On the face of things, it has been a dull year for direct
marketing.
Last year there were big mergers and shakeouts that changed the look of
the league table. This year has been less about acquisition and
consolidation but there have, nonetheless, been some interesting
highlights.
The table, provided by Willott Kingston Smith, is by no means perfect
(it involves comparing data from different periods, for instance) but it
gives us a good snapshot of the agency landscape.
Brann takes the top spot despite modest growth because WWAV Rapp Collins
has slipped, with a turnover downturn of 18 per cent. However, WWAV's
figures are almost two years old now and cannot be seriously compared
with those from rival agencies.
The growth of interactive helped OgilvyOne to a strong performance.
However, the downturn in interactive work this year may affect this. For
this reason, expect Wheel Group, an interactive group that owns Pres.co
and Foresight, to post lower growth next time after shooting in at
number four.
Nigel Howlett, the chairman of OgilvyOne, says: "It has been a strange
year. Primarily, there has been a significant but healthy transition in
the interactive space. We had a hugely successful fourth quarter (in
2000), but then there has been a major adjustment this year. Overall for
this year, interactive will still grow for us by 20 per cent. We have
had to make redundancies but this is due to differences quarter on
quarter."
Chris Gordon, the chairman and chief executive of WWAV Rapp Collins
Group, also says there has been a slowdown in the agency's digital
business.
However, he says that Zalpha, its consultancy arm, has compensated with
growth of between 30 and 40 per cent. "Given the current climate, things
are going surprisingly well. But will this continue? I don't really
know."
Others are less optimistic. Jon Claydon, the chairman of Claydon Heeley
Jones Mason, says: "It has been a difficult year; 2000 was a bit of an
aberration and the shakeout needed to happen. The client side has
tightened up, with the procurement guys walking around and trying to
make cuts."
While there have been fewer mergers this year, two significant players -
Black Cat and Triangle - were snapped up. J. Walter Thompson and
Publicis respectively saw the need to buy into specialist direct
marketing and sales promotion knowledge.
Perhaps the most intriguing move of the year was WPP's decision to shed
the Impiric brand and return to good old Wunderman. This followed the
acquisition in the UK of HPT Brand Response, one of the most creative
independent agencies, by Impiric.
It seems the switch back to Wunderman was driven by a concern that the
Impiric venture had gone too far in its obsession with management
consultancy culture. So is this the current problem with direct
marketing? Simon Marshall, the managing director of Publicis Dialog,
says: "I think what I'd like to see is the industry rediscovering
creativity as a debate. The high-water mark of discussion until three
months ago was consultancy and CRM. While this is important, I think
creativity and creative engagement is what it should be about."
Many on awards juries would testify that the overall standard of direct
marketing creative has improved over the past year. John Townshend, the
creative director of Rapier, says: "Generally, creative quality is
improving. There are many more highlights and this is down to the proper
craftsmen and good thinkers now working in direct marketing."
Certainly, some of the creative produced in the past year (such as
Archibald Ingall Stretton's Skoda work, Rapier's ntl creative, Lowe
Live's Saab campaigns, Harrison Troughton Wunderman's Vodafone activity
and Craik Jones Watson Mitchell Voelkel's Gordon's Gin mailings) is
setting new standards.
An emerging trend is the use of mixed media in direct marketing
campaigns, which has the effect of blurring the boundaries between
traditional advertising, direct and ambient. The industry can, perhaps,
learn some lessons from the fact that two of the most awarded direct
marketing campaigns of the year - Saatchi & Saatchi's Monster.co.uk work
and Mother's Brit Art outdoor activity - were produced by ad
agencies.
Townshend says: "In the use of direct media, there is this emerging
contrast between businesslike direct marketing and thinking a bit more
broadly. The biggest problem is that agencies and work are still put in
a box and, as a result, it's still very difficult to find an agency that
understands the business end of direct marketing but has the best
planning and creative in London."
Simon Kershaw, the creative director at Craik Jones Watson Mitchell
Voelkel, sees a lot of evidence of a rapidly maturing industry:
"Creative opportunities now involve bigger overall budgets and
multimedia campaigns. The days of the scrappy, one-off 'mailshot' seem
to be over for good."
He adds: "Creatives in DM are involved more deeply with the client's
other lead agencies. There is integration at a deeper level and earlier
stage in the process - it's not just about folding the ad and sticking
it into an envelope."
David Harris, the creative director at LIDA, says there is room for
improvement in many agencies. "My big thing is the continuing lack of
craft skills. The whole breaking down of barriers between disciplines is
a good thing but it does mean that sometimes you lose the craft skills,
especially in writing."
Harris adds: "I think clients are demanding that standards improve.
People pay us for our skills and we're not living up to it."
A warning, then, that agencies cannot yet rest on their creative
laurels.
The table also shows some worrying signs for direct marketing agencies
in that five post a downturn in turnover even though their figures don't
take into account the turbulent events of 2001. Many of the top 20 are
predicting growth but are downscaling their expectations closer to
single figures, rather than 20 per cent.
Agency chiefs say that in the short term, the economic climate is
stifling growth and development of new services. However, Gordon says:
"Nobody is looking beyond the next six months but, in the longer term,
the focus will be on the digitalisation of clients' businesses and
evolving better CRM solutions. These are still the key definers of
future success."
Howlett agrees. He says: "There will be growth in practical, actionable
CRM consultancy management. Everybody knows the theoretical benefits but
now clients are asking 'how can I do it?', and 'where are the provable
benefits to my board or fellow board members?'."
Claydon takes a different view. He says: "The client take on the world
is they want a very fast service that is results-orientated. They need
results and they need them quickly. Highfalutin' is not where they're
at. The move upstream is all very well but clients are talking fast
turnaround and cost-based activity."
If this is the case, it will be a difficult few months ahead.
COMPANY NAME PARENT COMPANY Year end
1 Brann Snyder
Communications 31/12/99
2 OgilvyOne Worldwide WPP Group 31/12/00
3 Carlson Marketing
Group (UK) Carlson (USA) 31/12/00
4 Wheel Group Primedia 30/6/00
5 WWAV Rapp Collins Omnicom Group 31/12/99
6 IMP Bcom3 Group 31/12/99
7 Ehsrealtime Havas Advertising 31/12/99
8 Joshua Agency Grey Global Group 30/9/00
9 The Marketing Store
Worldwide The Havi Group 31/12/99
10 Colleagues Group Moore Corp
(Canada) 31/12/99
11 TBWA/GGT Direct Omnicom Group 31/12/99
12 Claydon Heeley Jones
Mason Omnicom Group 31/12/99
13 The Triangle Group Publicis Group 31/12/99
14 Haygarth Group None 31/3/00
15 FFWD Precision
Marketing Hawkeye
Communications 31/12/00
16 KLP Havas Advertising 31/12/99
17 The Marketing
Organisation None 31/12/00
18 Perspectives Red Cell WPP 31/12/99
19 Craik Jones Watson
Mitchell Voelkel Omnicom Group 31/12/00
20 BHWG Proximity Omnicom Group 31/12/99
COMPANY NAME Turnover Turnover Change
- latest - previous (%)
(£000) (£000)
1 Brann 48,543 47,706 1.75
2 OgilvyOne Worldwide 52,743 43,345 21.68
3 Carlson Marketing
Group (UK) 45,521 66,167 -31.20
4 Wheel Group 48,468 41,396 17.08
5 WWAV Rapp Collins 57,966 71,374 -18.79
6 IMP 31,650 36,200 -12.57
7 Ehsrealtime 34,480 32,962 4.61
8 Joshua Agency 31,769 38,005 -16.41
9 The Marketing Store
Worldwide 25,106 22,752 10.35
10 Colleagues Group
54,910 43,501 26.23
11 TBWA/GGT Direct 17,762 11,406 55.73
12 Claydon Heeley Jones
Mason 16,195 16,178 0.11
13 The Triangle Group 18,192 17,989 1.13
14 Haygarth Group 16,285 14,883 9.42
15 FFWD Precision
Marketing 10,839 5,037 115.19
16 KLP 16,651 20,007 -16.77
17 The Marketing
Organisation 40,045 26,447 51.42
18 Perspectives Red Cell 15,386 9,457 62.69
19 Craik Jones Watson
Mitchell Voelkel 14,380 10,247 40.33
20 BHWG Proximity 33,813 25,308 33.61
COMPANY NAME Gross income Gross income Change
- latest - previous (%)
(£000) (£000)
1 Brann 38,596 36,990 4.34
2 OgilvyOne Worldwide 28,060 21,244 32.08
3 Carlson Marketing
Group (UK) 27,691 29,347 -5.64
4 Wheel Group 25,790 21,433 20.33
5 WWAV Rapp Collins 21,313 21,934 -2.83
6 IMP 13,188 12,251 7.65
7 Ehsrealtime 12,678 12,810 -1.03
8 Joshua Agency 12,645 13,012 -2.82
9 The Marketing Store
Worldwide 11,862 10,503 12.94
10 Colleagues Group 10,234 9,172 11.58
11 TBWA/GGT Direct 10,105 6,204 62.87
12 Claydon Heeley Jones
Mason 9,314 8,419 10.63
13 The Triangle Group 9,314 9,220 1.02
14 Haygarth Group 8,814 7,278 21.10
15 FFWD Precision
Marketing 8,493 3,676 131.04
16 KLP 8,381 8,417 -0.43
17 The Marketing
Organisation 8,037 6,474 24.14
18 Perspectives Red Cell 7,039 4,477 57.23
19 Craik Jones Watson
Mitchell Voelkel 6,704 4,298 55.98
20 BHWG Proximity Not reported Not reported n/a
COMPANY NAME Pre-tax profit Pre-tax profit Change Number
- latest - previous (%) of staff
pounds (000) pounds (000)
1 Brann 2,537 4,210 -39.74 913
2 OgilvyOne Worldwide 4,620 3,851 19.97 328
3 Carlson Marketing
Group (UK) 1,316 5,879 -77.62 588
4 Wheel Group 658 -2,811 -123.41 951
5 WWAV Rapp Collins 4,364 4,951 -11.86 240
6 IMP 1,143 1,916 -40.34 168
7 Ehsrealtime 1,404 1,111 26.37 170
8 Joshua Agency 427 794 -46.22 205
9 The Marketing Store
Worldwide 470 -120 -491.67 187
10 Colleagues Group 3,325 2,092 58.94 121
11 TBWA/GGT Direct 680 339 100.74 121
12 Claydon Heeley Jones
Mason 3,233 2,323 39.17 113
13 The Triangle Group 542 614 -11.73 1,165
14 Haygarth Group 2,245 1,535 46.25 109
15 FFWD Precision
Marketing 1,370 767 78.62 127
16 KLP 823 661 24.51 138
17 The Marketing
Organisation 1,598 971 64.57 130
18 Perspectives Red Cell 1,774 670 164.78 73
19 Craik Jones Watson
Mitchell Voelkel 1,288 311 314.15 52
20 BHWG Proximity 2,012 2,134 -5.72 207
Source: Willott Kingston Smith.
