DIRECT MARKETING: TOP 30 DIRECT MARKETING AGENCIES - DM giant WWAV Rapp Collins retains its number one slot despite a pounds 7 million fall in turnover in 1996. Pippa Considine reports

Being top of the pile in the world of direct marketing is becoming increasingly worthwhile - it’s an industry that is now worth pounds 6.1 billion. WWAV Rapp Collins retains first place in the annual survey of the top 30 agencies by the accountancy firm, Willott Kingston Smith. There is only one independent agency in the top ten.

Being top of the pile in the world of direct marketing is becoming

increasingly worthwhile - it’s an industry that is now worth pounds 6.1

billion. WWAV Rapp Collins retains first place in the annual survey of

the top 30 agencies by the accountancy firm, Willott Kingston Smith.

There is only one independent agency in the top ten.



This is the second year direct marketing and sales promotion have been

assessed together in the WKS table. ’Pure direct marketing or sales

promotion companies are quite rare now,’ Amanda Merron, a partner at

WKS, explains.



Audited financial information on the companies is collected, after which

it is ranked. The table does not include organisations that trade as

divisions of another agency and do not publish separate accounts.



WWAV Rapp Collins ascribes its pounds 7 million drop in turnover - which

has not affected its dominance - to the trend of clients taking print

and production work in-house. In a year when the word ’integration’ was

beginning to sound jaded, WWAV’s chairman, John Watson, says the

company’s edge comes from the fact that ’it has always remained

committed to direct marketing.



We embrace integration in the sense that we look at all media. But we

don’t claim to be able to do image-based work.’



Contract publishing also threatened WWAV this year when Heinz prepared

to take its customer magazine, At Home, to Redwood Publishing - a move

that ended in an about-turn when the win was announced prematurely. The

contract, worth an estimated pounds 6 million, is still up in the air.

However, it signals the fact that strengthening selective specialist

functions within a direct marketing agency is a logical way forward.



Many agencies are setting up units dedicated to direct response TV,

inter-active media and media buying. Gina Batty, the managing director

of Grey Direct - which has maintained a turnover of around pounds 16

million and recently won business from Freemans - says that as well as

having specialists in DRTV, the company is growing its planning and

database departments. ’The problem with most database companies is that

they are good at processing, but not necessarily at analysing and

interpreting the data,’ she says.



Consolidation vies with integration as the most-used word of the

year.



The chief executive of Barraclough Hall Woolston Gray, Simon Hall, says:

’We are seeing a polarisation between the strong outfits and the smaller

ones, which are unable to invest in those ancillary services that make

such a difference to the strategy delivered to clients.’ Barraclough

Hall’s turnover has risen by pounds 7 million and the company now

employs more than 200 people.



WWAV is one of three agencies in the top ten that suffered a fall in

turnover. Another, Colleagues Group, suffered a slow down after it went

public. Purchasepoint’s fall in turnover was a result of the disposal of

MBO/RCF Communications in 1995.



Colin Lloyd, chairman of the Direct Marketing Association, says the rise

in direct marketing spend - which is up by more than pounds 1.5 billion

in two years - is at the expense of advertising spend. ’Marketing

directors may have held off their above-the-line spend to reinstate

programmes put on hold in the early 90s, but now, because of its

accountability and tangible benefits, direct marketing, as an integrated

system, is far more attractive.’



Evans Hunt Scott has made one of the biggest leaps in the table from

15th to eighth position, more than doubling its turnover. Jon Ingall,

the company’s managing director, says it has benefited from the growth

of existing clients’ business. ’People are beginning to think in

customer terms rather than campaign terms, so you have got to

co-ordinate, ’ he says. The agency managed the Labour Party’s

below-the-line work in the run-up to the election this year.



Evans Hunt Scott positions itself as ’a 100 per cent direct marketing

agency’, according to Ingall. ’We have a broad sense of what direct

marketing is. But we’re not going to do a Rapier Stead & Bowden - all

credit to them, however - and turn ourselves into an advertising

agency.’



Rapier Stead & Bowden’s pounds 50 million Cable & Wireless

Communications campaign attracted considerable attention. The agency is

free to offer unbiased advice because it is not part of a large group

that owns an advertising agency.



All the large direct marketing companies provide a range of

services.



At Clarke Hooper Consulting, which has been in the top 20 for the past

two years, the chairman, Barry Clarke, doesn’t shy away from the

’I-word’, even though his company is now part of the Abbot Mead Vickers

BBDO group.



’There is a much greater integration of campaigns where work is

multi-disciplined - from the type of management consultancy you might

have hired Price Waterhouse for at one stage, to project management that

includes PR, direct marketing, promotions and internal communications,

where the agency is working as a turn-key manager for that project.’



There’s also integration on the agency side. Interfocus merged with

fellow Interpublic shop, the Brompton Agency, in January, a move that

the Interfocus managing director, Matthew Hooper, says gave him a much

sought-after ’critical mass and access to a strong, entrepreneurial

network’. Payne Stracey and TBWA Direct have merged to become TBWA Payne

Stracey. Carlson bought Smith Bundy & Partners, having assimilated FKB &

Associates and MHA Carlson, while Publicis bought City Financial

Marketing and Incepta acquired Citigate.



One of the biggest events of the year was the US-based Synder

Communication’s pounds 48 million buyout of Brann in March. According to

Jac Hansel, Brann’s joint managing director, Brann courted Snyder,

rather than the other way around. He says: ’We went out looking for an

international partner because we lost a couple of pieces of business a

few years ago to competitors who came along and told our clients they

could do them a European deal. We couldn’t match that.’



The Institute of Direct Marketing’s managing director, Derek Holder,

says: ’US companies are buying everything in sight at silly prices.’ Two

or three big advertising groups are looking to add a direct marketing

agency to their operations. Even those who already have a direct

marketing outfit in the group are still looking to capitalise on the

sector’s growth. Within the Omnicom group - which includes WWAV Rapp

Collins - BMP DDB has this year recruited direct marketing specialists

to set up a unit within the agency.



Holder thinks the unprecedented demand for a piece of direct marketing

is an issue. ’There are very few independents left to buy - and whether

they would sell at this moment is another question,’ he says. David

Tonnison, managing director of the Marketing Organisation - the only

independent company in the top ten - says: ’We’re comfortable being

independent. I don’t feel threatened in the market.’ However, he is

anxious not to repel frequent and potentially lucrative advances by

companies who want to fill a gap in their portfolio and increase their

business.



For companies wanting to buy into the sector but unwilling or unable to

do so, there’s always the option of a start-up. The Lowe Group caused

major cracks in GGT Direct’s top management last year when it poached

four top directors - including its chief executive, Tony Watson, and

managing director, Nick Young - for the launch of Lowe Direct. However,

GGT retains a place in the top 20, according to its latest figures. Mike

Cornwell, who replaced Young as managing director, has been in the post

for 18 months and the agency has won work from major clients including

Telewest.



Despite the industry’s buoyancy, few start-ups have reached the top

30.



One possible reason is lack of experienced agency personnel. While

overall revenue has increased by 11 per cent, employment costs have

risen by 16 per cent, which appears to be putting a squeeze on pre-tax

profits.



Hall believes that there will soon be a spate of start-ups. These will

join companies that are now large enough to launch their own

spin-offs.



’Everyone is saying direct marketing is taking over the world,’ he

says.



’I genuinely believe that we are in a very powerful position, but we

still have to deliver quality creative and branding work - the magic

dust.’



Top 30 direct marketing and sales promotion agencies ranked by Willott

Kingston Smith

Rank/agency name         year end  year end    turnover    turnover

                         latest    previous      latest    previous

                                             pounds 000  pounds 000

1  WWAV Rapp Collins     31.12.96  31.12.95      56,934      63,622

2  Brann                 31.12.96  31.12.95      41,922      39,639

3  Carlson Marketing

   Group UK              31.12.96  31.12.95      36,287      13,929

4  International

   Marketing and

   Promotions Group      31.12.96  31.12.95      35,701      31,693

5  Colleagues Group      31.12.96  31.12.95      31,208      51,276

6  Barraclough Hall

   Woolston Gray         31.12.96  31.12.95      21,322      14,516

7  The Marketing

   Organisation          31.12.95  31.12.94      19,668      17,319

8  Evans Hunt Scott

   Eurocom               31.12.95  31.12.94      18,640       8,415

9  Purchasepoint Group   31.12.95  31.12.94      18,563      27,825

10 Grey Direct           30.09.96  30.09.95      16,737      17,512

11 WWAV Rapp

   Collins North         31.12.96  31.12.95      13,184      14,366

12 Grey Integrated       30.09.96  30.09.95      12,720      12,176

13 GGT Direct

   Advertising           30.04.96  30.04.95      12,656      10,638

14 Tri-Direct            30.11.95  30.11.94      12,259      10,759

15 The Marketing

   Store (Hertford)      30.04.96  30.04.95      12,223       8,235

16 Clarke Hooper

   Consulting            31.12.95  31.12.94      10,835       8,065

17 The Triangle Group    31.12.95  31.12.94      10,023      10,198

18 Promotional

   Campaigns             31.12.95  31.12.94       9,828       8,446

19 Bates

   Communications        31.12.96  31.12.95       9,224      11,622

20 CBH & Partners        31.12.95  31.12.94       8,382       7,635

21 KLP London            31.12.95  31.12.94       8,094       6,320

22 Judith Donovan

   Associates            31.12.96  31.12.95       8,067       5,722

23 Finex

   Communications

   Group                 30.06.96  30.06.95       7,568       4,406

24 Sheard Thomson

   Harris/CBH            31.12.96  31.12.95       7,459       5,251

25 Tequila UK            31.12.95  31.12.94       7,314       5,497

26 MBO/RCF               31.12.95  31.12.94       7,153       4,787

27 LGM Marketing

   Services              29.02.96  28.02.95       7,092       7,374

28 Option One            30.04.96  30.04.95       6,213      10,631

29 Marketing

   Perspectives          30.09.96  30.09.95       6,103       5,719

30 Tullo Marshall

   Warren                31.12.95  31.12.94       5,701       4,774

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

                                       profits      profits

                                        latest     previous

                                    pounds 000   pounds 000

1  WWAV Rapp Collins       -10.51        3,561        2,817

2  Brann                     5.76         -154        2,728

3  Carlson Marketing

   Group UK                160.51        1,268          225

4  International

   Marketing and

   Promotions Group         12.65        1,541          517

5  Colleagues Group        -39.14        1,012        3,863

6  Barraclough Hall

   Woolston Gray            46.89        1,862          980

7  The Marketing

   Organisation             13.56           26           40

8  Evans Hunt Scott

   Eurocom                 121.51          705          184

9  Purchasepoint Group     -33.29          691        1,032

10 Grey Direct              -4.43          294          232

11 WWAV Rapp

   Collins North            -8.23          525          467

12 Grey Integrated           4.47        1,203          798

13 GGT Direct

   Advertising              18.97          283          358

14 Tri-Direct               13.94          362          377

15 The Marketing

   Store (Hertford)         48.43          148          158

16 Clarke Hooper

   Consulting               34.35          803          417

17 The Triangle Group       -1.72          717          591

18 Promotional

   Campaigns                16.36          724          529

19 Bates

   Communications          -20.63         -584          -14

20 CBH & Partners            9.78          527          378

21 KLP London               28.07          418          199

22 Judith Donovan

   Associates               40.98          487          329

23 Finex

   Communications

   Group                    71.77          902          534

24 Sheard Thomson

   Harris/CBH               42.05          637          272

25 Tequila UK               33.05          309          -12

26 MBO/RCF                  49.43          670          848

27 LGM Marketing

   Services                 -3.82          329          872

28 Option One              -41.56          272          482

29 Marketing

   Perspectives              6.71           81           34

30 Tullo Marshall

   Warren                   19.42          586          606

Rank/agency name       % change       staff      staff

                                     latest   previous

1  WWAV Rapp Collins         26.41      218        206

2  Brann                   -105.65      737        645

3  Carlson Marketing

   Group UK                 463.56      315        149

4  International

   Marketing and

   Promotions Group         198.07      134        161

5  Colleagues Group         -73.80      154        100

6  Barraclough Hall

   Woolston Gray             90.00      106         77

7  The Marketing

   Organisation             -35.00      105        124

8  Evans Hunt Scott

   Eurocom                  283.15       82         48

9  Purchasepoint Group      -33.04      177        202

10 Grey Direct               26.72       44         27

11 WWAV Rapp

   Collins North             12.42       41         53

12 Grey Integrated           50.75       84         73

13 GGT Direct

   Advertising              -20.95       65         47

14 Tri-Direct                -3.98       30         22

15 The Marketing

   Store (Hertford)          -6.33       47         39

16 Clarke Hooper

   Consulting                92.57       46         48

17 The Triangle Group        21.32      N/A        N/A

18 Promotional

   Campaigns                 36.86       58         50

19 Bates

   Communications        -4,071.43       28         28

20 CBH & Partners            39.42       69         46

21 KLP London               110.05       63         52

22 Judith Donovan

   Associates                48.02       55         48

23 Finex

   Communications

   Group                     68.91       58         31

24 Sheard Thomson

   Harris/CBH               134.19       31         25

25 Tequila UK             2,675.00       24         20

26 MBO/RCF                  -20.99      126        111

27 LGM Marketing

   Services                 -62.27       39         36

28 Option One               -43.57       59         74

29 Marketing

   Perspectives             138.24       45         47

30 Tullo Marshall

   Warren                    -3.30       29         23



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