J.T. Hroncich looks at the strapped state of the advertising world, and counts himself fortunate to still be in business. "When the bottom fell through last September and October," he recalls, "people were just so scared that they stopped spending."  

As the managing director of advertising firm Capitol Media Solutions, Hroncich says his firm is not only staying afloat, but is actually growing, thanks to vigorous networking and its unusual position straddling two specialized, but durable niche markets. It handles ad sales for professional association magazines but also, at the same time, ad buying for government agencies.

"We had two sources of revenue. That's how we've done so well," Hroncich says.

And done well in a time of painful turmoil in the industry. "It's been choppy waters," says Patrick Scullin, President of the Atlanta Ad Club marketing professionals' organization and Managing Partner at Ames Scullin O'Haire. "In the past year, 70,000 advertising jobs have been cut nationwide." 

Meanwhile, Capitol Media Solutions reports it's seen continued revenue growth since the company was launched in 2006. "Last year we saw, maybe, a 10 percent increase," Hroncich points out. "This year so far, we are already up 23 percent. That's not even including the last five months of the year."

While it was founded in the Washington DC area, (hence its name) Capitol Media Solutions opened its Atlanta office in March of 2008 and has since been shifting many of its operations south. Jason Morrison, executive director and principal, cites a familiar issue: expense, but also talent. "The cost of doing business is much cheaper here," he grants. "The cost of getting really qualified personnel also seems to be much lower than it is up there, and within the marketing and advertising industry, there are a lot more qualified employees in the Atlanta market than there are in DC." 

Church and state

Regarding the firm's dual focus model, Morrison attributes it to a bit of serendipity, and good public relations in Washington. "We fell into this position we're in right now," he admits. Capitol had been functioning as an advertising sales operation, selling for six magazines published by professional associations, such as Planning, from the American Planning Association, Educational Leadership, created by the Association for Supervision and Curriculum Development, as well as Funworld, put out by the International Association of Amusement Parks and Attractions.

Then came an unexpected call from the National Capital Poison Center. "They came to us," Morrison explains, "because of the exposure that we have online and specifically because we are fairly well recognized within the DC region. We are both very proactive in the community about getting the word out there." Instead of ad sales, the Poison Center wanted help with media planning and buying. Morrison says Capitol Media jumped at the idea. "We said 'well, what a great opportunity to be innovative within the media space and really understand the clients from both perspectives.'" 

As Hroncich puts it, "I always tell people we buy and sell media, which is basically what we do.

"But isn't there a potential conflict of interest by representing both ad buyers and sellers? "It could be," admits Hroncich.

"It could be. But it hasn't come up yet. We do feel that if there's a point where we do have a media buying client that would fit into one of the magazines we sell for, then obviously we would talk about it, we would tell the clients way up front. We're transparent about what we do. Our ad sales clients know we do media buying and our media buying clients know we do sales."

The bifurcated business has also meant a new money stream, and valuable diversification for a newcomer in the field. Today, Morrison estimates that government gigs make up more than 60 percent of his clients. It is, he says, a sometimes exciting line of business, as when Capitol Media leaped into last year's immigration firestorm, doing media buys for the Department of Homeland Security and its E-Verify system to help employers avoid hiring illegal aliens. "It was heavily politicized. All over TV you had, Democrats and Republicans arguing over this. Any day you could turn on CNN and see a debate. It felt good to be part of something that was really mainstream."

But don't get any ideas about taxpayer-funded contracts being a bottomless, recession-proof, source of revenue. "The government is not immune to budget cuts or freezes," Morrison warns. "Thankfully, once a (government) contract goes through, it stays through. But we are the agency of record for the New York City Department of Education and their whole (advertising) budget is frozen when they have traditionally a multi-million dollar annual budget. So now there's nothing going on with them."

Which brings the company gratefully back to its professional association magazines. Supported by members' dues, Morrison acknowledges they do provide a steadier foundation. "Internally, we like to view the associations revenue stream as what pays the bills. The media buying is what really makes us the profits."

Morrison says Capitol is vigorously looking to expand its reach into two of today's widely recognized hot frontiers. One is social media, for which the company is planning to assemble a new team. The other is multicultural media, "particularly the Hispanic market," he specifies. "I have joined the board of the Latin American Association here. We are also on the communications committee. We are one of the sponsors of the Latin Fever Ball. Within both of those arenas, we are really doing our best to get ahead."

The company remains distinctively small. It has only nine employees and five part timers and currently aims for clients spending between $250,000 and $5 million a year in advertising. But Morrison says that keeps the company "nimble" and allows it to staff only "A-team" talent.

In just over a year in Atlanta, Capitol Media has managed to impress. "They have figured out a good strategy for what clients are looking for in today's economy," says Dan Goldgeier, copywriter at Partners and Napier of Atlanta, which has been in discussions for possible collaboration with Capitol Media on future projects. "They've got the speed, the agility, a much more personal touch than, say, a global media Company can provide." 

Goldgeier sees Capitol ideally positioned for what he characterizes as a new era for the industry. "I have been in advertising for about 15 years now," he marvels, "and it has completely changed. You're seeing new startups and you are seeing some big old names crumble. It's a sea change. It really is."

An uncertain era too, rocked by repeated jolts. In May, for example, Georgia mainstay BBDO Atlanta cut 30 jobs, more than three times the number of Capitol Media's entire full time staff. Says Scullin. "a lot of what's going on is the wild west mentality. With the uprising of digital and social media, clients are just not sure where to put their money. What's hot this year may be out next year. It seems everybody's playing it pretty cautiously. Until the unemployment numbers go in the other direction, consumer confidence isn't going to rebound. It's a cautious time."

Hroncich sees it as a time for laying groundwork and building relationships, even if a payoff may be a way off. "We are trying to plant the seeds," he says, "People are definitely interested and we are just trying to position ourselves where we can be your agency of record. When the market does pick up, we will be ready and they will be ready. We are just hoping the economy does get better and things go well and our business does as well."