The San Francisco ad market is well-known, even notorious, for its continual ups and downs, rising and falling with both the economy and the state of the technology industry. The highs and lows have been particularly pronounced since the mid-1990s, as agencies benefited mightily from the dot-com boom, then tried to survive the debacle of the subsequent bust. If they made it through, they were left to figure out their place in a landscape increasingly dominated by digital powerhouses like Facebook and Google.

“It’s been the most interesting ad market in the country in the last 15 years, going through a lot of metamorphoses,” said Amy Hoover, president at Talent Zoo in Atlanta, which specializes in recruiting employees for agencies in advertising, public relations and social media.

After the dot-com bust, “we were overwhelmed with calls from people saying, ‘I came in on Monday and the office was closed,’ ” Ms. Hoover said. “As the tech sector rebuilt itself, you started to see shops popping up and, as digital exploded again, it’s been this Wild West recently.”

Almost all the start-ups have involved executives who were already working in the market. One, to be announced on Tuesday, also includes an agency holding company, Project WorldWide, based in the Detroit suburb of Auburn Hills, Mich., which is making a bet on the market’s viability by bankrolling the start-up of a San Francisco agency named Argonaut.

(The Argonaut name seems to be part of a pattern of offbeat nomenclature in the San Francisco market that also includes agencies like Cutwater, Dojo, Eleven, Mekanism, Odopod, Sequence, Signal to Noise and AKQA, for “all known questions answered.”)

“The Bay Area is quite vibrant these days,” said Robert G. Vallee Jr., chairman and chief executive at Project WorldWide. “There’s a lot of opportunity out there.”

Agencies in San Francisco are benefiting from a trend in which marketers that once used only agencies with which they had defined relationships on accounts — agencies of record, in industry parlance — are handing out creative assignments to other shops, Mr. Vallee said.

Ms. Hoover identified another trend: The San Francisco ad market is being influenced by the entrepreneurial spirit of nearby Silicon Valley as agency employees are inspired to go into business for themselves with “a lot of breakoffs, guys starting their own thing.”

That describes some of the six founders of Argonaut, among them the co-chief creative officers, Rick Condos and Hunter Hindman, who worked as a creative team at perhaps the most prominent agency in San Francisco, Goodby, Silverstein Partners, part of the Omnicom Group; Max Heilbron, the head of strategy, who had been group brand strategy director at Goodby, Silverstein; and Robbie Whiting, the head of creative technology and production, who had been head of creative technology at another well-regarded local agency, Duncan/Channon.

“We’re taking a lot of inspiration from the San Francisco kind of start-up mentality,” Mr. Hindman said. “We want to be agile, act quick and be artful.”

Jordan Warren, the president of Argonaut, said he believed the San Francisco ad market has been “coming back, and coming back in the right way.”

“It’s not about chasing fads and buying the hype” this time around, said Mr. Warren, who has spent 20 years in leadership posts at local agencies like Eleven and Signal to Noise. “It’s about people getting their hands dirty and building sustainable things, delivering value.”

The sixth principal of Argonaut, Conal O’ Doherty, whose title is head of growth, has worked at agencies in San Francisco as well as markets like Barcelona, Spain.

The ad business in San Francisco “has a long history of iconoclastic personalities,” said Courtney Buechert, chief executive at Eleven, which opened in 1999. That has helped “make the market independent and inherently entrepreneurial,” he said.

He cited figures like Howard Gossage, who was an early proponent of Marshall McLuhan and green marketing, and Hal Riney, whose agency, Hal Riney Partners, is now Publicis Hal Riney, part of the Publicis Groupe.

“The dot-com boom was crazy; I don’t think anyone had seen anything like it since the Gold Rush,” Mr. Buechert said. “But since then, there have been different kinds of agencies growing, thriving here, agencies that have enjoyed the true benefit of the new technology, accountability, which has made them more metrics-centric, concerned about results, and media-agnostic, interested in new things like social media and not just advertising.”

There is even a new agency in the market that is wearing its heart on its sleeve by including the letters “SF” in its name.

“I’m not sure many people start agencies with the initials of the city,” said Jamie Barrett, a partner at BarrettSF. In May, he left Goodby, Silverstein, where he had been partner and executive creative director, to start the agency with Patrick Kelly, another former executive at Goodby, Silverstein.

“We are proud of the market and excited about the market,” said Mr. Barrett, whose fledgling shop has two clients, the California Redwood Association and the Pacific-12 Networks. He and Mr. Kelly are bringing in a third partner, Pete Harvey, who also joins from Goodby, Silverstein.

“There’s almost no better place to be” than the San Francisco market, because of the proximity to Silicon Valley, said Mr. Harvey, who has also worked in cities like Boston and Los Angeles.

“You get people knocking on the door with wild ideas,” he added, “which inspires you to make your own business a little more innovative and interesting.”

Article source: http://www.nytimes.com/2013/03/05/business/media/in-san-francisco-a-thriving-advertising-agency-start-up-scene.html?partner=rss&emc=rss