As the economy began to improve and marketers increased ad spending last year, b2b ad agencies saw their businesses once again expand after two years of client cutbacks.
Ad spending during the first nine months of 2010 was up 6.4% over the year-earlier period, according to Kantar Media. (The final ad spending total for last year was still being tallied at press time.)
“We characterize 2010 as a very strong recovery,” said John Seifert, chairman-CEO of Ogilvy & Mather North America, New York, winner of the large-agency category in BtoB's Top Agencies special report.
“2008 and 2009 were pretty awful years in the industry, and we were not immune to the overall challenges the industry faced. What we finally saw in 2010, which we had not experienced in '08 and '09, was a really strong fourth quarter where clients kept their foot on the pedal.”
Ogilvy grew its overall revenue 10% last year over 2009, picking up new clients including the American Bar Association, Ikea, Intercontinental Hotel Group and Zurich Financial. It also realized the first full-year impact of revenue from clients it won in the fourth quarter of 2009, including United Parcel Service of America and CDW.
“We are now seeing our most valued clients come back and spend pretty ambitiously,” Seifert said. “The tech businesses got hit pretty hard in the recession, and to see them come back and spend is terrific.”
Ogilvy created integrated campaigns last year for such tech clients as IBM Corp. and SAP, as well as a rebranding campaign for UPS.
Other agency executives also said 2010 was a turnaround year.
“I look at 2010 as being the best and most exciting year we've had yet,” said Rick Segal, worldwide president-chief practice officer at GyroHSR New York, winner of the midsize agency category. “We added new clients, new capabilities, new people and entered new regions of world.”
GyroHSR picked up two big international accounts in December, being named lead creative agency for FedEx in Europe, the Middle East and Africa, and winning global advertising duties for Heathrow Express, a London-based transportation service. It also won new U.S. accounts last year, including Blue Coat Systems, the Corn Refiners Association and Tetra Pak, growing its total revenue by about 7%.
The agency also changed its approach to b2b marketing, launching a new practice area called @Work State of Mind, which develops marketing campaigns for clients based on the idea that business decision-makers are constantly connected to their work lives through the technologies they use.
“Work is no longer a place or done in a specific frame of time; rather, it's a state of mind,” Segal said. GyroHSR used this approach to develop integrated campaigns for clients such as Scotsman Ice Systems and USG Corp.
Smaller agencies also saw growth last year as they won new clients and grew their business with existing clients.
Stein Rogan+Partners, New York, winner in the small agency category, grew its total revenue 22% and gained new clients including Alvogen, D-Link Systems, PR Newswire and Syncsort.
Tom Stein, president of Stein Rogan, said the agency has changed its approach to marketing to focus on the intersection of paid media, owned media (content that is created by the agency) and earned media (content generated by social media).
To address these changing content needs, Stein Rogan created a new agency structure in which a VP-integrated marketing leads a team of search specialists, social media experts, paid media planners and buyers, and content creators.
“The old agency structure would be to have a media department with various specialties,” Stein said. “We no longer have someone who leads the media practice; we changed it to be about this intersection of paid, owned and earned media.”
Interactive agencies also grew last year as the economy picked up and clients increased online spending.
Interactive winner BusinessOnline, San Diego, grew its total revenue 31% last year and added new clients including Cargill Inc., Emerson Electric Co., Honeywell International, Illumina, Masco Corp. and NetApp.
A key focus for BusinessOnline is using analytics to help its clients measure and optimize the performance of their online marketing campaigns. It launched an analytics practice, called Customer Intelligence, which it used to help Cisco Systems develop a predictive engagement model to forecast customer purchases.
“C-level execs want marketers to get closer to the customer, and they want better customer intelligence,” said Thad Kahlow, CEO of BusinessOnline.
Interactive runner-up Traction, San Francisco, also focused on analytics last year and developed internal processes, such as an “email builder,” to help its clients improve operational efficiencies.
The agency picked up new clients including Meebo, Robert Half International and Salesforce.com, and grew its total revenue by about 2% last year.
The following pages contain profiles of the leading agencies in the four categories: large, midsize, small and interactive.
