Direct marketing, it is often said, is in the ascendancy, as marketers seek both accountability and one-to-one communications. Direct, so the argument goes, stands to benefit from higher budgets and greater strategic responsibility.
It is, therefore, surprising to find the level of unease that pervades agencies. For all the optimism about direct's future, there are plenty of questions weighing on the minds of agency executives. How do they keep up with the proliferation of new digital channels? How do they maintain response rates? Where do they find the right staff? How can they prevent margins being squeezed to the point where an account becomes effectively worthless? There are no easy answers.
The market figures suggest the outlook is positive. The latest IPA Bellwether report concluded that direct would grow faster than any other media category apart from the internet in 2006. It also suggested money would continue to be withdrawn from traditional media advertising and redirected below the line.
These findings are reflected in this year's direct marketing agency league table. Both gross profit and turnover are up almost across the board, with double-digit percentage increases common even among the bigger agencies.
Direct, it seems, is booming.
So why the anxiety? The problem is that, as it grows, the landscape of the direct industry is changing rapidly. Its traditional sources of revenue, while far from drying up, are certainly losing their force. Direct mail volumes totalled 5.1bn items in 2005, according to the Direct Mail Information Service, down more than 5% on the year before. And expenditure fell for the first time in more than a decade, dropping 4% to £2.37bn.
Direct mail has received so much bad press in recent years that the Direct Marketing Association recently launched a campaign fronted by former Watchdog presenter Alice Beer to explain the benefits of all direct techniques to consumers. However, many in the industry feel last year's decline in mail is not a one-off. Response rates have been falling steadily, and direct agencies are rethinking their business models as a result.
'Over the next few years the discipline must evolve to survive,' says Mark Runacus, planning director at Hicklin Slade & Partners. His agency has had a good year, expanding its work with Honda to include its £1.5m dealership marketing account. He believes action is needed now to avoid future problems. 'We are readying our business today for the future demise of direct marketing as we know it.'
Runacus is not alone. Leo Campbell, chairman of Claydon Heeley Jones Mason, believes the sector has been slow to acknowledge consumer indifference.
'We have to face up to the fact that people aren't opening envelopes any more,' he says. 'Our industry is in tatters but nobody will admit it.'
These trends have led some marketers and agencies to adopt new strategies.
Permission-based marketing is on the increase, with companies building their own databases of customers who have 'opted in'. In this environment, increased emphasis is also being put on creativity in direct communications.
Digital printing technology has given greater scope for personalisation, which, if used effectively, can boost response rates. Careful data planning has returned to the fore, and smaller, better-targeted campaigns are the order of the day.
There has also been a growth in retention work rather than acquisition.
This is especially true for financial services - the market for credit cards has largely matured, with a shift in focus from winning customers to retaining good ones.
These developments are taking direct into some unexpected places. The growth of retention activity is leading to mailings and inserts with greater editorial content, as marketers seek to engage with their customers. For example, Lloyds TSB is producing a number of magazines to send to its customers.
As a result, direct agencies in this space are coming up against contract publishers in pitches - Lloyds TSB recently handed publisher Rare the account for a mini-magazine ahead of direct incumbent Tullo Marshall Warren.
There are new skills to learn here, and TMW is one of the first direct agencies to hire a dedicated publishing team. The decision paid off earlier this month when it won the contract for a different Lloyds TSB magazine, this time beating Rare.
A sign of change in the industry is the success smaller agencies have had in poaching business from their larger rivals. Several agencies have been launched in recent years by executives with big-agency experience, and the signs are that big-spending clients are willing to try them out.
In July last year, More Th>n shifted its £10m direct account out of a roster including WWAV Rapp Collins into Stephens Francis Whitson, an agency at the opposite end of the league table. Flourish, a start-up based in Bristol, managed to win business from BSkyB, Chelsea Building Society and Cornhill Insurance, while DSJ won a brief from BBC Worldwide, including a mailing for the Radio Times.
The implication is that marketers are looking for new ideas and are willing to put out projects to small agencies to get them. 'Clients are happy to go to smaller agencies if they believe they will get better creativity with a flatter, and therefore cheaper, management structure,' argues Jim Surguy, managing director of marketing consultancy Results.
For Amanda Phillips, managing director of Proximity London, the boutique shops have thrown down the creative gauntlet. 'The smaller agencies are the people we look to,' she admits. 'They are thinking of the ideas that we want to keep up with. If we just looked to our peers, we'd stay still.'
Many of the bigger agencies have their attention engaged elsewhere, as multinational briefs become increasingly prevalent. Last year OgilvyOne picked up a brief for the pan-European launch of Huggies DryNites, while EHS Brann has produced work for Whiskas across Europe, as has Tequila for Canon. It is a service the bigger non-network agencies are keen to provide. Iris, for example, has set up offices in New York and Singapore, both of which handle the Sony Ericsson account on a regional basis. TMW, meanwhile, is a member of a coalition of worldwide independent agencies called Inter-Direct. Both are keen to offer a different model to the networks, yet still deliver globally.
The feeling is that international business will continue to grow as companies try to cut costs by aligning work across markets. Finance and technology firms are leading the way, but other sectors are likely to follow. 'It's coming from the top,' says Philips. 'This alignment has been happening with advertising for a few years, and now direct is catching up.'
Big or small, there is no doubt about the major challenge facing agencies: digital. In previous years the talk has been of online channels assuming greater importance in direct briefs. Now it is rare for a piece of direct not to include some form of digital activity. This is clear in the case of customer relationship managment strategies, where the web offers greater creative flexibility and lower costs than traditional channels.
Helen Litvac, general manager for CRM at Virgin Holidays, is a convert to eCRM. An email campaign for the firm by Kitcatt Nohr Alexander Shaw and digital agency Underwired generated £3m of sales on spend of just £30,500 and won a gold DMA award. 'Online CRM offers a highly personalised medium that prospects and customers have given permission to receive,' says Litvac. 'It enables you to segment and target personalised content at a fraction of the cost of traditional direct marketing.'
These benefits have lured new clients to direct and the past year has seen an increase in FMCG work. Unilever has doubled the size of its accounts at OgilvyOne, including Knorr and Sunsilk, and used TMW to extend the creative for the Flora Pro.activ campaign, starring Lulu, into direct activity. It also conducted relationship marketing for Wall's and Carte D'Or through Craik Jones Watson Mitchell Voelkel.
FMCG firms have also started to turn to direct because of the declining effectiveness of TV and the growing restrictions on in-store work. The low margins on FMCG products have previously limited their direct activity, but the low cost of eCRM has encouraged them to experiment. 'Sometimes the reason clients are drawn to online is the cost savings,' says Fiona Scott, managing director at Craik Jones. 'But when they see that it can drive sales, they become more confident.'
With the specialist online sector flourishing, direct agencies are having to build digital capability rapidly to protect their incomes. Several models have evolved. Some agencies have merged with digital players to produce multi-discipline powerhouses. This has tended to be the approach of the networks, which have pooled direct and digital in shops such as Tequila, OgilvyOne and EHS Brann.
Elsewhere, other agencies have chosen to buy in expertise from existing digital players without integrating the two businesses. Kitcatt Nohr Alexander Shaw has purchased a stake in Underwired for this purpose and last year Omnicom brought digital shop Agency Republic together with direct business Claydon Heeley Jones Mason in a division called Zulu. The agencies can pitch together for integrated accounts or individually for briefs that fall within their specialism. Mercedes-Benz, Dunlop and Egg now use both.
Still other agencies have set up their own digital units from scratch.
Archibald Ingall Stretton last year set up online division dais, which already contributes up to 30% of the agency's revenues. However, building digital capacity in this way is difficult. Talented executives in this area are scarce, and direct agencies must compete with established digital players to net them.
Whatever the model, keeping up with digital will require ongoing investment. Digital is now much more than just email; search marketing has grown enormously in the past 12 months, and blogs, interactive TV and 3G mobile are all expected to take off over the next few years.
Direct agencies do not necessarily need to invest in the technology itself - much of that can be outsourced; the main cost they are confronted with is hiring staff with digital experience while retraining existing employees.
The need for direct agencies to invest in their business has arguably never been more pressing, but this has been made more difficult because their ability to invest is being eroded. Many agencies reported a squeeze on margins as a primary feature of 2005. The reasons are not new - procurement departments have become a fact of life, and competition among agencies is so fierce that profits from areas such as print production have been virtually wiped out. There are ongoing complaints that some agencies are effectively buying business by offering to do it without making a profit.
Last year, these trends were exacerbated by a relatively quiet new-business market. There was plenty of project work, which was often assigned without a pitch, but few big reviews. There is also a suspicion that some clients took advantage of this situation. Agencies have complained of pitches for business that never materialised, or pitches that simply served as a means to extract a better deal out of the incumbent. And with so many looking for business, clients could draw up long pitch lists, meaning wasted time and money for a lot of agencies.
'Agencies were prepared to go for anything last year,' says Tim Bonnet, chief executive of Tequila. 'Some clients managed to get away with things they would not have done in a busier new-business market.'
Not everyone has sympathy for agencies feeling the pinch. 'It is about time agencies woke up,' argues Gavin Wheeler, joint managing director of Richmond agency WDMP. 'They all bleat about falling margins, but they are only being squeezed because their clients are themselves being squeezed.' He points to the fact that many agencies still insist on an expensive central London location. 'Rather than complaining about the clients, the first place they should look is their own business. They have had it too good for too long.'
One problem affecting nearly all agencies is recruitment. Other than the shortage of staff with digital experience, they are struggling to recruit enough good-quality account handlers with basic experience of the direct industry. This is in part a hangover from a downturn at the start of the millennium, when many agencies stopped recruiting. The result is that staff costs are high, putting added strain on agency finances.
This shortage could threaten small but expanding agencies. 'It could be a hindrance to growth,' admits Mark Davison, managing partner at DSJ.
'If lots of small agencies start winning big business, there will be a scramble for staff.'
The battle for talent will be key as agencies try to keep up with the evolution of the industry. As a sector, direct remains a major opportunity, but one that traditional shops cannot assume to have a divine right to exploit. They face competition from both advertising agencies such as Clemmow Hornby Inge and WCRS, which have launched direct shops to exploit the shift of budget away from TV, and the specialist digital sector, which is starting to make its presence felt. But, for the agencies that find the right models - and the right people to deliver them - there will be no shortage of work.
TOP DIRECT MARKETING AGENCIES Gross Gross Gross Name profit 2005 profit 2004 profit 2005 (pounds) (pounds) % chng WWAV Rapp Collins* n/a 29,091,540 n/a Tequila* n/a 26,035,414 n/a Proximity London* n/a 21,361,798 n/a 1 Carlson Marketing n/a 20,733,778 n/a 2 dunnhumby 19,290,030 22,356,280 -14 3 Publicis Dialog 18,768,000 16,904,000 11 EHS Brann* n/a 17,608,095 n/a Joshua* n/a 14,510,299 n/a 4 Tullo Marshall Warren 14,100,000 11,300,000 25 5 Iris 12,300,000 7,635,558 61 Arc Worldwide* n/a 11,589,000 n/a 6 Gyro International 11,400,000 4,700,000 143 7 The Marketing Store n/a 11,119,000 n/a Triangle* n/a 11,065,883** n/a 8 Rapier 10,200,000 9,900,000 3 9 Haygarth 10,125,353 9,096,643 11 RMG Connect* n/a 9,307,253 n/a 10 Cello Response 9,013,000 8,367,000 8 Craik Jones Watson Mitchell Voelkel* n/a 8,260,443 n/a 11 Billington Cartmell 8,170,000 6,027,000 36 12 Millennium Network 8,100,000 4,400,000 84 MRM Worldwide* n/a 7,473,000** n/a 13 Chemistry Communications n/a 6,373,000 n/a Claydon Heeley n/a 5,510,675 n/a Jones Mason* 14 LIDA 5,197,000 4,415,000 18 15 Archibald Ingall n/a 4,718,783 n/a Stretton 16 Dig For Fire 4,530,884 n/a n/a 17 Start Creative 4,484,825 4,435,876 1 18 Tri-Direct 4,429,000 3,763,000 18 19 Dialogue DLKW 4,400,000 n/a n/a FCBi London* n/a 4,274,448** n/a 20 Elvis 3,749,008 n/a n/a 21 Hicklin Slade & Partners 3,636,016 3,287,692 11 22 TDA 3,503,594 3,079,385 14 23 Beechwood 3,490,000 3,144,000 11 24 Partners Andrews 3,420,300 3,052,200 12 Aldridge 25 Tidalwave 3,309,467 3,990,869 -17 26 Meteorite 3,200,000 2,769,674 16 27 DMP 3,182,000 2,913,000 9 28 Iceberg Marketing 3,100,000 2,700,000 15 Sharpen Troughton n/a 2,626,107 n/a Owens Response* 29 Kitcatt Nohr 2,625,678 2,140,771 23 Alexander Shaw 30= Response One 2,500,000 1,800,000 39 Direct Marketing 30= Story UK 2,500,000 2,400,000 4 32 23red 2,417,000 1,478,000 64 33 WDMP 2,280,000 1,370,000 66 34 Carat Data Planning 2,232,000 2,282,000 -2 35 Liquorice 2,200,000 2,070,000 6 36 Entire 2,165,162 1,933,761 12 37 Geronimo 2,106,020 2,002,986 5 38 Golley Slater Direct 2,000,000 1,100,000 82 39 The JJ Group 1,923,711 1,518,493 27 40 Base One 1,800,000 1,550,000 16 41 Juice 1,772,000 1,312,000 35 42 Liquid Communications 1,700,000 1,900,000 -11 43 Teamspirit 1,655,771 1,444,590 15 44 Personal Communications 1,627,383 199,947 714 45 Communication Solutions 1,613,000 1,017,000 59 46 Bright 1,602,413 1,438,002 11 47 Red C 1,540,000 1,970,000 -22 48 Presky Maves 1,534,901 1,281,946 20 49 Hall Moore CHI 1,516,575 n/a n/a 50 Watson Phillips & 1,465,365 943,642 55 Norman 51 Them 1,455,000 1,370,000 6 52 Crayon Direct 1,400,000 n/a n/a Advertising 53 Mason Zimbler 1,398,900 1,091,900 28 54 Flourish 1,378,277 583,421 136 55 Forth Marketing Services 1,311,000 1,095,000 20 56 RAM Media 1,275,000 1,221,000 4 57 Mike Colling & Company 1,212,351 954,569 27 58 Intelligent Marketing 1,119,485 582,278 92 59 KHWS 918,047 845,280 9 60 Steel 892,745 725,141 23 61 DSJ 885,851 n/a n/a 62 Barraclough Edwards 729,168 338,652 115 Chamberlain 63 SOUK Response 718,038 383,938 87 64 Space 695,000 365,000 90 65 Stephens Francis 693,000 n/a n/a Whitson 66 Spinnaker 621,000 n/a n/a 67 TW Cat 575,317 448,300 28 68 Keevill Barton Kershaw 503,000 204,000 147 69 Snowball 384,000 292,000 32 70 Agency Inc 364,000 311,000 17 71 Cognito Integrated 233,000 137,000 70 Marketing Name Turnover Turnover Turnover 2005 (pounds) 2004 (pounds) % change WWAV Rapp Collins* n/a 79,942,370 n/a Tequila* n/a 46,662,385 n/a Proximity London* n/a 40,449,941 n/a 1 Carlson Marketing 33,965,000 39,017,157 -13 2 dunnhumby 21,850,060 25,143,703 -13 3 Publicis Dialog 23,215,000 25,264,000 -8 EHS Brann* n/a 26,808,180 n/a Joshua* n/a 28,000,947 n/a 4 Tullo Marshall Warren 22,900,000 17,100,000 34 5 Iris 22,600,000 17,097,423 32 Arc Worldwide* n/a 25,398,000 n/a 6 Gyro International 17,100,000 7,800,000 119 7 The Marketing Store n/a 19,321,000 n/a Triangle* n/a 20,424,270 n/a 8 Rapier 14,900,000 14,500,000 3 9 Haygarth 19,855,206 16,970,035 17 RMG Connect* n/a 17,549,064 n/a 10 Cello Response 22,301,000 20,724,000 8 Craik Jones Watson Mitchell Voelkel* n/a 18,945,455 n/a 11 Billington Cartmell 17,000,000 11,000,000 55 12 Millennium Network 20,000,000 14,100,000 42 MRM Worldwide* n/a 10,594,000 n/a 13 Chemistry Communications n/a 10,952,000 n/a Claydon Heeley n/a 9,783,043 n/a Jones Mason* 14 LIDA 7,021,000 5,791,000 21 15 Archibald Ingall n/a 8,957,178 n/a Stretton 16 Dig For Fire 6,409,489 n/a n/a 17 Start Creative 5,493,414 5,234,457 5 18 Tri-Direct 54,193,000 44,786,000 21 19 Dialogue DLKW 6,200,000 n/a n/a FCBi London* n/a 13,392,380 n/a 20 Elvis 9,333,578 n/a n/a 21 Hicklin Slade & Partners 5,231,361 6,395,390 -18 22 TDA 4,452,670 4,143,462 7 23 Beechwood 5,401,000 4,857,000 11 24 Partners Andrews 5,927,700 4,686,860 26 Aldridge 25 Tidalwave 4,952,697 6,308,037 -21 26 Meteorite 4,100,000 3,937,932 4 27 DMP 4,456,880 3,768,000 18 28 Iceberg Marketing 19,000,000 14,000,000 36 Sharpen Troughton n/a 4,599,256 n/a Owens Response* 29 Kitcatt Nohr 3,845,354 3,161,480 22 Alexander Shaw 30= Response One 16,000,000 10,500,000 52 Direct Marketing 30= Story UK 3,500,000 3,600,000 -3 32 23red 3,490,000 2,565,000 36 33 WDMP 4,640,000 3,280,000 41 34 Carat Data Planning 2,232,000 2,282,000 -2 35 Liquorice 3,090,000 2,980,000 4 36 Entire 4,273,629 5,261,327 -19 37 Geronimo 3,214,036 3,271,280 -2 38 Golley Slater Direct 3,600,000 2,800,000 29 39 The JJ Group 9,710,334 8,133,813 19 40 Base One 2,900,000 2,600,000 12 41 Juice 4,108,000 3,246,000 27 42 Liquid Communications 3,000,000 3,100,000 -3 43 Teamspirit 4,354,010 3,715,042 17 44 Personal Communications 4,186,936 202,997 1963 45 Communication Solutions 2,334,000 1,075,000 117 46 Bright 2,348,217 2,268,919 3 47 Red C 2,620,000 3,580,000 -27 48 Presky Maves 2,543,720 3,150,997 -19 49 Hall Moore CHI 3,047,060 n/a n/a 50 Watson Phillips & 3,756,309 2,470,511 52 Norman 51 Them 3,072,000 2,650,000 16 52 Crayon Direct 1,900,000 n/a n/a Advertising 53 Mason Zimbler 2,223,700 2,178,100 2 54 Flourish 1,887,166 891,229 112 55 Forth Marketing Services 2,506,000 2,339,000 7 56 RAM Media 6,706,000 10,740,000 -38 57 Mike Colling & Company 10,074,049 4,222,567 139 58 Intelligent Marketing 2,061,341 1,128,106 83 59 KHWS 1,540,044 1,495,280 3 60 Steel 3,034,000 2,214,000 37 61 DSJ 1,960,715 n/a n/a 62 Barraclough Edwards 1,000,875 457,126 119 Chamberlain 63 SOUK Response 1,191,612 1,030,652 16 64 Space 1,400,000 922,000 52 65 Stephens Francis 733,688 n/a n/a Whitson 66 Spinnaker 1,080,000 n/a n/a 67 TW Cat 2,711,803 2,295,144 18 68 Keevill Barton Kershaw 842,000 397,000 112 69 Snowball 731,000 543,000 35 70 Agency Inc 1,121,000 947,000 18 71 Cognito Integrated 456,000 261,000 75 Marketing Name Staff total Creatives 2005 2005 WWAV Rapp Collins* 320 n/a Tequila* 335 n/a Proximity London* 260 35 1 Carlson Marketing 255 24 2 dunnhumby 384 0 3 Publicis Dialog 160 23 EHS Brann* 308 37 Joshua* 210 n/a 4 Tullo Marshall Warren 210 35 5 Iris 195 87 Arc Worldwide* 145 40 6 Gyro International 176 50 7 The Marketing Store n/a n/a Triangle* 65 18 8 Rapier 106 24 9 Haygarth 131 32 RMG Connect* 107 n/a 10 Cello Response 129 25 Craik Jones Watson Mitchell Voelkel* 105 31 11 Billington Cartmell 87 19 12 Millennium Network 180 32 MRM Worldwide* 212 60 13 Chemistry Communications 107 25 Claydon Heeley n/a n/a Jones Mason* 14 LIDA 65 20 15 Archibald Ingall 92 20 Stretton 16 Dig For Fire 79 26 17 Start Creative 58 33 18 Tri-Direct 57 0 19 Dialogue DLKW 52 23 FCBi London* 42 14 20 Elvis 60 16 21 Hicklin Slade & Partners 42 11 22 TDA 48 13 23 Beechwood 45 14 24 Partners Andrews 48 17 Aldridge 25 Tidalwave 50 20 26 Meteorite 49 13 27 DMP 40 14 28 Iceberg Marketing 33 7 Sharpen Troughton 36 n/a Owens Response* 29 Kitcatt Nohr 40 12 Alexander Shaw 30= Response One 45 0 Direct Marketing 30= Story UK 30 10 32 23red 35 15 33 WDMP 30 10 34 Carat Data Planning 81 0 35 Liquorice 35 15 36 Entire 35 6 37 Geronimo 23 8 38 Golley Slater Direct 30 10 39 The JJ Group 84 15 40 Base One 32 9 41 Juice 20 6 42 Liquid Communications 18 0 43 Teamspirit 36 12 44 Personal Communications 32 8 45 Communication Solutions 29 11 46 Bright 26 11 47 Red C 29 10 48 Presky Maves 28 8 49 Hall Moore CHI 36 9 50 Watson Phillips & 31 9 Norman 51 Them 19 5 52 Crayon Direct 33 9 Advertising 53 Mason Zimbler 40 10 54 Flourish 19 8 55 Forth Marketing Services 27 2 56 RAM Media 22 1 57 Mike Colling & Company 23 0 58 Intelligent Marketing 31 10 59 KHWS 15 5 60 Steel 40 26 61 DSJ 20 4 62 Barraclough Edwards 21 6 Chamberlain 63 SOUK Response 52 8 64 Space 15 3 65 Stephens Francis 21 7 Whitson 66 Spinnaker 15 5 67 TW Cat 19 7 68 Keevill Barton Kershaw 7 3 69 Snowball 5 1 70 Agency Inc 10 5 71 Cognito Integrated 9 0 Marketing NAME WWAV Rapp Collins* Subsidiary Omnicom Group. Founded 1981. Chairman Ian Haworth; managing director Marco Scognamiglio. Clients include British Gas, Sony, NSPCC. Multi-discipline. Member DMA, IPA. www.wwavrc.co.uk Tequila* Subsidiary TBWA\Worldwide. Founded 1992. Chief executives Tim Bonnet (London), Fergus McCallum (Manchester). Clients include British Army, Abbey, Canon. Multi-discipline. Member MCCA, IDM. www.tequila-uk.com Proximity London* Subsidiary Omnicom Group. Founded 2000. Chairman Cilla Snowball; managing director Amanda Phillips. Clients include TV Licensing, Shell, Royal Mail. Multi-discipline. Member DMA, IPA, ISP, MCCA. www.proximitylondon.com 1 Carlson Marketing Subsidiary Carlson Companies. Founded 1960. Managing director Jose Ferrao; creative director Nick Meads. Clients include Hyundai, Arla Foods, Guinness. Multi-discipline. Member DMA, IPA, ISP, MCCA, IDM. www.carlsonmarketing.co.uk 2 dunnhumby Subsidiary Tesco. Founded 1989. Chairman Clive Humby; managing director Edwina Dunn. Clients include Tesco, Procter & Gamble, Air Miles Travel Company. Multi-discipline. Member DMA. www.dunnhumby.com 3 Publicis Dialog Subsidiary Publicis Groupe. Founded 1998. Chairman Tim Lindsay; managing director Simon Marshall. Clients include Renault, Hewlett-Packard, Zurich. Multi-discipline. Member DMA, IPA, ISP, MCCA, IDM. www.publicis-dialog.co.uk EHS Brann* Subsidiary Havas. Founded 1968. Chairman Terry Hunt; managing director Matt Atkinson. Clients include Tesco, British Gas, Volvo. Predominantly DM. Member DMA, IPA. www.ehsbrann.com Joshua* Subsidiary WPP. Founded 1998. Chairman Peter Thompson; chief executive Nick Spindler. Clients include GlaxoSmithKline, Nestle, Post Office. Member DMA, ISP, MCCA. www.joshua-agency.co.uk 4 Tullo Marshall Warren Privately owned. Founded 1987. Managing director Chris Warren; creative director Paul Tullo. Clients include Nissan, Diageo, Lloyds TSB. Predominantly DM. Member DMA. www.tmw.co.uk 5 Iris Privately owned. Founded 1999. Managing director Ian Millner; chief executive Stewart Shanley. Clients include Sony Ericsson, T-Mobile, Bacardi Brown-Forman. Multi-discipline. Member DMA, IPA, ISP, MCCA. www.irisnation.com Arc Worldwide* Subsidiary Publicis Groupe. Founded 1968. Chairman Andrew Edwards; managing director Mike Spicer. Clients include Fiat, Procter & Gamble, Kellogg. Multi-discipline. Member DMA, IPA, ISP, MCCA. www.arcww.com 6 Gyro International Privately owned. Founded 1991. Chairman Mike Shinya; managing director Gary Brine. Clients include Sun Microsystems, Nokia, Sony. Multi-discipline. Member DMA, MCCA. www.gyrointernational.com 7 The Marketing Store Subsidiary The Havi Group. Founded 1986. Chairman Graham Kemp; chief executive Catherine Gale. Clients include McDonald's, Cereal Partners Worldwide, Asda. Multi-discipline. Member ISP, MCCA. www.themarketingstore.com Triangle* Subsidiary Publicis Groupe. Founded 1975. Managing director Diana Cawley; creative director Kevin Frost. Clients include Diageo, Britvic, BAA. Multi-discipline. Member DMA, IPA, ISP, MCCA, POPAI. www.thetrianglegroup.co.uk 8 Rapier Privately owned. Founded 1988. Chairman Jonathan Stead; chief operating officer Sue Payne. Clients include AA, NTL, Digital UK. Predominantly DM. Member DMA, ISP. www.rapieruk.com 9 Haygarth Privately owned. Founded 1984. Chairman Stephen Morris; managing director Sophie Daranyi. Clients include Nokia, Majestic, Gillette. Multi-discipline. Member DMA, ISP. www.haygarth.co.uk RMG Connect* Subsidiary WPP. Founded 2004. Chief executive Jonathan Harman; creative director Trefor Thomas. Clients include HSBC, Vodafone, Shell. Member DMA, IPA. www.rmgconnect.com 10 Cello Response Subsidiary Cello Group. Founded 1993. Chairman Stephen Pidgeon; managing director Andy Carolan. Clients include Royal British Legion, British Heart Foundation, Scottish Power. Predominantly DM. Member DMA. www.cellogroup.co.uk Craik Jones Watson Mitchell Voelkel* Subsidiary Abbott Mead Vickers BBDO. Founded 1991. Managing director Fiona Scott; chief executive David Watson. Clients include Land Rover, Orange, Boots. Multi-discipline. Member DMA. www.craikjones.co.uk 11 Billington Cartmell Privately owned. Founded 1990. Chairmen Ian Billington, Paul Cartmell; managing director Jason Nicholas. Clients include GlaxoSmithKline, Unilever, Lloyds TSB. Predominantly DM. Member ISP, MCCA. www.bcl.co.uk 12 Millennium Network Privately owned. Founded 1996. Chairman Andrew Orme; managing director Martin Smith. No clients disclosed. Predominantly DM. Member DMA. www.millenniumdirect.co.uk MRM Worldwide* Subsidiary Interpublic Group. Founded 2005. Managing director Alistair Duncan; creative director Matt Mayes. Clients include Microsoft, Intel, Royal Bank of Scotland. Predominantly DM. Member DMA, IAB, BIMA. www.mrmworldwide.co.uk 13 Chemistry Communications Privately owned. Founded 2000. Chairman Bernard Fisher; managing director Joe Garton. Clients include Transport for London, Unilever, Diageo. Multi-discipline. Member DMA, ISP, MCCA. www.chemistrygroup.com Claydon Heeley Jones Mason* Subsidiary Omnicom Group. Founded 1991. Chairman Jon Claydon; managing director Mike Welsh. Clients include Mercedes-Benz, Egg, Dunlop. Predominantly DM. Member DMA. www.chjm.com 14 LIDA Subsidiary M&C Saatchi. Founded 1999. Chairman Moray MacLennan; managing director Lisa Thomas. Clients include NatWest, British Airways, Mini. Predominantly DM. Member DMA, IPA, IDM, BIMA. www.lida.com 15 Archibald Ingall Stretton Privately owned. Founded 1998. Managing partners Stuart Archibald, Jon Ingall. Clients include O2, Skoda, Moet Hennessy. Multi-discipline. Member DMA, ISP, IDM. www.archibaldingallstretton.com 16 Dig For Fire Privately owned. Founded 2003. Chief executive Charles Buddery; managing director Charles Glover. Clients include Co-Operative Financial Services, Travis Perkins, Tesco. Multi-discipline. Member DMA, ISP. www.digforfire.co.uk 17 Start Creative Subsidiary Start. Founded 1996. Chairman Mike Curtis; creative director Darren Whittingham. Clients include Virgin, Royal Mail, Hertz. Multi-discipline. Member DMA, IDM. www.startcreative.co.uk 18 Tri-Direct Privately owned. Founded 1989. Managing director Patrick Carew. Clients include Hiscox Insurance, Bose, Norwich Union. Predominantly DM. Member DMA. www.tri-direct.co.uk 19 Dialogue DLKW Subsidiary Delaney Lund Knox Warren & Partners. Founded 2002. Managing director Paul Biggins; creative director Piggy Lines. Clients include HBOS, AA, Burger King. Multi-discipline. Member DMA, IPA, ISP, MCCA. www.dialoguedlkw.com FCBi London* Subsidiary Interpublic Group. Founded 1991. Chairman Nigel Jones; managing director Carolyn Stebbings. Clients include Motorola, World Vision, Open University. Multi-discipline. Member DMA, IPA. www.fcb.com 20 Elvis Subsidiary MCBD. Founded 2003. Chairman Jeremy Miles; managing director Mark Leversedge. Clients include Cadbury Trebor Bassett, Pizza Hut, Mitchells & Butlers. Multi-discipline. Member DMA, ISP, MCCA. www.elviscommunications.com 21 Hicklin Slade & Partners Privately owned. Founded 1998. Chairman Nick Horswell; managing director Justin Hicklin. Clients include Honda, Camelot, Diageo. Predominantly DM. Member DMA, ISP. www.hicklinslade.com 22 TDA Privately owned. Founded 1996. Chairman Heather Westgate; creative director Mark Pearson. Clients include Alliance & Leicester, Cats Protection, Norwich Union. Predominantly DM. Member DMA, IDM. www.tdaltd.com 23 Beechwood Privately owned. Founded 1989. Chairman Philip Beeching; managing director John Wood. Clients include HMV, Matalan, Pernod Ricard. Multi-discipline. Member DMA, IPA, IAB. www.beechwood.com 24 Partners Andrews Aldridge Privately owned. Founded 1998. Managing partner Phil Andrews; creative partner Steve Aldridge. Clients include Vodafone, Lexus, Lloyds TSB. Predominantly DM. Member DMA, IPA, IDM. www.andrewsaldridge.com 25 Tidalwave Privately owned. Founded 1996. Chairman Julian Sowerby; managing director Paul Cash. Clients include Hewlett-Packard, Vodafone, Compuware. Predominantly DM. Member DMA, IPA. www.tidal-wave.com 26 Meteorite Privately owned. Founded 1995. Chairman Hugh Bishop; managing director Debbie Smith. Clients include COI, Whitbread, Nokia. Multi-discipline. Member MCCA. www.meteorite.co.uk 27 DMP Privately owned. Founded 1989. Chairman David Lane; managing director Emma Simpson-Jarrett. Clients include Barclays, Black Horse, Barclaycard. Predominantly DM. Member DMA, IDM. www.dmp.co.uk 28 Iceberg Marketing Privately owned. Founded 1998. Chairman Clive Ingham; managing director Simon Knibbs. Clients include Loans.co.uk, Liverpool Victoria, Children's Society. Predominantly DM. Member DMA. www.iceberg-marketing.com Sharpen Troughton Owens Response* Subsidiary WPP. Founded 2005 (formerly Red Cell Response). Managing partner Martin Troughton; creative partner Gary Sharpen. Clients include Esure, Autoglass, Learn Direct. Member DMA, ISP, MCCA. www.sto-response.com 29 Kitcatt Nohr Alexander Shaw Privately owned. Founded 2002. Chairman Jeremy Shaw; managing director Marc Nohr. Clients include Virgin Holidays, NSPCC, VSO. Predominantly DM. Member DMA. www.kitcattnohr.com 30= Response One Direct Marketing Privately owned. Founded 1998. Managing director Patrick Sargeant. Clients include Redcats (UK), BSkyB, Open University. Predominantly DM. Member DMA, IDM. www.responseone.co.uk 30= Story UK Privately owned. Founded 2002. Chairman Susan Mullen; creative director David Mullen. Clients include First Direct, Scottish and Southern Energy, Direct Holidays. Predominantly DM. Member DMA, IPA. www.storyuk.com 32 23red Privately owned. Founded 2000. Chairman Jane Asscher; creative director Sean Kinmont. Clients include COI, Bacardi-Martini, Ciba Vision. Multi-discipline. Member DMA, IPA, ISP, IAB. www.23red.com 33 WDMP Privately owned. Founded 2002. Chairman Gavin Wheeler; chief executive Craig Wheeler. Clients include Carphone Warehouse, British Gas, Chelsea FC. Predominantly DM. Member DMA, MCCA. www.wdmp.co.uk 34 Carat Data Planning Subsidiary Carat. Founded 1999. Managing director Neil Jones. Clients include Royal Mail, British Gas, Dell. Multi-discipline. Member DMA, ISP. www.carat.co.uk 35 Liquorice Privately owned. Founded 1998. Managing director Quentin Boyes; creative director Alan Gilby. Clients include Trinity Mirror, Kettle Foods, LifeScan EMEA. Multi-discipline. Member MCCA. www.liquorice.net 36 Entire Privately owned. Founded 2000. Managing director Ian Stockley; creative director Ian Bates. Clients include Otto Group, Tourism Ireland, Vernons. Predominantly DM. Member DMA. www.theentirecompany.com 37 Geronimo Privately owned. Founded 1994. Chairman Julian Dodds; managing director Andy Snuggs. Clients include Nestle Purina, Sara Lee, Direct Line. Multi-discipline. Member DMA, ISP. www.geronimo.co.uk 38 Golley Slater Direct Subsidiary Golley Slater. Founded 2003. Chairman Chris Lovell; managing director Suzanne Coleman. Clients include Kraft Foods, British Army, Portman Building Society. Multi-discipline. Member DMA, ISP. www.golleyslater.co.uk 39 The JJ Group Privately owned. Founded 1989. Chairman James Goddard; managing director Robert Beck. Clients include Volvo, British Gas Business, Beefeater. Multi-discipline. Member DMA, IPA, ISP, BIMA. www.thejjgroup.com 40 Base One Privately owned. Founded 1987. Chairman John Stanton; managing director Richard Bush. Clients include Saab, British Gas Business, London Stock Exchange. Multi-discipline. Member DMA, IPA. www.base01.co.uk 41 Juice Privately owned. Founded 1990. Chairman Lesley Gear; managing director Rob Husband. Clients include Meat & Livestock Commission, AIG, L'Oreal. Predominantly DM. www.juice-uk.com 42 Liquid Communications Privately owned. Founded 1999. Managing partners Andy Annett, Olly Raeburn. Clients include News International, Scandinavian Airlines, Unilever. Multi-discipline. Member DMA. www.liquidcommunications.co.uk 43 Teamspirit Subsidiary Chime Communications. Founded 1995. Managing director Joanne Parker; creative director Richard Hayter. Clients include Scottish Widows, Norwich Union, Prudential. Multi-discipline. www.teamspirit.uk.com 44 Personal Communications Subsidiary Engine. Founded 2004. Managing director Chris Ward; creative director Jason Andrews. Clients include Barclays Global Investors, Bulldog, 3. Predominantly DM. Member IPA. www.personaluk.com 45 Communication Solutions Privately owned. Founded 1993. Chairman Martin Bowden; managing director Ian Smyth. Clients include EDF, TUI, AIG Health. Multi-discipline. www.communicationsolutions.co.uk 46 Bright Privately owned. Founded 2002. Managing director Jeremy Hall; creative director Chris Martin. Clients include Norwich Union, Thomson Holidays, Best Western Hotels. Multi-discipline. Member DMA. www.bright-uk.com 47 Red C Privately owned. Founded 1994. Chairman Howard Seaton; managing director Adrian Rowe. Clients include Littlewoods, Central Capital, Croner. Predominantly DM. Member DMA. www.redcmarketing.com 48 Presky Maves Privately owned. Founded 1997. Chairman Robin Presky; managing director Peter Worster. Clients include AXA Sun Life Direct, Glenfiddich, Achmea Group. Predominantly DM. Member DMA. www.preskymaves.com 49 Hall Moore CHI Privately owned. Founded 2004. Partners Simon Hall, Warren Moore. Clients include Carphone Warehouse, Telegraph Group, Royal Bank of Scotland. Multi-discipline. Member IDM. www.hallmoorechi.com 50 Watson Phillips & Norman Privately owned. Founded 2003. Chairman John Watson; creative director Maria Phillips. Clients include Picture Financial, Which?, PDSA. Predominantly DM. Member DMA. www.watsonphillipsnorman.com 51 Them Privately owned. Founded 1996. Managing directors Walter Denny, Sandra Lawrie, Rod Geoghegan. Clients include Renault, BUPA, Johnson & Johnson. Multi-discipline. Member IAB. www.themlondon.com 52 Crayon Direct Advertising Privately owned. Founded 2005. Director Omaid Hiwaizi; managing partner Richard French. Clients include BT, Norwich Union, Paradise Poker. Multi-discipline. Member DMA, ISP. www.crayonlondon.com 53 Mason Zimbler Privately owned. Founded 1997. Chairman Mark Mason; managing director James Trezona. Clients include Microsoft, Adobe, SAS. Multi-discipline. Member DMA, IPA. www.mzl.com 54 Flourish Privately owned. Founded 2004. Managing directors Rich Hartson, Neil Hecquet. Clients include BSkyB, Chelsea Building Society, Cornhill Direct. Predominantly DM. www.flourishdm.co.uk 55 Forth Marketing Services Privately owned. Founded 1991. Managing director Richard Bolton; creative director Philip Carson. Clients include CIS, Britannic Assurance, Legal & General. Predominantly DM. Member DMA. www.forthmarketing.co.uk 56 RAM Media Privately owned. Founded 1994. Chairman Paul Morley; chief executive Philip Nixon. Clients include Niagara Healthcare, Marie Stopes International, Strike Lucky Games. Predominantly DM. Member DMA, ISP. www.ram-media.co.uk 57 Mike Colling & Company Privately owned. Founded 2002. Chairman John Watson; managing director Mike Colling. Clients include Channel 4, PDSA, Which?. Predominantly DM. Member DMA, IPA. www.mcand.co.uk 58 Intelligent Marketing Privately owned. Founded 2003. Managing director Tricia Weener; creative director Andy Maxwell. Clients include Tchibo, Diageo, HSBC. Multi-discipline. Member DMA, ISP. www.intelligent-marketing.com 59 KHWS Privately owned. Founded 1993. Managing director Andrew Watts; chief executive Nick Hawkes. Clients include ExxonMobil, La Poste, Sony. Multi-discipline. Member DMA, ISP. www.khws.co.uk 60 Steel Privately owned. Founded 1980. Managing partners Andy Hinder, Stuart Pearson, Les Hughes, Rob Dinsdale. Clients include AOL, FT.com, Five. Predominantly DM. Member DMA, IAB. www.steel-london.co.uk 61 DSJ Privately owned. Founded 2002. Managing partners Mark Davison, Edmund Smiley-Jones. Clients include BBC Worldwide, Black & Decker, Carlsberg. Multi-discipline. Member ISP. www.dsjlondon.com 62 Barraclough Edwards Chamberlain Privately owned. Founded 2003. Managing director Nic Chamberlain; creative directors Chris Barraclough, Steve Edwards. Clients include Nectar, DaimlerChrysler, Morgan Stanley. Predominantly DM. Member IDM. www.beclondon.com 63 SOUK Response Privately owned. Founded 1991. Chairman Bill Hart; managing director Huw Williams. Clients include Radisson Edwardian, Tesco, Flybe. Multi-discipline. Member MCCA. www.soukresponse.com 64 Space Privately owned. Founded 2003. Managing partners David Atkinson, Guy Hepplewhite. Clients include Eurostar, Beiersdorf, Wrigley. Multi-discipline. Member ISP, MCCA. www.agencyspace.co.uk 65 Stephens Francis Whitson Privately owned. Founded 2005. Chairman Ben Stephens; creative director Neil Francis. Clients include More Th>n, eBookers, Callaway Golf Europe. Predominantly DM. Member DMA, IPA. www.sfwlondon.com 66 Spinnaker Privately owned. Founded 2004. MD Robert Goldsmith; chief executive Brooke Dalton-Brewer. Clients include National Bingo Game Association, Sony Pictures, BenQ-Siemens. Multi-discipline. Member DMA, IAB, IDM. www.spinnakerdirect.co.uk 67 TW Cat Privately owned. Founded 1997. Managing director Alastair Irons. Clients include Concern Worldwide, The Stroke Association, The Shaftesbury Society. Predominantly DM. Member DMA. www.twcat.co.uk 68 Keevill Barton Kershaw Privately owned. Founded 2003. Chairman Steve Barton; creative directors Phil Keevill, Simon Kershaw. Clients include Alpha Telecom, WPA Insurance, Lutron. Multi-discipline. Member DMA, IPA. www.kbklondon.com 69 Snowball Privately owned. Founded 2003. Chairman Damian Bentley. Clients include Bang & Olufsen, Dunhill, Technogym. Predominantly DM. Member DMA. www.snowball.co.uk 70 Agency Inc Privately owned. Founded 2003. Managing director Matthew Morgan; creative director Tim Diviny. Clients include Companies House, Generali, Rugby Football Union. Multi-discipline. Member DMA. www.agencyinc.co.uk 71 Cognito Integrated Marketing Privately owned. Founded 2002. Managing director Karl Heasman. Clients include Nivea, Acentic, NTL. Multi-discipline. Member DMA, ISP. www.cognitomarketing.com * Source: Companies House financial data provided by Willott Kingston Smith for companies affected by the Sarbanes-Oxley Act ** Figures are for 2003
THE SARBANES-OXLEY EFFECT
For agencies affected by the US Sarbanes-Oxley Act, which restricts the information firms are allowed to make public, we have used Companies House data provided by Willott Kingston Smith. They have been placed in the main table as a guide, but not ranked. In most cases the latest data is for the 2004 financial year, though in the case of Triangle, MRM Worldwide and FCBi London, only 2003 figures are available. Since last year, WWAV Rapp Collins has consolidated the figures for all its offices, and now includes media buying revenues. Unfortunately no figures are available for Draft London, OgilvyOne and Harrison Troughton Wunderman.
TOP 5 FOR GROWTH - BIG AGENCIES Agency Gross profit Gross profit % 2005 (pounds) 2004 (pounds) change 1 Gyro International 11,400,000 4,700,000 143 2 Millennium Network 8,100,000 4,400,000 84 3 Iris 12,300,000 7,635,558 61 4 Billington Cartmell 8,170,000 6,027,000 36 5 Tullo Marshall Warren 14,100,000 11,300,000 25 TOP 5 FOR GROWTH - SMALL AGENCIES Agency Gross profit Gross profit % 2005 (pounds) 2004 (pounds) change 1 Personal Communications 1,627,383 199,947 714 2 Keevill Barton Kershaw 503,000 204,000 147 3 Flourish 1,378,277 583,421 136 4 Barraclough Edwards Ch. 729,168 338,652 115 5 Intelligent Marketing 1,119,485 582,278 92