Eugene Morris’ firm was nearing death’s door. Billings at Chicago-based E. Morris Communications Inc. had plummeted 41.6% to $18.7 million in 2002, causing the company to fall off the BE ADVERTISING AGENCIES list. Making matters worse, automaker GM retired its Oldsmobile division, which represented 40% of the firm’s business. As EMC hemorrhaged clients and sank deep in the red, nearly half of the firm’s employees had to be let go.
Some entrepreneurs might have called it quits. Some might have given in to the trend to sell or partner with a general-market agency. But 65-year-old Morris chose another route. He spent the next two years scraping and clawing his way back into the black and back — after a one year hiatus — onto the BE 100S. He did this by landing new clients, keeping a tight lid on the company’s books, and, most significantly, building new business with existing clients to get a bigger slice of their advertising dollars. From 2003 to 2004 billings rebounded to the tune of 38% — despite continued weakness in the industry.
Morris’ work is far from over though. In addition to growing his own business, he is positioning himself as an agent of change by leading the charge to form the Association of Black-Owned Advertising Agencies Inc. The organization, composed of 10 advertising agencies and marketing communication firms, hopes to leverage their collective power to further their success in the advertising industry.
For turning his company around, repositioning it to play in the general market by handling a range of high-quality public relations, advertising, and marketing assignments, Morris demonstrates the true spirit of entrepreneurship, earning EMC the distinction of the 2005 BLACK ENTERPRISE Advertising Agency of the Year.
LOOKING WITHIN
Success is often a rocky road and it doesn’t get much bumpier than EMC’s. GM’s decision to abandon its Oldsmobile line left EMC in a serious bind. “It’s hard to replace 40% of your business. Not only did we lose our largest client, but we lost some smaller clients — so we basically lost over 50% of our business,” says Morris. In the African American marketing segment, hard times always “weed out the pretenders,” he says. “When times get tough you know the people who said they had a black commitment are going to be gone, and we had a couple of clients like that.” Then, with clients jumping ship, 9-11 came along, which had a devastating impact on EMC.
With layoffs looming, things looked down, but Morris was not out. “On a business level, I’ve never had to do anything as painful as cut 25 people. In a business this small, you know how many kids they have, whether they are a single mother … that’s heart wrenching,” says Morris. “I didn’t have a good night’s sleep for months knowing that I had to reduce the staff. I kept thinking maybe something will happen, let’s wait; I waited a lot longer than I should have.”
Fortunately, cost controls and other financial measures helped the company stay afloat without having to sell or seek out a partner. “[EMC] can pride itself on the fact that our financial systems allow us to track our financial position so we’re not spending money that’s not ours,” says Ernest L. Baker, senior vice-president and chief financial officer. “So when I looked at the situation and saw how much our revenues were cut, I wanted to make an equivalent cut in our expenses.” EMC was able to delay downsizing because it had enough retained earnings for at least six months, which was much more than the industry standard of two months.
At a time when many companies would have shut their door, Morris says, “That would have been the worst time to get out,” he says. “It would have meant getting out under stress and duress. [Instead], the first thing I thought about was how to replace this revenue as quickly as possible; second, to come up with a strategy to keep us afloat until we do; and third, to deal with the strategy so that we can survive it.”
Initially, the company planned to focus on attracting new business. But in the post 9-11 business downturn, Morris decided to grow organically and develop more business with existing clients, which turned out to be the right move during a troubled economy. EMC built on its working relationships with firms like Wal-Mart, Tyson Foods, and American Family Insurance, which paid off. The company came back to life, not by looking to become the largest advertising agency, but the best. “I wanted an agency that focuses on creativity, but is also a well-run business that nurtures and respects its people,” says Morris.
At first, EMC only did
creative compaigns for American Family Insurance, which included newspaper, magazine, outdoor, transit, and radio work, but more recently their duties have expanded to include media planning and placement. “The agency, and Gene, had extensive knowledge, skill, and experience in marketing to multicultural audiences across all media,” says Annette Knapstein, American Family Insurance’s director of integrated marketing communications. EMC’s American Family campaigns range from products, such as homeowners’ and auto insurance, to commemorative/event advertising that speaks to the African American, Asian, and Hispanic markets.The “Powered By” Tyson Foods campaign is one of its creative standouts. A fully integrated marketing blitz, “Powered By” included public relations, advertising, TV, radio, sales promotion, and community relations outlets. “The concept behind it was based on the idea that protein itself gives you more energy,” explains Morris. “[Tyson is] the largest producer of protein, so one of our charges was to communicate that Tyson is not just chicken, but protein. The consumption of protein gives you the power to get through the day.”
Tyson is pleased with the campaign. “EMC is very well-grounded in the African American market and they worked on that for us. Everybody was in it from the beginning. [Gene] has been around the block a few times, so he has a wealth of experience,” explains Bob Corscadden, chief marketing officer for Tyson, which has been an EMC client for two years. “He’s done a great job working with our team and the senior management. Gene takes the time to listen and understand the client’s needs.”
WORKING ON THE HIGHWAY
One challenge that Morris has met head-on is the hotly disputed $600 million Dan Ryan Expressway reconstruction project. The expressway is a major transportation artery from downtown Chicago through the heart of the city’s South Side in predominantly African American neighborhoods. Residents are concerned that the pending reconstruction will close streets and ramps, and that the community might not receive its fair share of jobs and contracting opportunities.
The Illinois Department of Transportation initially hired another advertising agency to handle the PR nightmare, but it failed, says Robin Black, chief of staff. “Prior to E. Morris, we hadn’t had another firm with as much of a relationship in the minority community nor a background in marketing diverse messages,” Black recalls.
When state officials opened up the bidding process to replace the old firm, EMC’s presentation
wowed them. “Eugene has a dynamic team and we saw how they worked together during the presentation, which was visually stimulating, colorful, and very well packaged,” Black says. “So I could tell that they had the capacity and the capability to take on a $600 million infrastructure project.”EMC got right to work. First was a series of local print advertisements that were not only slick and sharp, but informative. The ads explained the goal of the project as well as what would or would not be affected by construction. Then EMC launched radio ads, a direct-mail campaign with quarterly newsletters, and a series of commun
ity events, including an information fair where construction leaders met with community members to allay their concerns. The results were overwhelmingly positive. “The people are talking,” says Black. “The legislators that represented Dan Ryan are impressed by the sheer volume of mailings they are receiving.
REPAIRING A RETAILER
EMC’s ability to talk to a target audience was key to the expressway campaign, and to the company’s overall success. “Our job is to focus on the target audience and to know them as well as we can,” says Deborah Gray-Young, vice president and director of media and strategic services. The company conducts focus groups to pinpoint its target audience, and crafts discussion guides and questionnaires to learn everything it can about it.
To optimize impact in the black marketplace, EMC also employs proprietary tools such as AATLAS, (African American Targeted Lifestyle and Attitude Segments), a qualitative and quantitative method of analyzing the behavior of consumers across various demographics. “One of the things that AATLAS seeks to do is to understand the life stages as well as the lifestyles [of the target audience],” says Gray-Young. “It helps us, and therefore the client, understand how the message should be crafted.”
EMC will need all the tools it has as it faces another challenge — mending the tarnished reputation of the world’s largest retailer, Wal-Mart. The retail giant has been hit with dozens of lawsuits alleging sexual discrimination and unfair pay practices, and recently settled charges concerning contracting illegal alien workers. The company also continues to face opposition from community groups when it tries to open stores in cities and towns.
Morris feels his firm is up to the challenge of revamping Wal-Mart’s image in minority communities. One of EMC’s first moves
was to develop the documentary, The Invisible Men of Honor: The Story of the Buffalo Soldiers, which retells the story of the first African Americans recruited into a peacetime army. The documentary was promoted in all 3,000 Wal-Mart stores.EMC also gave Wal-Mart a human face with ad campaigns that show employees as regular folks with positive experiences working at Wal-Mart. One advertisement featured a Wal-Mart jewelry department clerk who also volunteered as a Big Sister. “The ad resonated that the reason why Wal-Mart people are so good is, not only do they take care of you when you are there, but they take care of the community too,” says Morris. “We have always tried to demonstrate that [Wal-Mart employees] are real people just like you and me. It’s not just this company with 1 million workers, but is made up of people one by one.”
BACK IN THE BLACK
Now that he’s turned his company around and positioned it for the long haul, Morris can breathe a sigh of relief. The friendly, yet firm and detailed CEO is talkative as he sits back on his green leather executive chair to discuss the business he has loved for the past 37 years. “We always said that in order to have an effective message it has to be the kind that has relevance, that doesn’t just operate on the surface. It’s really got to penetrate your mind, your soul,” says Morris.
Conversation is often cut short by constant telephone calls, or EMC staff flitting around the office creating new imagery for its clients. Morris has built a black advertising agency that speaks to the black audience and he’s unapologetic about that. “Other people used to define our images. Now I’m in a business to have a say in the images that are developed for our people, so I want to make sure those images are relevant and presented in a positive way,” he says.
Morris’ work is far from finished. EMC is gearing up for growth — albeit selectively. Although he doesn’t mention which new businesses the company is going after, one thing is certain: “I’m not interested in being the biggest, I’m interested in being among the best. And it’s not what you bring in on the top, it’s how much you’ve got on the bottom that really counts.”