Merger Pays Off for Thompson Murray

Mike Thompson saw his advertising agency’s business drop considerably in 1998 when the trucking industry fell on tough times.

The agency, Thompson Earnhart & Associates of Fayetteville, received the majority of its revenue by helping trucking companies recruit drivers. The trucking industry accounted for about $2 million of Thompson Earnhart’s business in 1997. A year later, that amount had dropped to $750,000.

USA Truck of Fort Smith, Charger of Springdale and Trism of Atlanta had all cut back on the amount of business they were doing with the agency. As a result, Thompson Earnhart laid off eight of the company’s 18 employees.

Then Thompson’s business partner, Kristen Earnhart, left the agency to pursue a doctorate at the University of Texas. Thompson and Earnhart had started the agency only three years earlier, in 1995, operating out of Thompson’s house. They were both in their mid-20s at the time.

Thompson regrouped and merged in June 1999 with BrandWorks Consulting of Fayetteville, at the time a 2-year-old branding company run by Andy Murray. BrandWorks also had 10 employees. The merger made Thompson Murray a brand consulting agency in addition to an advertising agency. Murray brought with him some heavy-hitting clients, such as Procter & Gamble, where he previously worked for a decade, and Wal-Mart Stores Inc.

Since then, business has been booming for the new agency. The company has added 30 employees, bringing the total to 50 and making it the largest advertising agency in Northwest Arkansas, passing Blackwood Martin/CJRW, which has 45 employees.

Business is so good, Murray said, that Thompson Murray has opened a second office, in Atlanta, to serve three clients there.

Over Easy or Sunny Side Up?

Some folks at other area advertising agencies say that Thompson had all his eggs in one basket with the trucking companies and that he’s doing the same thing now with Procter & Gamble. Both Thompson and Murray say that’s not true, although P&G is obviously an important client.

“The Procter & Gamble and Wal-Mart business helped us diversify to keep up with their growth … and we’ve expanded to other clients,” Murray said.

Some of those other clients include Coca-Cola; Springs International, which manufactures bedding under the Springmaid and Wamsutta names; Jerzees; Kodak; and Rubbermaid. All of those companies are vendors to Wal-Mart. Coca-Cola, Springs International and Jerzees are based in Atlanta.

Neither Thompson nor Murray would say what percentage of the business any one client represents.

Murray said he was not worried that most of his clients are down the food chain from Wal-Mart. The world’s largest retailer is capable of destroying small companies by merely canceling a contract to do business with them. But Coca-Cola is hardly a small company. Murray said that virtually all advertising agencies had a main client and that Thompson Murray was diversified enough to weather the loss of a client.

Name Brands

Murray stressed that the new agency has nothing to do with Thompson Earnhart.

“His company ceased to exist as of June 1, 1999,” Murray said. “We totally threw out the old business model. We don’t have any of the same clients that he had.”

Instead of recruiting truck drivers, Thompson Murray spends most of its time turning Wal-Mart shoppers into buyers, Murray said.

The company comes up with in-store displays for its clients in addition to doing direct mail, billboards and in-store radio promotions. Murray refers to it as “convergence marketing.” An example would be a television ad or bottle-cap contest that refers the shopper to the Internet for more information or to participate in other promotions.

“We help market their brands inside Wal-Mart,” Murray said.

Before the merger, BrandWorks Consulting came up with ideas, but Wal-Mart wanted someone to execute the ideas also. That’s where the merger with Thompson paid off.

“He had a good team that was already doing it,” Murray said. “It was clear we needed to create a one-stop shopping service.”

Because of agreements with his clients, Murray wouldn’t say which displays in Wal-Mart were designed by Thompson Murray.

“Chances are, if you’ve been in Wal-Mart and you’ve seen a display [for one of our clients], Thompson Murray had something to do with it,” Murray said.