DIRECT MARKETING: TOP OF THE DM WORLD - Willott Kingston Smith’s league table of direct marketing agencies provides an insight into the globalisation of DM. Eleanor Trickett investigates

Direct marketing is, in most areas, catching up with advertising.

Direct marketing is, in most areas, catching up with

advertising.



An exception, however, is in the matter of globalisation - direct

marketing has not yet seen the same widespread moves towards the

consolidation of international business into single agency networks as

above the line.



But this is gradually changing and a number of high-profile direct

marketing agencies already handle global clients across a network. The

likes of OgilvyOne and WWAV Rapp Collins - who feature at the top of

Willott Kingston Smith’s league table - with clients such as IBM and

American Express, for example, find their situation is a direct

reflection of that above the line.



Grey Group is another that has a strong international direct marketing

presence. Jeremy Sankey, the strategic planning director of Grey Direct

Australia, says: ’We are seeing the spread of global relationships.

Companies want to build relationships with consumers as the benefits of

direct contact are understood and other factors drive them to seek new

ways of reaching their market.’



However, for many clients, local offices still call the shots below the

line, the justification for this being that, with one-to-one marketing,

subtle cultural nuances come into play.



It’s also harder to obtain economies of scale from a global

below-the-line campaign, compared to an ad campaign. Market-by-market

database interrogation, for a start, doesn’t come as cheap as bulk

buying TV spots from a centralised media-buying point.



’The thing that compels centralised advertising and media is that it’s

easy to achieve savings,’ says Terry Hunt, chairman of Evans Hunt Scott,

which is part of the Havas group. ’Until the day when you get the super,

all-embracing database - which will come - you have no real reason for

doing it.’



Just because an agency or network has a piece of business in multiple

markets, it doesn’t necessarily mean that such clients can be called

network clients, Hunt says. ’You can get pseudo-globalisation. Take one

of our clients, Microsoft: it looks like a global client because various

Havas agencies have Microsoft on the books, but individually they pitch

for, win and run the business. There is very little sharing of work and

information - the business just happens to be in the same group.’



Despite barriers to a global direct marketing culture, the big networks

are shoring up their global presence. Three manifestations of this can

be seen in the UK: sister agencies within a network being merged;

independent agencies being snapped up and advertising agencies with no

direct marketing presence in the UK launching below-the-line

offshoots.



BMP DDB joined forces with Claydon Heeley to bolster its 45-strong

direct marketing outfit, Jones Mason Barton Antenen; M&C Saatchi took on

Craik Jones’s Lisa Thomas and IMP’s David Harris to form its as-yet

unnamed below-the-line operation, and Leo Burnett, though still looking

for a managing director for Leonardo, went direct with Saatchi &

Saatchi’s Gary Sharpen and HHCL & Partners’ Mark Piper.



There has also been plenty of tidying up in the UK. Some moves were

obvious and logical: BDDP’s Tequila Option One merging with TBWA’s Payne

Stracey went some way to making sense of the many tentacles of Omnicom’s

below-the-line interests over here.



Another predictable merger this year was within the Grey network: the

’so obvious, so why didn’t they do it earlier?’ merger of Grey Direct

with Grey Integrated. However, the new agency, Joshua, has suffered

somewhat since its launch. Not only has a large number of people quit,

but it also lost its prize Toyota business to WWAV recently.



Brann, part of the Snyder group, is working on building its network and

last year took on WCJ’s former managing director, John Shaw, to lead the

acquisition trail in Europe. The London operation was recently merged

with Brann SJA, which it acquired last year.



The plan is to create a ’centre of excellence’ for a worldwide

brand.



Havas rebranded its global diversified agency services under the Sales

Machine banner, and acquired the Lopex Group in the UK. Merging KLP with

Euro RSCG Direct also gave Euro RSCG Wnek Gosper a stronger potential

direct marketing partner.



Global changes were also afoot within the True North group, with all of

its below-the-line interests being rebranded under the Marketing Drive

brand.



The recent news of its parent network, Bozell’s merger with sister

network FCB Direct, however, leaves open some possibilities. FCB Direct

has not yet made an impact on the UK market, despite its enormous

success elsewhere.



But its worldwide president and chief operating officer, Stewart

Pearson, has relocated to the UK to work on changing that.



With the Canadian group, Mosaic, stepping up its presence in the UK by

acquiring ZGC and Stretch the Horizon, the already-dwindling number of

UK independents was further diminished. That said, there is still a

number of agencies that are resolutely independent, including, for the

moment at least, DP&A and Tullo Marshall Warren. Recent start-ups have

also tended to be majority owned by their partners, meaning that the

growing shops such as HPT Brand Response and Archibald Ingall Stretton

are theoretically open to suitors.



Although the marketing services groups are working hard to beef up their

presence in the UK market, there is also a handful of UK agencies that

are keen to spread their brand outwards, especially into the US.

Omnicom-owned Barraclough Hall Woolston Gray may have had a few false

starts in its planned expansion into New York, but the project still has

life in it. A European network is also in development, to be run by

Simon Hall.



BHWG’s cousin, Claydon Heeley, is also keen on the US, though the joint

chief executive, Jon Claydon, has his reservations about the making of

such a transition. ’We don’t believe we have the time to do it

organically. It would be too slow, and questionable in a market that is

already over supplied.Therefore the strategy is either affiliate or

buy.’



The UK, of course, has its fair share of big agencies which, as ever,

dominate the league tables. Most of them are now part of bigger

marketing services groups. But the top ten has changed little over the

past couple of years, apart from the odd blip such as Evans Hunt Scott

stealing a march on OgilvyOne and swapping places with it.



Willott Kingston Smith’s league table, as in previous years, depends on

agencies providing meaningful accounts. As before there are omissions

where, for example, the sums are submerged in holding group figures.

With those provisos, Steve Waring, partner at WKS notes that there’s

room for optimism this year, with average operating profit up from 12.1

per cent to 14.2 per cent. It’s a far cry from the 6.5 per cent for the

top 50 ad agencies.



’One of the other facts coming out of this year’s survey,’ says Waring,

’is that, of the top 40 companies, only four are privately owned UK

companies. Of the remainder, 21 are owned by UK-quoted groups, 12 are US

owned, two are French owned and one is Canadian owned.’



The US-owned WWAV Rapp Collins, as ever, stays in the number-one spot, a

long way ahead of its nearest rival, Carlson, which leap-frogged over

Brann to take the number-two spot.



Wunderman Cato Johnson, however, claims that the number-two spot is

rightfully its and is keen to have its figures separated from those of

its parent, Young & Rubicam, in time for next year’s table. The managing

director, Richard Bagnall-Smith, says that its turnover last year was

pounds 53 million, and that it would top the income table, with pounds

28 million.



WCJ’s network, in part held together by the enormous Citibank business,

now boasts 95 offices in 42 countries, with global billings of dollars

2.4 billion.



Meanwhile, OgilvyOne calls itself the ’strongest, most experienced

direct marketing network in the world’ with 100 offices in 47 countries,

and billings of over dollars 1.6 billion. Its global clients include

American Express, IBM and Nestle.



The Tequila network is one of the younger pretenders to the global

direct marketing throne. It has a presence in 15 countries and dollars

390 million billings.



It cites its relative youth as an advantage. Chris Nicholls, the

business development director at Tequila, points out: ’Because we have

grown rapidly in the past few years, we have been able to establish

ourselves in an environment free from the baggage of old-fashioned

business methods. With us, our clients are just as likely to get an

e-based solution as a promotional or classic direct marketing

solution.’



But some are cynical about how ’network’ most agency brands really

are.



Peter Crossing, formerly the chairman of the Bates network’s hugely

successful global sales promotion brand, 141, says: ’There are few truly

global below-the-line networks; what tends to happen is that they are

client-driven. No-one would have a global office in Vietnam unless there

was a client there, which is why networks are patchy, being largely

driven by clients’ distribution.’



It cannot be denied, however, that there are some heavyweight, global

direct marketing agency brands in place - models on which the younger

pretenders can model themselves. Claydon concludes: ’The big ones will

survive: Rapp Collins, Bronner, OgilvyOne. They are known, big, safe,

resources. Because clients in direct marketing are frequently

reassurance purchasers - they want safety first because they don’t

understand the function - the known brands will always have a fighting

chance.’



PLAYING HARD TO GET: THE TOP REMAINING INDEPENDENT BELOW-THE-LINE

AGENCIES IN THE UK



Archibald Ingall Stretton launched last August and now employs up to 25

staff. The Havas-backed agency has three very different partners: Stuart

Archibald, formerly the director of BMP DDB’s direct marketing venture;

Evans Hunt Scott’s former managing director, Jon Ingall, and Steve

Stretton, a creative. Clients include Sky, the Body Shop and Virgin

Net.



CMB, formerly Clark McKay Buckingham, is 14 years old and minority owned

by WWAV Rapp Collins. Headed up by Jonathan Clark, who brings an

above-the-line background to the mix, the agency’s clients include

Hyundai, London Electricity and this year’s big win, Legal &

General.



Cramm Francis Woolf was set up in 1993, with the legendary Brian Francis

at the helm. Instrumental in setting up IMP 25 years ago and then FKB

more recently, Francis pulled in Ogilvy & Mather’s Paul Woolf and

graphic designer, David Cramm, and the agency now counts American

Express, BT and the BBC among its clients. Growth is planned, but its

independence remains important to it.



DP&A was set up by David Poole, Dan Douglass and Tony Appi in 1996

following a management buy-out from the direct arm of the defunct Leagas

Shafron Davis. The agency handles clients such as Goldfish and Orange.

DP&A recently set up a joint venture with Zenith Media, called Zed.



HPT Brand Response, launched last spring, is headed up by the

heavyweight threesome, Steve Harrison, the former creative director of

OgilvyOne, BT client,Tim Patten, and Bates Communications’ managing

director, Martin Troughton. Backed by Rainey Kelly Campbell Roalfe, the

agency fits in well with Rainey Kelly’s ideas-first philosophy, working

for Virgin Atlantic, the COI and Royal & Sun Alliance, among others.



Judith Donovan Associates, the agency of Judith Donovan CBE, was set up

in 1982 and as well as being a top-30 direct marketing shop, it is also

known as a tub-thumper for industry issues. The UK representative to the

International Direct Marketing Association, the agency handles business

for Apax Partners and Reed Travel Group, among others. Remains

resolutely independent.



Rapier, formerly Rapier Stead & Bowden, was launched in 1989 from the

ashes of a management buyout from the Charles Barker group. Now just one

founding director, Jonathan Stead, remains. Rapier leapt into the

limelight when it defeated the big boys in the epic Cable & Wireless

pitch two years ago, and is now working hard at establishing a

reputation as a creative and strategically effective integrated agency

beyond that one flagship client.



Triangle, now past its 21st birthday, is essentially a sales promotion

agency, but has been moving in on various direct marketing projects for

its clients over the past few years. Still headed up by founder Kevin

Twittey, the agency recently had several false starts in terms of

selling up. Cadbury, Safeway and Guinness are among its clients.



Tullo Marshall Warren set up in 1987, and all three partners - creative

Paul Tullo, plus Richard Marshall and Chris Warren - are still very much

in evidence. Though most agencies outside the famous few claim they are

the ’best-kept secret in direct marketing’, TMW perhaps most deserves

the mantle. The likes of BA, Shell, Barclays and the mighty P&G

obviously think so. It is the UK representative of the global

InterDirect Network, a collection of independent direct marketing

agencies.



TOP 40 DIRECT MARKETING AND SALES PROMOTION AGENCIES BY GROSS INCOME,

RANKED BY TURNOVER

Rank/agency name      Owner            year end  year end  turnover

                                       latest    previous    latest

                                                             pounds

                                                                000

1  WWAV Rapp Collins  Omnicom          31.12.98  31.12.97    71,374

2  Carlson Marketing  Carlson          31.12.98  31.12.97    49,043

   Group

3  Brann              Snyder           31.12.97  31.12.96    43,782

                      Communications

4  Colleagues Group   Moore            31.12.98  31.12.97    43,501

                      Corporation

5  IMP Group          MacManus         31.12.97  31.12.96    41,874

6  Evans Hunt Scott   Havas            31.12.97  31.12.96    36,831

   Eurocom

7  OgilvyOne          WPP              31.12.98  31.12.97    28,994

   Worldwide

8  Barraclough Hall   Omnicom          31.12.98  31.12.97    25,308

   Woolston Gray

9  The Marketing      part of          31.12.97  31.12.96    20,756

   Organisation       independent

                      group

10 Grey Direct        Grey             30.09.97  30.09.96    19,951

11 Joshua             Grey             30.09.98  30.09.97    19,515

12 Tequila UK         Omnicom          30.04.98  31.12.96    18,164

13 WWAV Rapp          Omnicom          31.12.97  31.12.97    17,018

   Collins North

14 Purchasepoint      Lopex            31.12.97  31.12.96    15,926

   Group

15 The Triangle       independent      31.12.97  31.12.96    14,747

   Group

16 Interfocus         Interpublic      31.12.97  31.12.96    13,822

   Network

17 Citigate Albert    Incepta          28.02.98  30.09.96    13,582

   Frank

18 Payne Stracey      Omnicom          31.12.97  31.12.96    13,058

19 Clarke Hooper      Omnicom          31.12.97  31.12.96    12,504

   Consulting

20 GGT Direct         Omnicom          30.04.98  30.04.97    10,439

21 Judith Donovan     independent      31.12.97  31.12.96    10,283

   Associates

22 Claydon Heeley     Omnicom          31.12.97  31.12.96    10,120

   International

23 Rapier             part of          31.12.97  31.12.96     9,822

                      independent

                      group

24 1995 Ventures      part of          31.12.98  31.12.97     9,684

                      independent

                      group

25 Marketing          WPP              30.09.98  30.09.97     9,457

   Perspectives

26 Craik, Jones,      Omnicom          31.12.97  31.12.96     8,880

   Watson, Mitchell,

   Voelkel

27 The BLP            Haygarth Group   31.03.98  31.03.97     8,523

   Consultancy

28 Loncrest           Havas            31.12.97  31.12.96     8,509

29 CBH & Partners     CBH Holdings     31.12.96  31.12.95     8,461

30 Target Direct      part of          31.08.98  31.08.97     8,293

   Marketing          independent

                      group

31 The Marketing      The Marketing    31.12.97  30.04.97     7,866

   Store (Hertford)   Store Worldwide

32 Stretch the        Mosaic           31.12.97  31.12.96     7,654

   Horizon

33 Team LGM           Incepta          28.02.99  28.02.98     6,902

34 Promotional        WPP              31.12.97  31.12.96     6,123

   Campaigns

35 MBO                Lopex            31.12.97  31.12.96     5,987

36 141                Cordiant Group   31.12.97  31.12.96     5,556

37 Lowe Direct        Interpublic      31.12.97  31.12.96     5,530

38 Tullo Marshall     independent      31.12.97  31.12.96     5,373

   Warren

39 Dynamo Marketing   independent      31.03.98  31.03.97       n/s

40 Marketing Drive    True North       31.12.97  31.12.96       n/s

Rank/agency name       turnover         %  pre-tax   pre-tax

                       previous    change  profits   profits

                         pounds             latest  previous

                            000             pounds    pounds

                                               000       000

1  WWAV Rapp Collins     65,444      9.06    4,622     4,257

2  Carlson Marketing     43,408     12.98    2,542       948

   Group

3  Brann                 41,922      4.44    2,529       214

4  Colleagues Group      37,297     16.63    1,775     2,148

5  IMP Group             35,701     17.29    1,581     1,493

6  Evans Hunt Scott      28,329     30.01    1,300     1,141

   Eurocom

7  OgilvyOne             32,866    -11.78    2,364     1,745

   Worldwide

8  Barraclough Hall      26,395     -4.12%   2,010     2,160

   Woolston Gray

9  The Marketing         23,093    -10.12      659       447

   Organisation

10 Grey Direct           16,737     19.20       63       313

11 Joshua                20,702     -5.73      810     1,528

12 Tequila UK            11,393     59.43    1,143       466

13 WWAV Rapp             13,184     29.08      524       463

   Collins North

14 Purchasepoint         18,403    -13.46      324       348

   Group

15 The Triangle          13,663      7.93      582       740

   Group

16 Interfocus             8,129     70.03    1,681       758

   Network

17 Citigate Albert        7,758     75.07      658        93

   Frank

18 Payne Stracey          8,243     58.41      836      -315

19 Clarke Hooper         12,414      0.72    1,059       533

   Consulting

20 GGT Direct             8,715     19.78      485      -187

21 Judith Donovan         8,067     27.47      410       435

   Associates

22 Claydon Heeley         7,800     29.74    1,050       415

   International

23 Rapier                 3,953    148.47    1,160       477

24 1995 Ventures         10,030     -3.45      504       487

25 Marketing              5,848     61.71      665       155

   Perspectives

26 Craik, Jones,          6,893     28.83        7       461

   Watson, Mitchell,

   Voelkel

27 The BLP                6,952     22.60      874       775

   Consultancy

28 Loncrest               8,239      3.28      211       588

29 CBH & Partners         8,382      0.94      435       497

30 Target Direct          7,217     14.91      215       291

   Marketing

31 The Marketing          8,800    -10.61      152       147

   Store (Hertford)

32 Stretch the            7,459      2.61      723       605

   Horizon

33 Team LGM               6,363      8.47      279       283

34 Promotional            9,679    -36.74     -196       577

   Campaigns

35 MBO                    5,559      7.70      708       541

36 141                    5,009     10.92      842       644

37 Lowe Direct            2,955     87.14      150      -777

38 Tullo Marshall         4,884     10.01      145       534

   Warren

39 Dynamo Marketing         n/s      -         159       254

40 Marketing Drive          n/s      -       1,101       428

Rank/agency name                %  turnover  turnover        %

                           change       per       per   change

                                       head      head

                                     latest  previous

1  WWAV Rapp Collins        8.57%   274,515   247,894    10.74

2  Carlson Marketing      168.14%   134,364   121,591    10.51

   Group

3  Brann                 1081.78%    53,458    56,882    -6.02

4  Colleagues Group       -17.36%   348,008   282,553    23.17

5  IMP Group                5.89%   282,932   266,425     6.20

6  Evans Hunt Scott        13.94%   216,653   208,301     4.01

   Eurocom

7  OgilvyOne               35.47%   204,183   252,815   -19.24

   Worldwide

8  Barraclough Hall        -6.94    129,122   153,459   -15.86

   Woolston Gray

9  The Marketing           47.43    193,981   215,822   -10.12

   Organisation

10 Grey Direct            -79.87    376,434   380,386    -1.04

11 Joshua                 -46.99    165,381   207,020   -20.11

12 Tequila UK             145.28    248,822   356,031   -30.11

13 WWAV Rapp               13.17    354,542   321,561    10.26

   Collins North

14 Purchasepoint           -6.90    124,422   106,376    16.96

   Group

15 The Triangle           -21.35    103,126    85,394    20.77

   Group

16 Interfocus             121.77    251,309   232,257     8.20

   Network

17 Citigate Albert        607.53    266,314   337,304   -21.05

   Frank

18 Payne Stracey         -365.40    171,816   183,178    -6.20

19 Clarke Hooper           98.69    235,925   248,280    -4.98

   Consulting

20 GGT Direct            -359.36    179,983   167,596     7.39

21 Judith Donovan          -5.75    158,200   146,673     7.86

   Associates

22 Claydon Heeley         153.01    136,757   139,286    -1.82

   International

23 Rapier                 143.19    196,440   127,516    54.05

24 1995 Ventures            3.49    225,209   345,862   -34.88

25 Marketing              329.03    193,000   132,909    45.21

   Perspectives

26 Craik, Jones,          -98.48    227,692   202,735    12.31

   Watson, Mitchell,

   Voelkel

27 The BLP                 12.77    266,344   231,733    14.94

   Consultancy

28 Loncrest               -64.12    102,518    95,802     7.01

29 CBH & Partners         -12.47    112,813   121,478    -7.13

30 Target Direct          -26.12    129,578   122,322     5.93

   Marketing

31 The Marketing            3.40    271,241   169,231    60.28

   Store (Hertford)

32 Stretch the             19.50    239,188   240,613    -0.59

   Horizon

33 Team LGM                -1.41    135,333   171,973   -21.31

34 Promotional           -133.97    105,569   144,463   -26.92

   Campaigns

35 MBO                     30.87     47,896    47,922    -0.06

36 141                     30.75    101,018    98,216     2.85

37 Lowe Direct           -119.31    153,611   164,167    -6.43

38 Tullo Marshall         -72.85    111,938   135,667   -17.49

   Warren

39 Dynamo Marketing       -37.40        n/s       n/s     -

40 Marketing Drive        157.24        n/s       n/s     -



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1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).