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divisions of another agency and do not publish separate accounts.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
