Siegel & Gale

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Siegel & Gale

437 Madison Avenue
New York, New York 10022
U.S.A.
Telephone: (212) 817-6650
Fax: (212) 817-6680
Web site: http//www.siegelgale.com

Wholly Owned Subsidiary of Omnicom Group Inc.
Incorporated: 1969
Employees: 130
Sales: $30 million (2002)
NAIC: 541618 Other Management Consulting Services

New York City-based Siegel & Gale is a subsidiary of Omnicom Group Inc., the world's largest advertising conglomerate. As part of Omnicom's Diversified Agency Services Group, Siegel provides a wide range of brand marketing services, such as strategic positioning, brand training for employees and vendors, and tailored relationship programs. The company has also made a specialty of helping corporations to simplify their communications and improve verbal and visual expressions across all media. In recent years, Siegel has become very active in interactive services, including online branding, Web design, and Web strategy consulting. With more than 30 years of experience in its field, Siegel boasts an impression roster of clients, including Citibank, the American Red Cross, Jiffy Lube, Disney, the National Basketball Association, and the Securities and Exchange Commission.

Alan Siegel Learns the Advertising Business
in the 1960s

The driving force behind the founding and success of Siegel & Gale is its longtime chairman, Alan Michael Siegel. He was born in 1938 in New York City in sight of Yankee Stadium, the son of a photograph engraver who worked in the advertising industry. Although he would follow in his father's footsteps in many ways, he took a circuitous route in the journey. He graduated from Cornell University in 1960 with a degree in Industrial Aid Relations and Economics but had no certain career path and was not pleased with his job prospects. He returned to school to study law at New York University School of Law, then two years later dropped out to serve a two-year stint as a first lieutenant in the Army. Stationed in West Germany, Siegel developed an interest in photography, learning the trade from an elderly German who worked on the military base. This newfound enthusiasm for the visual arts led Siegel, after his discharge from the Army, to study with professionals Alexey Brodovitch, renowned photographer for Harper's Bazaar, and Austrian-born Lisett Model. To support himself, Siegel took a position with the Batten, Barton, Durstine and Osborn (BBDO) advertising agency, becoming part of the firm's training program. He learned the full range of the advertising business—marketing, media, project management, new product development, creative, cognitive research—which served as valuable preparation for the day he would strike out on his own. After completing his traineeship, Siegel worked for a man named Bruce Crawford, who 40 years later, as the chairman of Omnicom, would acquire Siegel & Gale. In 1967, Siegel went to work for the public relations firm of Ruder Finn, becoming an account executive, and two years later accepted a position with Sandgren & Murtha Inc., a New York marketing and design consultancy, where he again served as an account executive but was promised a partnership down the line. Because Siegel was just 30 years old, however, the firm backed away from the idea. Rather than wait to become a partner at Sandren, Siegel decided to start his own business.

In 1969, Siegel developed a business plan for a corporate logo design shop. He hired a designer named Robert Gale, who subsequently took equity in the company, which assumed the name Siegel & Gale. At first, the company operated out of Alan Siegel's apartment. In his words, "The concept behind new firm was strategic thinking plus top-flight design. At the time nobody was combining the two." The first customer was tire manufacturer Uniroyal, which was interested in creating a brand identity for stores it owned in Colombia and Venezuela. The relationship was later expanded to include the company's global brand identity. Another early client was the mailing solutions firm Pitney Bowes. Siegel moved out of its founder's apartment to a half-residential, half-commercial building. By the end of the first year, the company consisted of five employees. Revenues totaled about $120,000.

Diversification in the 1970s–80s

After four years, Gale decided he wanted to spend more time on architectural graphics. Siegel bought him out but retained the Siegel & Gale name because of its brand recognition and established reputation in the corporate identity field. It was during the 1970s that the firm began to diversify beyond logo and branding work, setting up a unit devoted to the simplification of business and government documents. Alan Siegel told Interactive PR in a 1997 online interview, "Working with many banks in the mid '70s, I was surprised at how atrocious the bank applications and legal agreements were.… I was amazed that the insurance companies, the banks, leasing companies, were still using documents that were draconian in every sense. They were intimidating looking. They were unreadable. We were working for Citibank, and I approached them about simplifying the documents they used in their retail marketing. We simplified their consumer loan note, which was absolutely impenetrable. We changed the content to reflect the way the bank actually behaved, as opposed to how lawyers wanted to treat a transaction." Simplification in communications became a preoccupation for Alan Siegel, who spent several years traveling the country lecturing on the subject, in the process building up this pioneering business within Siegel & Gale. The firm worked with a number of financial services companies, helping them to retool their forms and documents. Ultimately, Siegel & Gale funded, and Alan Siegel co-founded, a graduate program at Carnegie Mellon University to teach students document simplification. While many of the graduates went to work for technology companies, some of the most gifted were recruited to work for Siegel.

The firm diversified even further during the 1980s. It went beyond the traditional idea of creating a corporate identity and began to develop "corporate voice" programs that helped companies to create a distinct and consistent personality when interacting with customers. Moreover, Siegel began to offer integrated marketing campaigns. In addition to creating brand strategies, the firm, well established in the United States, was now looking to expand overseas in order to implement these plans on a global basis. In 1984, Siegel was generating around $6 million in annual revenues, only 5 percent of which came from overseas work. It was at this point that advertising giant Saatchi and Saatchi was assembling a global network of marketing services and targeted Siegel as a company it would like in its fold. Alan Siegel recognized that the design business was going global, appreciated Saatchi's aggressive spirit, and decided that by aligning with a deep-pocketed corporate parent his firm would have the resources to expand in a way that would prove impossible by going it alone. Thus, Alan Siegel agreed to sell the business to Saatchi for $13.5 million, although he continued to head the company and enjoyed virtual autonomy.

Struggles with Saatchi: 1980s–90s

The relationship with Saatchi, however, never proved as beneficial as hoped. On the positive side, Siegel was able to expand internationally by latching onto local Saatchi operations; the firm was also able in some cases to land Saatchi customers, and revenues grew at a steady pace, with international sales accounting for half of all sales by 1988. At the same time, however, Siegel's growth was in many respects stunted. Saatchi went through some difficult financial times and was unable to provide the kind of capital that was necessary for Siegel to make acquisitions, invest in needed equipment, and open offices in new locations. Furthermore, opportunities to create synergy with other parts of the Saatchi empire were limited. In fact, Siegel's interests were often in conflict with those of other Saatchi units, some of which competed with the firm over the same business. "Early on," Alan Siegel told Brand Strategy, "we realized that it wasn't as productive a relationship as we had hoped." In 1990, Alan Siegel attempted to buy back the firm, but Saatchi rejected the offer and Siegel & Gale was forced to continued to operate under the auspices of a ponderous corporate parent that was focused on advertising and far less interested in growing Siegel than did was the entrepreneurial leader and his team.

During the 1990s, Siegel became increasingly involved in incorporating the Internet into its business. Work with document simplification had introduced the company to the power and possibilities of personal computers interacting with consumers. In the mid-1990s, Siegel launched its interactive media practice, one of the first companies to do so. Well before the Internet reached critical mass with the public, Siegel was already exploring the impact of the Internet and e-commerce on branding, especially for well-established businesses. It designed early Web sites for American Express, Kodak, Ernst & Young, and IBM. While highly enthusiastic about the Web, Siegel still chose to view it as just another tool, albeit a powerful one, serving the firm's traditional goal of defining and building brands.

Company Perspectives:

We create simple, relevant, compelling branding programs to drive business success.

In the meantime, Siegel's corporate parent changed its name to Cordiant (with the help of Siegel) and was forced to sell off a number of units. It appeared in the fall of 1996 that Cordiant might spin-off Siegel in a stock offering, taking advantage of Siegel's expertise in interactive marketing and a boom in this field, to raise some much needed cash. In the end, however, the offering did not come to pass. Finally, in 1998, events transpired that would allow Alan Siegel an opportunity to regain the firm's freedom. Cordiant was broken into two companies, with Siegel assigned to the Saatchi & Saatchi entity, which its management decided to position as a pure advertising company, eschewing the idea of emphasizing or associating their services around brand identity. As a consequence, Siegel became an illfitting part and Saatchi was receptive to a buyout offer. Alan Siegel put together a $33.8 million package and in June 1998 bought back the firm.

Independence Regained in the New Century

Independent once again, Siegel continued to become increasing involved in its Internet and e-commerce services. Unlike its dot-com counterparts of this era, however, Siegel was not burning through seed money and had been profitable for many years. In 2000, the firm decided to apply the lessons it learned working on clients to perform a makeover on itself. To emphasize the importance of its e-commerce practice, it renamed itself Siegelgale so that the firm's Internet address and official name would be the same. Although there was no intention of abandoning more traditional branding work, the firm anticipated that in time the majority of its business would be done on the e-commerce side. Moreover, a company spokesperson told Design Week that Siegelgale "predicts e-strategies will come to dominate the shaping of brands and believes a new breed of branding communications company is needed to exploit the full potential." To support its commitment to e-commerce and goal of becoming a dominant player in the market, the firm launched a $6 million in-house developed advertising campaign, including print advertisements, radio commercial, airport posters, and online advertisements. The intent was to bring attention to the firm's many e-commerce clients, the likes of which included dot-coms such as Lycos, old-line corporations such as American Express, as well as "click and mortar" hybrids such as Toys "R" Us. Later in 2000, Siegelgale expanded its e-services by launching a Broadband and Wireless Group to develop branding initiatives for the new wireless devices that would be entering the marketplace. As had been the case with the Internet several years earlier, the firm had already had been involved in the area before establishing this specialized unit.

With the bursting of the dot-com bubble, emphasizing its e-commerce credentials quickly lost its luster for Siegelgale. At least it was not among the many dot-com casualties, but the slumping economy of the early years of the new century took its toll on the firm. In 2002, the London office was downsized and a year later was eliminated entirely, with the work for international clients turned over to the New York office. Although Alan Siegel was pleased with the firm's freedom, he was practical enough to realize the company's limitations as an independent company competing in a world of massive, global media concerns. In an August 2001 interview with Brand Strategy, he admitted that the eventual realignment of the firm with a large advertising agency was "a distinct possibility." Nearly two years later, in May 2003, that possibility became reality when Omnicom Group acquired Siegelgale for an undisclosed amount of money, part of a buying spree to build up its Diversified Agency Services Group. Alan Siegel stayed on as chairman of the company, which subsequently reverted to its original name of Siegel & Gale.

Principal Competitors

Corporate Branding, LLC; FutureBrand Worldwide; The Richards Group, Inc.

Key Dates:

1969:
Siegel & Gale is founded.: 1985:
The company is sold to Saatchi & Saatchi.: 1998:
Alan Siegel buys back the company.: 2000:
The company's name is altered to Siegelgale.: 2003:
Following the sale of the company to Omnicom, its name reverts to Siegel & Gale.