Stephanie Kruse thinks traditional advertising agencies the outfits that design and place clients' ads for a 15 percent commission are headed for a big fall.
That's an alarming observation for Kruse.
After all, she's president of KPS/3, a Reno firm that's looked strikingly similar to a traditional advertising agency for much of its 12-year history.
But no longer.
KPS/3 last month announced a modest change in ownership as Misty Young, head of its public relations arm, and Tom Clark, who previously ran the lobbying firm of Syndetic Partners, became vice presidents and part owners of the company.
They join Kruse and Creative Director Casey Strachan in ownership of the firm.
The bigger story, however, is Kruse's headlong push to move KPS/3 into new directions.
The impetus for the change, she said last week, is simple: Clients are learning they can move many of the traditional functions of an advertising agency inhouse or rely on advertising media to do the production and placement and some clients are deciding they don't need to pay an agency.
"If you don't provide value, you are perceived as a vendor," Kruse said.
"We knew we did not want to go the way of the travel agency and the stockbroker."
That led to a good deal of introspection at the firm, and the slow dawning that the company already had begun taking the steps that would be its future.
It's been common in the past few years, said the KPS/3 president, for its clients to bounce marketing ideas off the agency.
And it's equally common, she said, for KPS/3 employees to suggest new products, new customer-relations plans or other strategies far removed from the traditional business of an ad agency.
"We crawl around inside our clients' heads," she said.
"Our job is to get it sooner and better."
Not every client needs traditional advertising services, and Kruse acknowledged that not every client is comfortable with an agency that wants to play a broad strategic role in marketing.
A couple of trademarked new programs provide a sense of the broader mission KPS/3 is developing: One program launched by KPS/3 in recent weeks Brand Interface Management seeks to look at the total image presented by a company in everything from its advertising to the ways its employees present themselves.
Another product launched by the company, Public Opinion Partnership, seeks to combine the firm's advertising, public relations, marketing and lobbying skills to create grassroots political change for clients.
That, Clark explained, is far deeper than the one-on-one buttonholing of lawmakers that's the staple of most lobbyists.
The company's new definition of its role, however, doesn't lend itself to the traditional 15 percent commissions levied by agencies to support themselves.
Instead, KPS/3 increasingly looks to fee arrangements consulting retainers, perhaps, or prices set on a per-project basis.
The company's nontraditional workforce provides a great deal of flexibility in pricing structures.
Of its 18 employees, Kruse said, several are part-time or work flexible schedules around child-care or other needs.
Equally important, she said, is a large cadre of freelancers who stand on-call as preferred suppliers to the company.
Those preferred suppliers in exchange give priority to their work for KPS/3.
For all the changes at KPS/3, Kruse expects that the new look will be tweaked even more in coming months.
"You have to pay attention to yourself to learn," she said.
