Agency Performance League 2009

campaignlive.co.uk, Friday, 23 January 2009 12:00AM

This year's survey portrays a sector growing and generating profitability. But given the economic climate, such growth may not be seen again for a while. Mandy Merron analyses the figures.

The results of this year's Kingston Smith W1 survey Financial Performance of Marketing Services Companies portray a sector which is growing and generating good profitability. Agency groups anticipated that 2008 budgets would be met but there is, to say the least, less confidence over 2009. Groups approach the future with "cautious optimism".

As last year, the fastest-growing regions were Asia-Pacific, Latin America, Africa and the Middle East. The slowest-growing regions once again included the UK and Spain.

According to the most recently filed accounts, spend through the top 50 UK advertising agencies as measured by turnover grew by just 3.7 per cent. Gross income grew by nearly 7 per cent and increased for 70 per cent of the companies reviewed. Just two companies reported an increase in gross profit of more than 50 per cent: The Gate Worldwide grew by 74 per cent and new entrant into the top 50 Albion Brand Communications increased by nearly 80 per cent.

Strong growth at The Red Brick Road of 21 per cent resulted in its top 31 ranking and two other new entrants, Beattie McGuinness Bungay and Lawton Communications, grew by 47 per cent and 42 per cent respectively. A significant fall was reported by St Luke's.

A PROFITABLE INDUSTRY

Pre-tax profit grew by 13 per cent overall. Operating profit increased by 26 per cent compared with a 7.7 per cent increase last year. Operating margin (operating profit as a percentage of gross income) increased to 12.3 per cent on average.

Given the economic climate, it's interesting to draw comparisons to 1991, before the last significant downturn, when operating profit margin for the largest agencies stood at 9.8 per cent. In the three subsequent years, they recorded overall operating losses.

Forty-five of the top 50 reported an operating profit. Young & Rubicam and M&C Saatchi reported the most significant increases of 34 per cent and 63 per cent respectively. Young & Rubicam generated the highest operating profit overall of £17.3 million.

Agencies suffering the biggest decline in operating profit were Saatchi & Saatchi Group, where operating profit fell by 32 per cent, and Leo Burnett, where profit dropped by 26 per cent. Grey reversed recent improvements with a 45 per cent fall. DraftFCB London reported the biggest operating loss of £4.3 million while its merger partner, Draft London, suffered an operating loss of £1.3 million.

A well-run profitable agency should be able to generate an operating profit margin of 15 per cent or more. Of the top 50 agencies, 18 beat this benchmark and five generated an operating margin in excess of 20 per cent. Albion Brand Communications generated the highest margin of 39 per cent.

Of the 21 agencies which kept staff costs below 55 per cent or less, 11 generated operating margins in excess of 15 per cent. This year, staff costs absorbed 56 per cent of gross income - a further improvement over the 58 per cent reported in the previous survey.

The highest-paid director at an ad agency was at Bartle Bogle Hegarty, earning £649,000. However, the agency generated a 7 per cent increase in gross income and a 5 per cent increase in profit. Directors' pay for ad agency directors was generally small compared with that for directors heading the listed groups. Sir Martin Sorrell again heads the table with a remuneration package of just under £4 million.

THE GREAT DIVIDE

Independently owned agencies grew gross income by 13 per cent, compared with 6 per cent reported by the group-owned companies. Independent agencies increased operating profit by 22 per cent, but group-owned agencies' operating profit went up by 28 per cent. Golley Slater Group and Lawton Communications Group reported a rise of more than £1 million.

More than half of the group-owned agencies reported operating profit increases of more than 25 per cent, with the Cello-owned Tangible Financial (formerly cchm:ping) reporting an increase of 446 per cent.

The differential in salary between group-owned and independent agencies increased again this year, with group-owned agency staff picking up an extra £10,600 per employee on average compared with a differential of £10,100 last year.

RISING FIGURES

Productivity, as measured by gross income per head, grew on average by 3.8 per cent to £105,106 per head. Operating profit per head reflects a combination of productivity and how effectively an agency converts revenue into profit. This increased by 22 per cent to £12,802 per head. Miles Calcraft Briginshaw Duffy increased its operating profit per head by 73 per cent to £23,000 per head.

Operating profit grew by 22 per cent but pre-tax profit by only 13 per cent. One of the reasons was that exceptional costs increased to £12.9 million from £9.1 million. Twenty-four agencies recorded exceptional costs and only two, McCann Erickson Communications House and Tangible Financial, reported net exceptional income of £1.7 million and £476,000 respectively.

TBWA\Manchester wrote off £4.87 million from its investment in Tequila\ Manchester, which was in liquidation. This followed write-offs in previous years.

- Financial Performance of Marketing Services Companies 2008 is available from Kingston Smith W1 (020 7566 3850), priced £460.

MEDIA BUYING AGENCIES

Media buyers continued to outperform the top 50 marketing services groups with another strong financial performance in what, until recently, was a good economic climate. The sector as a whole increased turnover by 7.8 per cent, which was converted into a 13.5 per cent increase in gross income.

Operating profit increased by a massive 25.1 per cent despite a significant increase in employment costs. As a consequence, media buyers achieved a further increase in operating profit margins to 20.8 per cent.

Digital specialist media buyers saw the sharpest rise in gross income, with i-level growing by 54 per cent. M&C Saatchi's subsidiary Walker Media, which also has a significant digital offering, grew by 35 per cent. Many media buying agencies are offering a digital capability but some cited the lack of skilled staff as a barrier to growth. But this problem may reduce in the coming year.

Independently owned agencies are, on the whole, at the bottom of the gross income league table as they are smaller operations. However, they now represent a 15.6 per cent market share of the top 30's gross income - from 14.4 per cent the previous year.

Independents outperformed group-owned companies in revenue growth but not in profitability. They increased gross income by 23 per cent compared with 12 per cent for group-owned companies, but operating profits reversed this trend. Independents increased operating profit by 11.5 per cent compared with 28 per cent for group-owned companies. Despite an increase in their market share, independents may find it harder to compete with the economies of scale that come from larger businesses.

Operating profits increased by 25.1 per cent across the sector as a whole to £113.6 million. The top 30 media buying companies generated £18.4 million of net interest income this year, representing 12.9 per cent of pre-tax profits.

Kingston Smith W1 recommends an operating profit margin benchmark figure of 15 per cent, which only half of the top 30 media buying companies achieved. Eight managed between 10 per cent and 15 per cent. At the top end of the scale, nine companies exceeded 25 per cent, which is exceptionally good.

There was an improvement in the top 30's productivity as gross income per head increased by 3.6 per cent. Employment costs per head increased by 5.5 per cent and staff numbers increased by around 10 per cent.

This year's survey also revealed an overall increase in operating profit per head from £18,910 to £21,590. Average gross income per head, at £103,575, is now slightly above our benchmark figure of £100,000.

- Cliff Ireton, partner, Kingston Smith W1

MARKETING GROUPS

Over the past few years, the number of UK quoted marketing groups has increased significantly. There are now 25, ranging from the global giant WPP to Plus-listed PR group Argyll Consultancies.

The UK quoted marketing groups reported an impressive operating profit margin of 15 per cent, despite a slight drop in productivity. Staff costs were tightly controlled and groups which contained employee costs to within 60 per cent of gross income generated an average operating margin of 21 per cent. According to the most recently filed accounts, pre-tax profit increased by 8 per cent overall. Gross income rose by 6.4 per cent, of which 5.5 per cent resulted from organic growth as opposed to acquisitions. As a result, groups borrowed more to fund these acquisitions and interest costs rose by nearly 33 per cent.

Interest absorbed 14 per cent of operating profit, which is an increase from 12 per cent in the previous year. Interest accounted for more than 25 per cent of operating profit at four groups. If profits fall, this percentage is likely to increase and may be an issue for the more highly geared groups, although low interest rates look likely to compensate for that. The bigger issue may be a growing trend for banks to want to reduce the level of debt extended and renegotiate terms to link interest rates to the higher interest that banks themselves pay on the market.

The level of acquisition was high, although the results reviewed precede WPP's acquisition of the research group Taylor Nelson Sofres, which is likely to be the last such deal of this size for a while. Acquisitions in the UK tended to be driven by the medium-sized groups. M&C Saatchi bought the brand consultancy Clear Ideas, increased its stake in Walker Media and bought out the digital ad agency Play. The regional specialist The Mission Marketing Group continued to build with four acquisitions around the country.

Ben Langdon's Digital Marketing Group bought five digital businesses while Deal Group Media adopted a different route and disposed of 51 per cent of its UK operation to its management to concentrate its growth in the Asia-Pacific region. Chime, Cello, Optimisa, YouGov, Motivcom, Hasgrove, Adventis Group and Huntsworth all made relatively significant acquisitions.

WPP generated the highest pre-tax profit by virtue of its size, followed by Aegis. The highest growth in pre-tax profit was reported by the online research group Brainjuicer, due almost solely to organic growth. This was one of two stocks which, during 2007 and 2008, were highly rated by analysts. The other was also an online research specialist, YouGov. Strong profit growth was also reported by The Mission Marketing Group, Digital Marketing Group and Huntsworth, all of which doubled pre-tax profit helped by acquisition. Media Square reported the largest pre-tax loss, which increased from £2.2 million to £26.8 million.

There is speculation that a number of quoted groups are trying to come off market and it seems inevitable that the economic climate will lead to further consolidation among the quoted groups themselves. We can expect to see the pool of listed marketing groups reducing in the future.

DIGITAL AGENCIES

Digital agencies have continued to grow at a rapid rate. Almost all the top 30 agencies have expanded in terms of income growth as well as headcount. Collectively, gross income increased by 47 per cent, which was the highest growth in income of all marketing services disciplines surveyed and follows a 33 per cent increase in last year's survey.

However, despite the rising demand for digital services, profit margins sit at only 10 per cent as agencies struggle to contain costs. This begs the question: are clients being charged enough for this premium service? The answer seems to be no.

Operating margins of 10 per cent were disappointing - a figure significantly lower than our benchmark of at least 15 per cent expected of a well-run agency. One loss-making agency distorts the average, but by excluding it, the average operating profit margins for digital agencies would still only be 11 per cent. Web Liquid and TMN Group recorded margins in excess of 30 per cent. The 16 group-owned agencies grew faster than the 14 independents, with growth rates of 59 per cent and 30 per cent respectively. This could be due to digital work being referred to them by agencies within the group without digital capability.

Independent agencies were able to generate more income per head than group-owned agencies while paying, on average, slightly less. However, our research revealed slightly better margins at the group-owned agencies.They found better ways of controlling overheads, perhaps through economies of scale and the utilisation of spare capacity within each group.

With an average productivity (measured by gross income per head) of £73,284, digital agencies lagged behind other marketing services disciplines. This is partly compensated for by lower staff costs. However, the staff costs to gross income ratio at 63 per cent exceeded our target of 55 per cent, which should be achieved in order for an agency to maximise profitability.

There continues to be a direct correlation between agencies with low employment costs to gross income ratios, and those that deliver good margins. The average margin was 20 per cent for agencies which beat the 55 per cent target and 7 per cent for those which did not.

Eveyone is aware of the tough economic outlook for 2009 and the impact this will have on the marketing services sector. However, digital agencies can take comfort in the knowledge they are operating in the fastest-growing market of all the marketing services. It will be interesting to see if digital marketing agencies manage to gain even more market share as marketers favour marketing methods that are more easily able to demonstrate return on investment.

- Esther Carder, partner, Kingston Smith W1

DIRECT MARKETING AND SALES PROMOTION

The direct marketing and sales promotion (DMSP) sector continued to show steady growth in fee income, which in turn was converted into increased profits. Gross income among the top 40 DMSP agencies rose by 9 per cent and operating profits increased by 6.9 per cent. Despite this improvement, the sector continues to underperform in comparison to the top 50 marketing services companies.

Group-owned agencies performed far better than independent agencies. According to the most recently filed accounts, the performance gap between the two has become quite large.

The 9 per cent rise in gross income among the top 40 DMSP agencies equates to an increase by £36.2 million. However, the size of agency proved a distinguishing factor in growth rates, with smaller independents growing fastest at 16 per cent. Subsidiaries of group companies grew by just 5 per cent.

Gyro International reported the biggest increase in gross income, up by £6.7 million - a 46 per cent rise. Gyro's five acquisitions during 2007 help explain the increase along with the opening of offices in Dubai and Madrid. BD Network and Iris London achieved significant growth in fee income (48 per cent and 41 per cent respectively) organically.

The increase in gross income has led to an increase in operating profit across the sector of 6.9 per cent, despite employment costs rising by 8.5 per cent and other operating costs increasing by 10 per cent. The results for group-owned and independent agencies were polarised at operating profit level. On aggregate, the operating profits of independents fell by 37 per cent, whereas group companies reported a 19 per cent increase in operating profit. Of the eight companies reporting an operating loss, six were independent agencies. Operating profit margin was largely unchanged at 8.7 per cent compared with 8.9 per cent previously. Just over half the companies in the top 40 achieved an increase in operating profit margin and just four companies achieved a margin in excess of 20 per cent.

Gross income per head has improved by 3.6 per cent to £87,074. Thirteen companies achieved productivity in excess of our benchmark of £100,000. Proximity London topped the table with £124,000 of gross income per head.

- Cliff Ireton, partner, Kingston Smith W1

TOP 50 ADVERTISING AGENCIES
Rank Rank Agency Year end Gross income
latest prev Latest Previous Chge
(£000s) (%)
1 1 Young & Rubicam Group 31/12/07 110,093 107,375 2.53
2 2 M&C Saatchi plc 31/12/07 87,620 75,893 15.45
3 3 Ogilvy & Mather Group
(Holdings)1 31/12/06 68,198 68,859 -0.96
4 4 Bartle Bogle Hegarty 31/12/07 60,995 56,990 7.03
5 6 McCann Erickson
Advertising 31/12/07 49,295 44,910 9.76
6 9 DDB UK2 31/12/07 46,707 42,309 10.39
7 5 J Walter Thompson Group 31/12/07 46,085 49,562 -7.02
8 7 Saatchi & Saatchi Group 31/12/07 45,434 47,947 -5.24
9 8 Abbott Mead Vickers
BBDO 31/12/07 43,342 42,673 1.57
10 10 Publicis 31/12/07 35,428 35,808 -1.06
11 11 Leo Burnett 31/12/07 28,633 31,144 -8.06
12 14 McCann Erickson
Communications House3 31/12/07 24,659 21,017 17.33
13 13 Grey Advertising 31/12/07 21,938 22,684 -3.29
14 15 Accord Group4 31/12/07 21,212 21,094 0.56
15 17 Euro RSCG London 31/12/07 20,299 14,838 36.80
16 19 Delaney Lund Knox
Warren & Partners 31/03/2008 20,053 15,660 28.05
17 18 Bray Leino 31/12/07 19,426 16,597 17.05
18 25 Fallon London 31/12/07 18,536 12,382 49.70
19 16 TBWA\London 31/12/07 17,769 18,241 -2.59
20 23 WCRS 31/12/07 17,699 15,713 12.64
21 20 Golley Slater Group 30/11/06 17,084 14,791 15.50
22 21 CHI & Partners5 30/09/07 16,991 14,719 15.44
23 12 Lowe & Partners 31/12/07 15,982 16,107 -0.78
24 22 VCCP 31/12/07 15,353 14,507 5.83
25 27 Miles Calcraft
Briginshaw Duffy 30/09/07 15,061 12,960 16.21
26 24 Mother Advertising 31/12/07 14,003 13,993 0.07
27 33 The Gate Worldwide 28/02/2008 13,164 7,581 73.64
28 34 Wieden & Kennedy UK 31/12/07 12,566 8,588 46.32
29 30 Adventis Group plc 31/12/07 11,700 8,754 33.65
30 29 Leagas Delaney 31/12/06 11,452 9,550 19.92
31 - The Red Brick Road 31/12/07 10,270 8,496 20.88
32 36 BRAHM 31/07/07 8,654 6,918 25.09
33 35 The Leith Agency 31/12/07 8,524 6,935 22.91
34 - Lawton Communications
Group 30/12/07 6,972 4,904 42.17
35 28 TBWA\Manchester6 31/12/07 6,765 7,516 -9.99
36 26 DraftFCB London7 31/12/07 6,720 4,207 59.73
37 - Albion Brand
Communications 31/07/2008 6,308 3,515 79.46
38 - Beattie McGuinness
Bungay 31/12/07 5,983 4,070 47.00
39 38 Advertising Principles
(Group) 31/03/07 5,965 6,002 -0.62
40 31 Draft London 31/12/07 5,801 10,512 -44.82
41 44 Robson Brown 29/02/2008 5,516 5,336 3.37
42 - Tangible Financial8 31/12/07 5,219 5,564 -6.20
43 40 Cheethambell JWT 31/12/07 4,918 5,572 -11.74
44 49 WFCA Integrated 31/12/07 4,890 3,725 31.28
45 43 BJL Group9 30/06/07 4,827 4,225 14.25
46 42 Langland Advertising
Design & Marketing 30/09/07 4,750 4,440 6.98
47 48 Big Communications 31/12/07 4,408 3,798 16.06
48 45 Souk Communications 31/12/07 4,309 4,017 7.27
49 46 Nexus/H UK 31/12/07 3,952 3,994 -1.05
50 37 St Luke's
Communications 31/12/07 3,265 4,614 -29.24

TOP 50 ADVERTISING AGENCIES
Rank Rank Agency Year end Operating profit
per head
latest prev Latest Previous Chge
(pounds) (%)
1 1 Young & Rubicam Group 31/12/07 16,554 12,097 36.84
2 2 M&C Saatchi plc 31/12/07 11,616 7,130 62.93
3 3 Ogilvy & Mather Group
(Holdings)1 31/12/06 10,359 10,920 -5.14
4 4 Bartle Bogle Hegarty 31/12/07 20,252 19,377 4.52
5 6 McCann Erickson
Advertising 31/12/07 23,016 15,821 45.48
6 9 DDB UK2 31/12/07 12,653 12,872 -1.70
7 5 J Walter Thompson Group 31/12/07 8,134 5,736 41.80
8 7 Saatchi & Saatchi Group 31/12/07 21,670 29,160 -25.69
9 8 Abbott Mead Vickers
BBDO 31/12/07 26,991 27,587 -2.16
10 10 Publicis 31/12/07 26,268 23,565 11.47
11 11 Leo Burnett 31/12/07 19,540 23,516 -16.90
12 14 McCann Erickson
Communications House3 31/12/07 9,492 6,045 57.03
13 13 Grey Advertising 31/12/07 8,244 13,902 -40.69
14 15 Accord Group4 31/12/07 10,019 9,995 0.24
15 17 Euro RSCG London 31/12/07 1,050 -8,123 112.93
16 19 Delaney Lund Knox
Warren & Partners 31/03/2008 15,780 23,459 -32.73
17 18 Bray Leino 31/12/07 15,381 15,383 -0.01
18 25 Fallon London 31/12/07 21,606 13,426 60.93
19 16 TBWA\London 31/12/07 10,736 16,289 -34.09
20 23 WCRS 31/12/07 10,192 9,613 6.02
21 20 Golley Slater Group 30/11/06 9,855 7,192 37.03
22 21 CHI & Partners5 30/09/07 15,360 20,676 -25.71
23 12 Lowe & Partners 31/12/07 -5,308 -31,403 83.10
24 22 VCCP 31/12/07 20,188 19,636 2.81
25 27 Miles Calcraft
Briginshaw Duffy 30/09/07 25,954 14,983 73.22
26 24 Mother Advertising 31/12/07 9,515 2,237 325.40
27 33 The Gate Worldwide 28/02/2008 9,355 8,781 6.54
28 34 Wieden & Kennedy UK 31/12/07 13,309 4,205 216.47
29 30 Adventis Group plc 31/12/07 17,329 16,392 5.71
30 29 Leagas Delaney 31/12/06 9,496 4,910 93.40
31 - The Red Brick Road 31/12/07 8,061 7,298 10.45
32 36 BRAHM 31/07/07 4,270 3,860 10.63
33 35 The Leith Agency 31/12/07 9,076 10,022 -9.44
34 - Lawton Communications
Group 30/12/07 4,057 -5,566 172.88
35 28 TBWA\Manchester6 31/12/07 851 337 152.66
36 26 DraftFCB London7 31/12/07 -75,491 -93,481 19.24
37 - Albion Brand
Communications 31/07/2008 n/a n/a n/a
38 - Beattie McGuinness
Bungay 31/12/07 19,492 12,308 58.37
39 38 Advertising Principles
(Group) 31/03/07 2,179 3,102 -29.77
40 31 Draft London 31/12/07 -15,518 8,179 -289.72
41 44 Robson Brown 29/02/2008 5,355 6,361 -15.82
42 - Tangible Financial8 31/12/07 6,022 -6,455 193.29
43 40 Cheethambell JWT 31/12/07 8,171 2,360 246.18
44 49 WFCA Integrated 31/12/07 21,316 23,043 -7.49
45 43 BJL Group9 30/06/07 13,484 8,111 66.24
46 42 Langland Advertising
Design & Marketing 30/09/07 35,667 39,500 -9.70
47 48 Big Communications 31/12/07 19,486 18,407 5.86
48 45 Souk Communications 31/12/07 -2,672 -4,643 42.45
49 46 Nexus/H UK 31/12/07 n/a n/a n/a
50 37 St Luke's
Communications 31/12/07 -35,500 -6,948 -410.92

Source: Kingston Smith W1 has used figures filed at Companies House,
covering periods ending in 2004, 2005, 2006 and 2007.
Definitions: gross income - turnover less direct costs of sales, if any;
employment costs - the total of gross salaries, employers' NIC and
pension costs; operating profit - pre-tax, excluding the amortisation or
impairment of goodwill from acquisitions of other businesses,
exceptional items, income from (or losses of) related companies or
interest receivable and investment income less interest payable.
Notes: 1 prev. The Ogilvy Group (Holdings); 2 prev. BMP DDB; 3 prev.
McCann Erickson Manchester; 4 prev. Accord Holdings; 5 prev. Clemmow
Hornby Inge 6 prev. BDH\TBWA; 7 prev. FCB London; 8 prev. cchm:ping; 9
prev. Barrington Johnson Lorains & Partners Cann-Erickson Manchester; 2
prev. Euro RSCG Wnek Gosper; 3 prev. HHCL/Red Cell Advertising; 4 prev. Camp Chipperfield Hill Murray; 5 prev. Barrington Johnson Lorains &
Partners.

MEDIA BUYING AGENCIES
Rank Agency Year end Gross income
Latest Change
(£000s) (%)
1 Aegis Media1 31/12/06 104,342 15.61
2 Mindshare Media (UK) 31/12/07 55,349 12.39
3 MediaCom UK 31/12/06 47,514 15.45
4 OMD Group 31/12/07 46,045 22.71
5 D'Arcy Masius Benton & Bowles 31/12/07 42,441 -1.04
6 ZenithOptimedia 31/12/07 23,027 -0.58
7 Mediaedge:cia International 31/12/07 19,183 43.76
8 PHD Media 31/12/07 18,245 -2.89
9 MediaVest (Manchester) 28/02/07 17,881 30.04
10 Mediaedge:cia UK 31/12/07 17,428 15.23
11 Kinetic Worldwide 31/12/07 15,589 -10.98
12 MPG 31/12/07 15,464 9.74
13 Walker Media 31/12/07 14,274 34.69
14 BLM Holdings 31/12/07 13,512 29.65
15 I-level 31/03/07 11,669 53.92


MEDIA BUYING AGENCIES
Rank Agency Year end Operating profit
Latest Change
(£000s) (%)
1 Aegis Media1 31/12/06 33,898 19.38
2 Mindshare Media (UK) 31/12/07 7,966 674.15
3 MediaCom UK 31/12/06 11,231 -1.57
4 OMD Group 31/12/07 7,944 -3.58
5 D'Arcy Masius Benton & Bowles 31/12/07 7,844 -21.72
6 ZenithOptimedia 31/12/07 4,131 94.22
7 Mediaedge:cia International 31/12/07 2,596 176.74
8 PHD Media 31/12/07 2,683 -31.52
9 MediaVest (Manchester) 28/02/07 5,337 57.67
10 Mediaedge:cia UK 31/12/07 1,600 27.69
11 Kinetic Worldwide 31/12/07 4,370 -28.16
12 MPG 31/12/07 688 35.43
13 Walker Media 31/12/07 6,705 53.40
14 BLM Holdings 31/12/07 1,573 -27.81
15 I-level 31/03/07 4,158 63.44


MEDIA BUYING AGENCIES
Rank Agency Year end Operating profit
margin on gross income
Latest Previous
(%) (%)
1 Aegis Media1 31/12/06 32.49 31.46
2 Mindshare Media (UK) 31/12/07 14.39 2.09
3 MediaCom UK 31/12/06 27.06 27.61
4 OMD Group 31/12/07 17.25 21.96
5 D'Arcy Masius Benton & Bowles 31/12/07 18.58 23.49
6 ZenithOptimedia 31/12/07 17.94 9.18
7 Mediaedge:cia International 31/12/07 13.53 -25.35
8 PHD Media 31/12/07 14.71 20.85
9 MediaVest (Manchester) 28/02/07 29.85 24.62
10 Mediaedge:cia UK 31/12/07 9.18 5.39
11 Kinetic Worldwide 31/12/07 28.03 34.74
12 MPG 31/12/07 4.45 3.61
13 Walker Media 31/12/07 46.97 41.24
14 BLM Holdings 31/12/07 11.64 20.91
15 I-level 31/03/07 35.63 33.56
1 prev. Aegis Media UK & Ireland


TOP TEN BY OPERATING PROFIT MARGIN ON GROSS INCOME
Rank Company name Latest Previous Change
(%) (%) (%)
1 Albion Brand Communications 39.25 42.56 -7.77
2 Langland Advertising Design & Marketing 31.54 33.81 -6.71
3 Big Communications 30.94 28.59 8.22
4 WFCA Integrated 24.85 29.07 -14.54
5 Bray Leino 24.70 25.40 -2.73
6 Miles Calcraft Briginshaw Duffy 22.57 13.99 61.37
7 Adventis Group plc 20.74 19.10 8.56
8 Abbott Mead Vickers BBDO 20.30 20.36 -0.31
9 VCCP 19.59 19.36 22.00
10 Beattie McGuinness Bungay 19.22 11.79 62.98


TOP TEN BY REVENUE PER HEAD
Rank Company name Latest Previous Change
(pounds) (pounds) (%)
1 The Gate Worldwide 173,211 99,750 73.64
2 Publicis 169,512 171,330 -1.06
3 The Red Brick Road 155,606 128,727 20.88
4 Fallon London 145,953 97,496 49.70
5 Leo Burnett 144,611 157,293 -8.06
6 Mother Advertising 144,361 144,258 0.07
7 J Walter Thompson Group 144,016 154,881 -7.02
8 McCann Erickson Advertising 135,426 123,379 9.76
9 Abbott Mead Vickers BBDO 132,951 130,899 1.57
10 Wieden & Kennedy UK 129,546 88,536 46.32


BOTTOM TEN BY OPERATING PROFIT MARGIN ON GROSS INCOME
Rank Company name Latest Previous Change
(%) (%) (%)
41 Tangible Financial1 5.31 -6.38 183.19
42 The Red Brick Road 5.18 4.04 28.31
43 Advertising Principles (Group) 4.09 5.58 -26.71
44 TBWA\Manchester2 1.18 0.43 177.75
45 Euro RSCG London 1.03 -8.48 112.19
46 Souk Communications -3.78 -4.85 22.07
47 Lowe & Partners -4.42 -28.07 84.27
48 Draft London -22.74 8.25 -375.68
49 St Luke's Communications -52.19 -8.73 -497.53
50 DraftFCB London3 -64.03 -175.54 63.52
1 prev. cchm:ping ; 2 prev. BDH\TBWA; 3 prev. FCB London.


BOTTOM TEN BY REVENUE PER HEAD
Rank Company name Latest Previous Change
(pounds) (pounds) (%)
39 Draft London 68,247 123,671 -44.82
40 St Luke's Communications 68,021 96,125 -29.24
41 Big Communications 62,971 54,257 16.06
42 Bray Leino 62,263 53,196 17.05
43 Golley Slater Group 60,367 52,265 15.50
44 Robson Brown 59,312 57,376 3.37
45 Accord Group1 57,022 56,704 0.56
46 Lawton Communications Group 56,683 39,870 42.17
47 Advertising Principles (Group) 53,259 53,589 -0.62
48 BRAHM 46,778 37,395 25.09
25.09
1 prev. Accord Holdings.


DIGITAL AGENCIES
Rank Agency Year end Gross income
Latest Change
(£000s) (%)
1 Digital Marketing Group plc 31/03/2008 33,079 294.31
2 LBi1 31/12/07 23,395 50.63
3 AKQA 31/12/07 22,813 14.11
4 Latitude Group 31/12/07 10,417 53.33
5 Dare Digital 30/06/07 9,839 75.63
6 Agency.com 31/12/07 9,550 12.80
7 TMN Group plc2 30/04/07 9,080 79.02
8 GT London3 31/12/07 8,904 72.66
9 Agency Republic 31/12/07 8,084 27.43
10 Investis 31/12/07 7,042 30.17
11 Avenue A / Razorfish 31/12/06 6,930 81.18
12 Profero 31/03/07 6,467 39.83
13 Glue London 31/12/06 6,193 38.45
14 Reading Room 31/03/07 5,836 67.32
15 Deal Group Media plc 31/12/07 5,305 -20.52


DIGITAL AGENCIES
Rank Agency Year end Operating profit
Latest Change
(£000s) (%)
1 Digital Marketing Group plc 31/03/2008 2,520 37.18
2 LBi1 31/12/07 2,491 -1.89
3 AKQA 31/12/07 2,360 19.55
4 Latitude Group 31/12/07 1,103 -47.40
5 Dare Digital 30/06/07 1,133 65.40
6 Agency.com 31/12/07 516 -48.61
7 TMN Group plc2 30/04/07 3,272 92.24
8 GT London3 31/12/07 921 35.24
9 Agency Republic 31/12/07 1,258 16.91
10 Investis 31/12/07 968 1,000.00
11 Avenue A / Razorfish 31/12/06 1,484 126.56
12 Profero 31/03/07 343 25.64
13 Glue London 31/12/06 517 58.10
14 Reading Room 31/03/07 529 569.62
15 Deal Group Media plc 31/12/07 -2,414 -7.15


DIGITAL AGENCIES
Rank Agency Year end Operating profit
margin on gross income
Latest Previous
(%) (%)
1 Digital Marketing Group plc 31/03/2008 7.62 21.90
2 LBi1 31/12/07 10.65 16.35
3 AKQA 31/12/07 10.34 9.87
4 Latitude Group 31/12/07 10.59 30.87
5 Dare Digital 30/06/07 11.52 12.23
6 Agency.com 31/12/07 5.40 11.86
7 TMN Group plc2 30/04/07 36.04 33.56
8 GT London3 31/12/07 10.34 13.21
9 Agency Republic 31/12/07 15.56 16.96
10 Investis 31/12/07 13.75 1.63
11 Avenue A / Razorfish 31/12/06 21.41 17.12
12 Profero 31/03/07 5.30 5.90
13 Glue London 31/12/06 8.35 7.31
14 Reading Room 31/03/07 9.06 2.26
15 Deal Group Media plc 31/12/07 -45.50 -33.75
1 prev. Framfab UK; 2 prev. Themutal.net plc; 3 prev. Good Technology.


DIRECT MARKETING/SALES PROMOTION AGENCIES
Rank Agency Year end Gross income
Latest Change
(£000s) (%)
1 Proximity London 31/12/07 29,207 0.65
2 WRC Holdings 31/12/06 28,791 13.92
3 Iris London1 31/12/07 21,367 40.88
4 Gyro International 31/10/07 21,342 45.89
5 EHS Brann 31/12/07 21,025 14.56
6 Tullo Marshall Warren 31/03/2008 17,889 14.51
7 MRM Worldwide (UK) 31/12/07 17,022 -1.18
8 Motivcom plc 31/12/07 16,917 20.61
9 Publicis Dialog 31/12/07 14,951 -10.53
10 Tequila London 31/12/07 14,313 -1.22
11 ARC Integrated Marketing 31/12/07 14,137 -6.26
12 Joshua G22 31/12/07 13,927 -3.01
13 BD Network 31/12/07 13,301 48.13
14 Carlson Marketing Group (UK) 31/12/07 12,918 -6.87
15 Rapier 31/12/07 11,836 -0.02


DIRECT MARKETING/SALES PROMOTION AGENCIES
Rank Agency Year end Operating profit
Latest Change
(£000s) (%)
1 Proximity London 31/12/07 6,005 6.11
2 WRC Holdings 31/12/06 1,921 182.38
3 Iris London1 31/12/07 2,091 100.67
4 Gyro International 31/10/07 786 -52.56
5 EHS Brann 31/12/07 3,308 36.52
6 Tullo Marshall Warren 31/03/2008 2,290 76.97
7 MRM Worldwide (UK) 31/12/07 682 -58.21
8 Motivcom plc 31/12/07 3,305 24.25
9 Publicis Dialog 31/12/07 2,534 -22.32
10 Tequila London 31/12/07 594 263.64
11 ARC Integrated Marketing 31/12/07 -657 -163.17
12 Joshua G22 31/12/07 2,143 129.44
13 BD Network 31/12/07 1,855 450.45
14 Carlson Marketing Group (UK) 31/12/07 -1,336 40.78
15 Rapier 31/12/07 1,523 -34.55


DIRECT MARKETING/SALES PROMOTION AGENCIES
Rank Agency Year end Operating profit
margin on gross income
Latest Previous
(%) (%)
1 Proximity London 31/12/07 20.56 19.50
2 WRC Holdings 31/12/06 6.67 -9.23
3 Iris London1 31/12/07 9.79 6.87
4 Gyro International 31/10/07 3.68 11.33
5 EHS Brann 31/12/07 15.73 13.20
6 Tullo Marshall Warren 31/03/2008 12.80 8.28
7 MRM Worldwide (UK) 31/12/07 4.01 9.47
8 Motivcom plc 31/12/07 19.54 18.96
9 Publicis Dialog 31/12/07 16.95 19.52
10 Tequila London 31/12/07 4.15 -2.51
11 ARC Integrated Marketing 31/12/07 -4.65 6.90
12 Joshua G22 31/12/07 15.39 6.50
13 BD Network 31/12/07 13.95 3.75
14 Carlson Marketing Group (UK) 31/12/07 -10.34 -16.26
15 Rapier 31/12/07 12.87 19.66
1 prev. Iris Nation; 2 prev. Joshua Agency plc.


TOP TEN BY EMPLOYMENT COSTS PER HEAD
Rank Company name Latest Previous Change
(pounds) (pounds) (%)
1 The Red Brick Road 114,258 125,660 -9.07
2 Publicis 97,072 77,081 25.93
3 DraftFCB London1 89,491 70,101 27.66
4 Mother Advertising 85,526 74,667 14.54
5 J Walter Thompson Group 81,403 85,957 -5.30
6 Fallon London 77,827 77,574 0.33
7 The Gate Worldwide 74,474 72,753 2.36
8 Wieden & Kennedy UK 74,093 74,041 0.07
9 Leo Burnett 72,303 69,224 4.45
10 TBWA\London 71,136 65,979 7.82
1 prev. FCB London.


BOTTOM TEN BY EMPLOYMENT COSTS PER HEAD
Rank Company name Latest Previous Change
(pounds) (pounds) (%)
39 Adventis Group plc 45,000 49,765 -9.57
40 Cheethambell JWT 41,357 45,163 -8.43
41 Robson Brown 38,581 35,062 10.04
42 Lawton Communications Group 38,366 35,071 9.40
43 Golley Slater Group 37,187 38,645 -3.77
44 Advertising Principles (Group) 37,134 39,213 -5.30
45 Bray Leino 34,234 33,661 1.70
46 Big Communications 34,214 36,729 -6.85
47 BRAHM 32,584 32,407 0.55
48 Accord Group1 25,468 32,508 -21.66
1 prev. Accord Holdings.


HIGHEST-PAID PLC DIRECTORS
Rank Group Director Latest Previous Chg
(£000s) (%)
1 WPP Group plc Sir Martin Sorrell 3,973 3,631 9.4
2 Aegis Group plc Robert Lerwill* 1,476 1,376 7.3
3 Digital Marketing
Group plc Ben Langdon 1,120 238 370.6
4 Huntsworth plc Lord Chadlington 1,056 1,078 -2.0
5 Chime Communications
plc Lord Bell 967 919 5.2
6 Taylor Nelson Sofres
plc David Lowden 928 487 90.6
7 Creston plc Don Elgie 741 680 9.0
8 Media Square plc Roger Parry 575 398 44.5
9 M&C Saatchi plc Jerry Wales 508 424 19.8
10 Adventis Group plc Undisclosed 317 248 27.8
* has since left the agency.


HIGHEST-PAID INDEPENDENT AGENCY DIRECTORS
Rank Group Director Latest Previous Chg
(£000s) (%)
1 Bartle Bogle Hegarty Undisclosed 649 715 -9.23
2 The Red Brick Road Undisclosed 487 451 7.98
3 Wieden & Kennedy UK Undisclosed 438 289 51.56
4 Mother Advertising Undisclosed 428 393 8.91
5 Accord Group1 Undisclosed 425 514 -17.32
6 WCRS Undisclosed 365 365 0.00
7 CHI & Partners2 Undisclosed 343 507 -32.35
8 Leagas Delaney Undisclosed 295 287 2.79
9 Robson Brown Undisclosed 248 188 31.91
10 Advertising Principles
(Group) Undisclosed 200 227 -11.89
1 prev. Accord Holdings; 2 prev. Clemmow Hornby Inge.


QUOTED GROUPS
Rank Agency Year end Gross income
Latest Change
(£000s) (%)
1 WPP Group plc 31/12/07 5,850,400 4.27
2 Aegis Group plc 31/12/07 946,600 11.09
3 Taylor Nelson Sofres plc 31/12/07 768,700 6.72
4 Huntsworth plc 31/12/07 152,271 8.96
5 Chime Communications plc 31/12/07 97,268 23.41
6 M&C Saatchi plc 31/12/07 87,620 15.45
7 Media Square plc 28/02/2008 84,080 -18.39
8 Creston plc 31/03/2008 80,516 15.58
9 Next Fifteen Comms Group plc 31/07/07 59,268 5.82
10 Cello Group plc 31/12/07 56,812 46.30

QUOTED GROUPS
Rank Agency Year end Operating profit
Latest Change
(£000s) (%)
1 WPP Group plc 31/12/07 899,200 6.70
2 Aegis Group plc 31/12/07 145,000 6.62
3 Taylor Nelson Sofres plc 31/12/07 114,800 6.10
4 Huntsworth plc 31/12/07 22,671 12.12
5 Chime Communications plc 31/12/07 16,099 29.31
6 M&C Saatchi plc 31/12/07 10,222 62.93
7 Media Square plc 28/02/2008 -245 -103.29
8 Creston plc 31/03/2008 12,686 23.02
9 Next Fifteen Comms Group plc 31/07/07 5,870 29.84
10 Cello Group plc 31/12/07 5,588 48.03

QUOTED GROUPS
Rank Agency Year end Operating profit
margin on gross income
Latest Previous
(%) (%)
1 WPP Group plc 31/12/07 15.37 15.02
2 Aegis Group plc 31/12/07 15.32 15.96
3 Taylor Nelson Sofres plc 31/12/07 14.93 15.02
4 Huntsworth plc 31/12/07 14.89 14.47
5 Chime Communications plc 31/12/07 16.55 15.80
6 M&C Saatchi plc 31/12/07 11.67 8.27
7 Media Square plc 28/02/2008 -0.29 7.23
8 Creston plc 31/03/2008 15.76 14.80
9 Next Fifteen Comms Group plc 31/07/07 9.90 8.07
10 Cello Group plc 31/12/07 9.84 9.72

This article was first published on campaignlive.co.uk

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