.

Charles Okin is a chartered surveyor at Edward Charles & Partners. He believes the less hierarchical structures within most agencies have led to demands for buildings that can be easily adapted for open-plan.

At the same time, agencies are eager for more space for meetings with clients and space which clients themselves can use for meetings of their own.

"Agencies really fill up their buildings," Okin adds. "Only the financial sector matches them for such intense use of space."

"The past ten years have been a  more collaborative era," Green says. "Clients are no longer coming in just to be sold work, they're helping to build it. There's a different ethic so it makes sense to build these needs into your space when you move."

For their part, clients expect their agencies' characters to be mirrored by their working environments, but not to go over the top.

Peter Buchanan, COI's deputy chief executive, says: "They should be buzzy places and I'd be concerned if they looked too quiet. I accept that image is important to agencies, but it's important they avoid ostentation. Comfort combined with efficiency is key."
Take a photographic tour of the new offices of Fallon, Engine and Karmarama