TOP EUROPEAN AGENCIES: THE TOP 20 EUROPEAN NETWORKS - Young & Rubicam and Ogilvy & Mather are holding on to the top spots, with McCann-Erickson rejoining them. But is the calm about to be shattered, Alasdair Reid asks?

By ALASDAIR REID, campaignlive.co.uk, Friday, 10 July 1998 12:00AM

There’s an old-fashioned look about the league table this year.

There’s an old-fashioned look about the league table this year.



Young & Rubicam more or less owned the top spot up until a decade ago

and both McCann-Erickson and Ogilvy & Mather are ’first wave’

international agencies who’ve been in the network business longer than

most. With more recent French contenders, Euro RSCG and Publicis, facing

many distractions (both last year and this), the table looks like a

ringing endorsement of stability.



Fernan Montero, the chairman of Y&R Europe, certainly believes so: ’We

were the first agency to benefit from the global consolidation of

accounts.



After a quiet spell, we have started to come into it again. We’ve had a

more aggressive track record based on our ability to demonstrate the

benefits of consolidation and the strength of our network. Ours is a

real network, with the agency in each market 100 per cent owned - we

don’t believe you can deliver benefit unless you have that control.’



Y&R also has one of the most consistent networks. With one or two

obvious exceptions, local offices are invariably in their national top

three by billings; and it regularly boasts three or four agencies voted

national agencies of the year. Y&R had a phenomenal new-business year in

1997, both at a local and an international level - big cross-border wins

included Citibank, Philip Morris, United Airlines and Campbell’s.



Y&R’s year was exceptional in more ways than one. The perceived wisdom

over the past few years is that the business has entered a mature and

stable phase. For agencies, the network-building stage is all but at an

end - and if you don’t have all the bits of the jigsaw in place, it’s

too late to do much about it now.


Similarly, the big multinationals have finished the global

rationalisation process and have consolidated business into agency

networks on a global or pan-regional basis. Accounts are ’tied-in’ these

days - it’s too costly to risk moving them and, because of client

conflict issues, there are relatively few ’safe havens’ for accounts

looking to move. Even if a piece of business does shift, it’s likely to

go to another network with which the advertiser already has a

relationship - and often without a pitch.



For the top networks, the situation is reassuringly stable. But it’s

also a worry. Where is growth going to come from? Networks like O&M put

a lot of store by cultivating organic growth. Mike Walsh, the chief

executive of O&M Europe, explains: ’We work very hard at brand

stewardship, picking up a greater share of the client’s budget. Often

advertising is less than 50 per cent of total marketing

expenditure.’



Many of the big networks like O&M are working hard to improve their

through-the-line credentials and are integrating the marketing services

companies they own into their network offering. Growth can also be

sought at the geographical margins. In recent years, the focus has been

variously eastern Europe, the Middle East (especially Turkey) and the

Balkans. Last year, many of the networks were working furiously to

establish their credentials in the former republics of the Soviet

Union.



But are we witnessing the end of history as far as the big picture is

concerned? Well, perhaps not - there is every indication the business is

about to enter a period of unprecedented upheaval. Not only do a number

of networks face an uncertain future but the big network holding

companies such as WPP and Omnicom seem to have renewed appetites for

acquisition.



Last year saw a dissolution of the alliance between Publicis and FCB

Publicis subsequently tried and failed to acquire FCB’s parent company,

True North - which in turn successfully completed its acquisition of

Bozell earlier this year. True North now looks fairly solid but the

future for Publicis - still strong in Europe but weak elsewhere - is

less certain.



Meanwhile, Euro RSGC has also been reassessing its status. Its parent

company, Havas, was acquired earlier this year by the French utilities

giant, CGE, which announced that, contrary to speculation, it was not

selling the agency. Euro is now looking for a major acquisition or a

merger with an Anglo-Saxon network.



There might be one or two in play. At the end of last year Saatchi &

Saatchi Advertising and Bates were demerged from Cordiant, the holding

company formerly known as Saatchi & Saatchi plc. And Y&R is now a public

company, which could either give it funds for expansion or make it a

takeover target.



Perhaps ominously, the biggest players have served notice that they

intend to get bigger. The WPP boss, Martin Sorrell, announced in a

television interview recently that he had a war chest and was not

frightened of using it.



Omnicom opened this year by strengthening its third-string network,

TBWA, with the purchase of the BDDP GGT group.



Some observers believe we could be about to enter a period of intense

takeover activity, resulting in a handful of holding companies each

having up to half a dozen networks. David Jones, the regional director

of DMB&B Europe, admits that signals emerging from the big groups are

food for thought: ’The biggies are getting bigger and broadening their

acquisition base by moving into new sectors. When the big get bigger the

danger is that everyone else starts to look smaller - and suddenly they

find themselves in the middle ground. They may seek a way out of that by

looking for acquisitions in local markets. But there aren’t many

excellent local agencies around.’



Interestingly though, Jones says there’s a counter trend. Sophisticated

advertisers are looking for new international solutions. ’Often in the

past, traditional systems have produced bland international advertising.

Some are looking for new solutions. The archetypal agency network with a

flag in every major market is perhaps a slightly tired concept.’



And some, like the Publicis chairman, Maurice Levy, believe that we have

already seen the high-water mark in the concentration of agency

ownership.



He believes that advertisers are ready to voice their objections to

further take-overs: ’As they face increasing competition in their own

business, they will increasingly demand that their advertising partners

give full commitment to them. They will become intolerant of a situation

where agency A, acting for a rival, is producing better campaigns than

their agency, network B, owned by the same company.



’Advertisers may have some sympathy with agencies on the question of

client conflict but it is their job to look after their own interests,

not those of the agency. The future will be about networks that can

offer relevant services focused purely on the needs of their clients

and, most importantly, run by managements that can give them their

undivided attention.’



TOP 20 EUROPEAN AGENCY NETWORKS RANKED BY BILLINGS IN 1997

 Rank Agency                     Billings   Chnge       Income     Chnge

97 96                          (dollars m)    (%)    (dollars m)     (%)

                              1997    1996          1997     1996

1  2  Young & Rubicam Europe  5020    4497   11.6    563      512     10

Clients: Andersen Consulting, Campbell’s, Citibank, Colgate-Palmolive,

Danone, Digital, Dr Pepper, Dupont, Ericsson, Ford, Grand Met/IDV, Kraft

Foods International, Lufthansa, Philip Morris, Pirelli, Quaker Oats,

Repsol Oil, Swissair, Star Alliance, United Airlines, United

International Pictures, Xerox No of countries/offices: 23/43 Staff 97:

2950

2  6  McCann-Erickson         4351    3680   18.2    534      517    3.2

      Worldwide

Clients: ABB, AGFA, Air Canada, Bacardi/Martini& Rosso, Black & Decker,

Boots Healthcare International, Buitoni, Canon, Casio, Cathay Pacific,

Cargill, Cereal Partners Worldwide, Chesebrough - Pond’s/Vaseline,

Coca-Cola, Exxon/Esso, Gateway 2000, General Motors, Gilette, Goodyear,

Grundig, Interbrew, Johnson & Johnson, Durex, Lucent Technologies,

Maybelline, Motorola, Nestle, L’Oreal, Perfetti, Reckitt & Colman, RJ

Reynolds, Tiffany, Timex, Vistakon, William Grant & Sons, Unilever, UPS,

Waterman, Yoplait No of countries/offices: 34/64 Staff 97: 4098

3  3  Ogilvy & Mather Europe  4178    3799   10      465      421   10.4

Clients: American Express, Boeing, BTA, Bulgari, Disneyland Paris,

Duracell, Eastman Kodak, Ford, Guinness, IBM, Kimberly-Clark, KJS,

Mattel, Nestle, Nokia, Osram, PepsiCo, Seagram, SmithKline Beecham,

Sony, Stimorol, Unilever, WWF No of countries/offices: 30/112 Staff 97:

2940

4  4  Euro RSCG               4100    4128   -0.6    621      620    0.2

Clients: Airbus, BIC, Cadbury Schweppes, Canal +, Chanel, Citroen,

Credit Suisse, Danone, Eckes, Haagen -Dazs, Heinz, Intel,

Intercontinental, Iomega, Kraft Jacobs Suchard, Lacoste, L’Oreal, Louis

Vuitton, Microsoft, Philips, Playtex/Wonderbra, Procter & Gamble,

Peugeot, Sara Lee No of countries/offices: 25/46 Staff 97: Not supplied

5  1  Publicis Communication  3975    4615  -13.9    595      675  -11.2

Clients: Allied Domecq, Arcopal, Bally, British Airways, Champion USA,

Club Med, Coca-Cola, Pierre Fabre, Guinness, Hermes, Hewlett-Packard,

Inmarsat, L’Oreal, Matra Datavision, Nestle, Pfizer, Quantas, Renault,

Rowenta, Sara Lee/Dim, Siemens, Tefal, Thomson, Unilever/Boursin,

Vedior, Whirlpool No of countries/offices: 31/115 Staff 97: 4520

6  5  BBDO Europe             3781    3700    2.2     ns        -      -

Clients: Aral, Bayer, Best Foods/CPC, Braun, Danone, Disney Consumer

Products, Dr Deiker, Dunlop Tyres, Friesland Dairy Foods, Gilette,

Henkel, Iberia Air lines, ICI/Dulux Paints, Intl Wool Secretariat,

Nestle (non confectionery), Novartis (Sandoz), Oral-B, Pepsi, Pepsico

Foods/Frito-Lay, Philips, Pizza Hut, Sara Lee/Douwe Egberts, Seagram

(Jos.E), Wella, Wm Wrigley Jr, Wrangler No of countries/offices: 34/179

Staff 97: 4581

7  -  DDB International       3320    2900   14.5    473      412   14.8

Clients: American Airlines, Anheuser-Busch, Audi, AXA, Bayer,

Barclaycard, Bjorn Borg Underwear, Boehringer Ingelheim, Bosch,

Bristol-Myers Squibb, Christofle, Clorox, Compaq, CPC Knorr, Danone,

Diesel, Digital, Eurotunnel, FNAC, Seita, Hasbro, Henkel, Irish Tourist

Board, Johnson & Johnson, L’Air Liquide, Marks & Spencer, McDonald’s,

Mobil, Molnlycke, Moulinex, Remy Martin, Reuters, Sony, Spillers

Petfood, Vwm Westin Hotels & Resorts No of countries/offices: 30/50

Staff 97: 3700

8  7  Grey Europe             3300    3100    6.5    468      402   16.4

Clients: Akzo Nobel, Barilla, Barum, BAT , Bayer, Block Drug, BMW,

Boehringer , Bosch, BP, Bristol-Myers Squibb, Canon, CPC Foods,

Deichmann, Digital, Eastman Kodak, Giorgio Beverly Hills, Glaxo, Global

One, Government of India Tourism, Grohe, Hella, Henri Wintermans,

Hoffman LA Roche, Iberia, J&J Merck, Krups, Lexmark, Mars, Microsoft,

Motorola, Nokia, Novartis, Paulig, Procter & Gamble, Sara Lee, SAS,

Schering Plough, Seagram, Siemens, Skoda, Slimfast Foods, SmithKline

Beecham, 3M, Volvo, Warner Bros. Worldspace No of countries/offices:

31/193 Staff 97: 4749

9  9  Bates Europe            3274    2728   20       ns        -      -

Clients: 3M, Amnesty International, BAT, Campbells, Coca-Cola, CPC, DHL,

EDS, Energizer, Europcar, Fort James (Jamont), Mobil Oil, Pharmacia &

Upjohn, Roche - Nicholas, Seat, Tchibo, Tetrapak, Unicef, Warner Lambert

No of countries/offices: 30/72 Staff 97: 2658

10 -  TBWA Worldwide          2931       -    -      422        -      -

Clients: Accor, Aerospatiale, Apple, Aprilia, Beiersdorf - Nivea, Bel,

Bordeaux Vins, Canon (photo and video), Hasbro, Henkel, Hertz, Imation

3M, Kronenbourg, Manpower, McCain, McDonald’s, Michelin, Monsanto

Solaris, Nissan, Novartis Animal Health, Novartis Healthcare, Perstorp

Flooring - Pergo, Pernod Ricard, Philip Morris, Remy Cointreau,

Samsonite, Sara Lee, Seagram - Absolut Vodka and others, Sony

Playstation, South African Airways, Synthelabo No of countries/offices:

25/79 Staff 97: 2772

11 -  J. Walter Thompson      2828    2593    9.1    395      356     11

      Europe

Clients: Chipita, De Beers, Dell, Heineken, Jaguar, Kellogg, Kraft

Jacobs Suchard, Mazda, Minolta, Nestle, Portuguese Tourist Board, Rolex,

Schick Wilkinson, Shell, Siemens, TNT Post Group, UDV, Unilever, Warner

Lambert No of countries/offices: 27/32 Staff 97: 1650

12 8  DMB&B Europe            2654    2400   10.6     ns        -      -

Clients: Australian Tourist Commission, Brown-Forman, Bristol-Myers

Squibb, Burger King, Coca-Cola, Fiat, Hyatt Hotels, Lego, LG Group, Mars

(Petcare, Human Foods, Snack Foods), Merloni/Indesit, Philips NV,

Procter & Gamble, Roche, Scholl Consumer Products, Sci-Fi Channel,

Swatch, Texaco, Transworld Airlines. Western Union No of

countries/offices: 31/64 Staff 97: 2505

13 11 Ammirati Puris Lintas   2254    2400   -6.1     ns        -      -

Clients: Air France, Bosch, Burger King, Castrol, Chefaro, Coca-Cola,

Heineken, Iridium, Johnson&Johnson, Minolta, Montblanc, Nestle, Pfizer,

RJ Reynolds, Rover, Unilever No of countries/offices: 25/31 Staff 97:

2524

14 10 Saatchi & Saatchi       2218    2616  -15.2     ns        -      -

Clients: Alcatel, Allied Domecq, Bonduelle, CPC International, Cadbury

Schweppes, Carlsberg, Delta Air Lines, DuPont, Eastman Kodak, Electrolux

(Flymo), Essilor, Hewlett-Packard, Johnson & Johnson, Merial, Procter&

Gamble, Ralston Purina, Toyota, Visa International No of

countries/offices: 26/35 Staff 97:1905

15 13 Leo Burnett             1926    1450   32.8    242      209   15.8

Clients: Coca-Cola, Fiat, Hallmark, Kellogg, Kraft, McDonald’s, Nestle,

Oracle, Philip Morris, Pillsbury/Green Giant, Procter & Gamble, Regent

Int Hotels, Sealy, United Biscuits/Keebler, United Distillers, Walt

Disney No of countries/offices: 25/25 Staff 97: 1716

16 12 Lowe & Partners Europe  1623    1605    1.1    216      213    1.4

Clients: Avis, Baileys, Braun, Coca-Cola, Diesel, General Motors,

Henkel, Ikea, Malibu, Pillsbury, Reebok, Saab, Sara Lee/Douwe Egberts,

Smirnoff, Tesco, Yves Rocher, Zanussi No of countries/offices: 24/48

Staff 97: 1750

17 20 FCA!BMZ                  750     650   15.2     75       60     25

Clients: Henkel, Soda Club, Sudmilch, Carrefour No of countries/offices:

13/16 Staff 97: 620

18 16 Foote, Cone & Belding    615       -    -       75        -      -

Clients: Beiersdorf, Tesa and Nivea, SC Johnson, Kimberly Clark, 3Com,

Seagate, Bristol-Myers Squibb, RJR Nabisco No of countries/offices:

20/35 Staff 97: 700

19 19 Bozell Worldwide         525     586.5 -10.5    ns        -      -

Clients: Bausch & Lomb Vision Care, Bristol-Myers Squibb, Chrysler,

Divani & Divani, Financial Times, FMC, Hilton International, Kelly

Services, Lycos, Nortel, Ray-Ban, Samsung, UPSA, Unisys No of

countries/offices: 22/23 Staff 97: n/a

20 -  Campus Worknet           435     358   21.5     62       55   12.7

Clients: Land Rover, Forte and Meridien Hotels, Speedo, Orange, Novotel

No of countries/offices: 5/7 Staff 97: 550



This article was first published on campaignlive.co.uk

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