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Agencies frequently choose new fields that reflect their special talents, or the bent of the boss. Wells, Rich, Greene, mirroring President Mary Wells Lawrence's flair for drama, recently established a motion-picture company, W.R.G./Dragoti Ltd. Two films, Dirty Little Billy, a saga of Billy the Kid, and Spoiled Priests, about a Catholic priest who leaves his order, will go into production within the year. Most of the photographic, writing and editing talent for Billy will be drawn from the W.R.G. staff. Lois Holland Callaway's ventures are in keeping with the canny flamboyance of its president, George Lois. The three-year-old firm founded Mantle Men and Namath Girls, a glossy employment agency aimed at young job seekers. The placement agency's three Manhattan offices grossed $2,000,000 in their first year of operation and Lois has signed up franchisers in twelve major cities. More recently, Lois Holland Callaway founded a recording company, whimsically named Tonsil Records; its first offering features a rock jazz group called The Gas Mask.
The desire to diversify has also affected J. Walter Thompson, the world's largest agency (1969 billings: $740 million). In what President Dan Seymour calls "a financial investment," the agency in 1965 bought an insurance company, Puerto Rican-American, which specializes in auto coverage. Having paid $5,000,000 for 84% of the insurance firm's stock, Thompson replenished its working cap ital by borrowing $5,000,000 from another insurance company—at a low 51% interest rate. This year Puerto Rican-American is earning $1,000,000 on premiums of $14 million.
Unhappy Clients. Some advertisers disapprove of agencies' diversification moves, fearing that they will divert management attention from client services. Last year Procter & Gamble and Warner-Lambert pulled out of P.K.L. Companies Inc. (formerly Papert, Koenig, Lois) partly because they were unhappy with the agency's acquisition of a motorbike company. Century Cycles. .Critics who foresaw disaster when agencies began going public now argue that admen venturing into new fields will fail because they lack experience in production, distribution or retailing.
After surveying 50 top agency chiefs on their diversification plans, Barton A. Cummings, chairman of Compton Advertising, recently concluded that the trend is likely to increase. Outside ventures have a powerful attraction for agency men trying to improve their chances for corporate growth and bring more stability to their all-too-volatile business.