Look who’s writing the checks now.
Client spending is up. Agency buyouts are all but over. Organic growth is back, a welcome change from the acquisition blitz that defined the turn of the century.
Marketers are spending more with their current agencies, and revenues are up for two-thirds of the shops on our list. In all, 77 agencies report at least some two-year growth, from a scant 0.5% (No. 40 Guild Group) to a whopping 1,634% ($2.3 million in new revenues for once-tiny Concept One, No. 27).
Ten of the top 25 agencies said at least half their 2003 growth came from current clients. (Spending bumps made up 24% to 48% of growth for the rest.) Organic growth is more stable — and more sustainable — than acquisitions.
Of the 20 Top 25 shops that broke out their revenue growth for us, only one bought business in 2003: Equity Marketing’s September purchase of SCI Promotion Group added $20 million to $25 million in billings. (The five shops that didn’t report breakouts are part of publicly held networks that forbade financial disclosure; see How We Did It for more details.)
Some shops on the list changed hands last year. WPP Group got 141 Worldwide as part of its August purchase of the failed Cordiant Communications Group. Omnicom Group bought Pierce Promotions & Event Management in August and added it to its event marketing division, The Radiate Group. Grey Global Group set a joint venture with food broker Crossmark to merge J. Brown/LMC Group with Crosscut, a first for the industry (see p. 84).
This year may see a few acquisitions. Japanese conglomerate Dentsu is talking with Tipton & Maglione (No. 56); the New York City shop has a two-year-old alliance with Dentsu’s U.S. division, DCA, that swaps T&M’s promotions and graphic design work for DCA’s advertising and p.r. The GEM Group (No. 33) and Aspen (No. 52) began as rollups to be groomed for sale. And DVC Worldwide’s primary backer, Lake Capital (since 2000), is known for building solid rollups, then selling — as it did with 141 Worldwide.
Acquisition hangovers
The 1998-2001 buyout binge gave some shops indigestion. Many didn’t find the synergy they hoped for in big networks — then felt increasing pressure to pick up the slack for ailing ad siblings (August 2003 Promo).
The pendulum is starting to swing back with divestitures, realignments and startups. Marketing Drive Worldwide (No. 68) sold off or moved business to other Interpublic Group of Cos. agencies in order to focus on its core expertise, national promotions and co-marketing. It closed or sold offices in the U.K., Paris and Asia, and ended 2003 with 10 offices in North America, focused on organic growth.
Hawkeye|Group sold off two telemarketing and fulfillment businesses (combined revenues: $32.67 million) to focus on its core promotions and direct-marketing work. (Excluding those units, revenue rose 11.9% from 2001.)
Alloy, Inc. shifted $3 million in business to AMP Agency from two smaller sister shops as it realigned disciplines (see Agency of the Year on p. 46).
A few veterans of network buyouts started their own shops again. Mark Shapiro, the Momentum North America CEO let go in May 2003, founded Cha-Ching in St. Louis; Botsford Group was reborn last month under founder David Botsford after parent Interpublic Group of Cos folded the original Atlanta shop and absorbed its clients and staff. Neither is on the list — they’re too young — but are noteworthy as harbingers of more second-chance startups as disillusioned execs complete their earn-outs.
Apples to Potatoes
It’s always hard to compare shops — they differ so much by size, specialty, client roster and locale. Harder still is comparing the work; campaigns are so different in scope and strategy. In all, we look for results (read: sales figures and other quantifiable campaign metrics), for bright ideas, for a distinctive fit to the brand.
This is the first year that the Promo 100 has focused specifically on U.S. revenues. That affects the eight shops that reported overseas revenue (see chart on p. 61), but it gives a more accurate picture for marketers interested in U.S. expertise, and a more direct comparison for all shops listed.
Four agencies are newcomers to the Top 10 this year:
Tracy Locke Partnership rose to No. 3 (from No. 17) on its size and quality campaign work.
Velocity Sports & Entertainment hit No. 5 (from No. 25) with steady growth and respectable work.
EastWest Creative ranked No. 6 (from No. 43 in 2002 and a year off in 2003) with the highest-scoring campaign work and decent growth.
Arnold Brand Promotions landed at No. 8 in its first time on the list, thanks to excellent campaign work.
Three shops have returned to the Top 10:
No. 1 GMR Marketing (No. 12 in 2003, No. 1 in 2002) rebounded with respectable growth (on a large revenue base) and ace campaign work.
No. 7 Draft (No. 11 in 2003, No. 3 in 2002) is biggest in revenue and presented strong campaign work.
No. 9 Momentum North America (No. 21 in 2003, No. 4 in 2002) is among the biggest shops, and scored well with its campaign work.
Some familiar names have dropped from the top of the list. The top four shops in 2003 have fallen from the Top 10 — or off the list altogether.
360 Youth, No. 2 last year, conceded the stage to sib AMP Agency and didn’t even enter this year (see Under the Radar on p. 61).
DVC Worldwide (to No. 13, from No. 1), with half its work in the U.K.
141 Worldwide (to No. 45, from No. 3), which lost an estimated $14 million in U.S. revenues when Allied Domecq left in October.
CoActive Marketing Group (to No. 26, from No. 4), whose 2002 Eat Like a Champion campaign dominated our campaign work ranking and was a tough act to follow.
The steady Eddy? PowerPact, No. 5 last year and this, thanks to stable growth and consistently good campaign work: Its sales force program for Aventis’ breast-cancer drug won PRO Awards in 2002 and 2003.
One thing readers won’t notice is how many agencies didn’t make the 100 list. We had more qualified entries this year than ever before — a sign that business is up and agencies are eager to share their stories. That bodes well for the industry this year and beyond.
“Reasonable Range”
The Marketing Agencies Association Worldwide (MAA) has estimated that the average net revenue per employee within a U.S. promotion agency is $125,300. Because of variations among promotion disciplines (such as strategy, execution, creative, fulfillment and games administration), MAA suggests that a variation of 25% above or below that benchmark is within the “reasonable range” of revenue productivity per employee.
Agencies reporting results outside this range may be questionably high or inefficiently low, per MAA. To facilitate such comparisons, the Promo 100 ranking chart (beginning on p. 62) includes per-employee revenue figures (for full-time staffers); that information does not impact the rankings.
How We Did It
PROMO’s editors use a proprietary formula to arrive at the PROMO 100 rankings. It has been refined over the years, but in essence, agencies agree to be evaluated quantitatively (on net revenue and two-year growth) and qualitatively (on the quality of work in three campaigns conducted during the past year).
Agencies submitted a copy of their corporate tax returns or a letter from an outside auditor certifying gross billings and net revenues (gross billings minus pass-through charges, such as premiums or printing) for 2001, 2002 and 2003. (In some cases, a letter from the chief financial officer of an agency’s parent company was accepted.)
Agencies also provided descriptions, quantifiable results and art from three campaigns that best reflect the quality of work in 2003. PROMO’s editors evaluate all campaigns and give a numeric score; agencies are ranked according to their total tally, and that rank is factored into agencies’ overall score.
Agencies were ranked three ways: by 2003 net revenue, by net-revenue growth from 2001 to 2003, and by campaign work. The three elements were added together as equal parts (33.3%) of an agency’s total final score.
To set the Top 25 ranking, PROMO’s editors also considered recent account wins and losses; industry awards; management stability; average length of service with clients and agency-of-record status; and breadth of marketing services.
This year, sixteen agencies did not provide verifiable revenue data. Their parent companies — the four publicly held agency networks — forbade them from disclosing financial data, citing the 2003 Sarbanes-Oxley Act governing financial disclosures. PROMO editors estimated these agencies’ net revenues using verified data from 2001 and factoring in account wins/losses, acquisitions and spending fluctuations among current clients.
This is the second year that PROMO has had to estimate revenue for these agencies, so the revenue and two-year growth data come with this caveat: These numbers are not verifiable. All estimates are marked with an asterisk.
Rank by Growth
| RANK | AGENCY | 2003 U.S. REVENUE | 2001 U.S. REVENUE | 2-YR% GROWTH |
|---|---|---|---|---|
| 1 | ConceptOne Communications | 2,498,907 | 144,108 | 1,634% |
| 2 | Active Marketing Group | 4,494,000 | 887,000 | 407 |
| 3 | Marketing Lab | 1,224,536 | 311,457 | 293 |
| 4 | Relay Sponsorship & Event Mgmt | *8,470,000 | *2,300,000 | 268 |
| 5 | PromoWorks | 17,524,800 | 4,764,577 | 268 |
| 6 | Worktank Creative Media | 858,818 | 235,761 | 264 |
| 7 | AMP Agency | 49,550,000 | 17,283,000 | 187 |
| 8 | Civic Entertainment Group | 1,410,000 | 538,804 | 162 |
| 9 | LeadDog Marketing Group | 754,835 | 302,199 | 150 |
| 10 | ePrize, LLC | 6,440,474 | 2,625,313 | 145 |
| 11 | Eventive Marketing | 3,725,470 | 1,677,473 | 122 |
| 12 | PowerPact LLC | 7,416,254 | 3,404,761 | 118 |
| 13 | Javelin | 2,257,245 | 1,234,254 | 83 |
| 14 | Velocity Sports & Entertainment | 9,834,467 | 5,411,000 | 82 |
| 15 | Harwood Marketing Group | 5,081,219 | 2,798,713 | 82 |
| 16 | Pro Motion | 3,077,935 | 1,781,581 | 73 |
| 17 | Cramer-Krasselt Co. | 4,910,000 | 2,850,000 | 72 |
| 18 | GMR Marketing | *83,000,000 | *49,107,586 | 69 |
| 19 | Alpha Marketing | 750,247 | 468,686 | 60 |
| 20 | Strottman International | 10,164,200 | 6,553,500 | 55 |
| 21 | Penn Garritano | 2,127,135 | 1,380,043 | 54 |
| 22 | Promote It International | 1,547,985 | 1,024,977 | 51 |
| 23 | Brand Fuel Promotions | 1,643,591 | 1,092,871 | 50 |
| 24 | TSE Sports & Entertainment | 3,304,093 | 2,216,590 | 49 |
| 25 | Promotion Group Central | 3,462,481 | 2,339,901 | 48 |
| *Indicates a PROMO estimate | ||||
Rank by Campaign Work
| RANK* | AGENCY | REPRESENTATIVE CAMPAIGN |
|---|---|---|
| 1 | EastWest Creative | The Lord of the Rings Adventure Card (New Line Cinema) |
| 2 | Arnold Brand Promotions | Pods Unite (Volkswagen of America, Apple Computers) |
| 3 | GMR Marketing | The AXE House Party (Unilever) |
| 4 | Seismicom | Name Your Plane (Boeing) |
| 5 | PowerPact | Swiffer/Trading Spaces Design Secrets for Your Home (Procter & Gamble) |
| 5 | Tracy Locke Partnership | Pepsi Play for a Billion (Pepsi-Cola Co.) |
| 7 | Civic Entertainment Group | Airline (A&E Network) |
| 8 | DVC Worldwide | Angels in Action (Georgia-Pacific) |
| 9 | AMP Agency | 2003 hp Bringing It Home Tour (Hewlett Packard) |
| 9 | Colangelo Synergy Marketing | Post Cereals’ Postopia.com (Kraft Foods) |
| 9 | Momentum North America | American Express Blue with Sting (American Express Co.) |
| 9 | Ryan Partnership | SouperStar Fantasy (Campbell Soup Co.) |
| 13 | The Guild Group | Starbucks Bravo Sponsorship (Starbucks Coffee Co.) |
| 13 | Velocity Sports & Entertainment | FedEx the Ultimate Air & Ground Game (FedEx) |
| 15 | Draft | American Dream (American Airlines) |
| 15 | Zipatoni | Born to Be Miller Time (Miller Brewing Co.) |
| 17 | Eric Mower & Associates | Stars on Broadway (Fisher-Price, Toys ‘R’ Us) |
| 17 | Promotion Group Central | Enter the New Reality (Samsung Communications) |
| 19 | Publicis Dialog | Nescafé Iced Java tour (Nestlé) |
| 20 | GEM Group, Inc. | Digital Digs (Tech TV) |
| 21 | Equity Marketing | The Rugrats Meet the Wild Thornberrys Travel Adventures (Burger King) |
| 21 | Renegade Marketing Group | HSBC BankCab (HSBC) |
| 23 | ePrize, LLC | The nwa.com Check-In Instant-Win Game (Northwest Airlines) |
| 23 | Marketing Werks | PlayStation2 Tour (Sony Computer Entertainment America) |
| 25 | Jack Morton Worldwide | Toyota Presents Sports Illustrated’s 50th Anniversary Tour (Sports Illustrated) |
| *Duplicate rank numbers reflect a tie score | ||
Rank by Revenue
| 2004 Rank | AGENCY | 2003 U.S. Net Revenues | 2-Year Growth % |
|---|---|---|---|
| $20 MILLION AND UP | |||
| 1 | Draft | *$338,000,000 | 13% |
| 2 | Carlson Marketing Group | 234,000,000 | -12 |
| 3 | Digitas | 209,470,000 | -11 |
| 4 | Wunderman | *188,812,200 | 9 |
| 5 | Bensussen Deutsch & Assoc. | 117,882,000 | 10 |
| 6 | Jack Morton Worldwide | *111,000,000 | 13 |
| 7 | The Integer Group | *97,000,000 | 3 |
| 8 | Frankel | *93,230,000 | 4 |
| 9 | Tracy Locke Partnership | *87,087,000 | 21 |
| 10 | GMR Marketing | *83,000,000 | 69 |
| 11 | Momentum North America | *60,562,000 | 9 |
| 12 | Marketing Drive Worldwide | *55,000,000 | -32 |
| 13 | Hawkeye|Group | 49,921,000 | -8 |
| 14 | Ryan Partnership | 49,839,000 | 1 |
| 15 | AMP Agency | 49,550,000 | 187 |
| 16 | DVC Worldwide | *49,493,000 | 8 |
| 17 | Publicis Dialog | *43,000,000 | 19 |
| 18 | Equity Marketing | 40,203,000 | 12 |
| 19 | Aspen Marketing Group | 39,194,574 | 10 |
| 20 | The Marketing Store | 35,416,000 | 25 |
| 21 | 141 Worldwide | *35,000,000 | -11 |
| 22 | Summit Marketing | 34,705,344 | -8 |
| 23 | CoActive Marketing Group | 32,037,000 | 28 |
| 24 | Modem Media | 31,035,000 | -28 |
| 25 | J. Brown Agency | *30,145,000 | 4 |
| 26 | The Spark Agency | 29,131,598 | 7 |
| 27 | Zipatoni | *28,277,000 | 1 |
| 28 | Gage | 26,578,000 | -43 |
| 29 | Jack Nadel, Inc. | 25,905,105 | -0.3 |
| 30 | Mars Advertising | 25,600,000 | 22 |
| 31 | Arnold Brand Promotions | *22,500,000 | 25 |
| 32 | Marden-Kane | 21,267,026 | 3 |
| 33 | Colangelo Synergy Mktg | 20,195,673 | 21 |
| $7 TO $18 MILLION | |||
| 34 | Eric Mower & Associates | $18,768,010 | -8% |
| 35 | PromoWorks | 17,524,800 | 268 |
| 36 | National Tour | 13,600,000 | 12 |
| 37 | The GEM Group | 13,201,113 | 7 |
| 38 | EastWest Creative | 12,535,902 | 40 |
| 39 | Noble World Communications | 11,374,681 | 39 |
| 40 | BDS Marketing | 10,882,345 | -5 |
| 41 | Strottman International | 10,164,200 | 55 |
| 42 | Velocity Sports & Entertainment | 9,834,467 | 82 |
| 43 | Source Marketing | 9,625,000 | 10 |
| 44 | The Guild Group | 9,128,000 | 1 |
| 45 | Mastermind Marketing | 9,120,000 | 15 |
| 46 | Media Logic | 8,930,764 | 15 |
| 47 | Relay Spshp & Event Mgmt | *8,470,000 | 268 |
| 48 | Malone Advertising | 7,468,314 | 15 |
| 49 | PowerPact LLC | 7,416,254 | 118 |
| 50 | Pierce Prmtns & Event Mgmt | *7,056,000 | 36 |
| $3 TO $6 MILLION | |||
| 51 | Don Jagoda Associates | $6,978,052 | 5% |
| 52 | PriceWeber Marketing | 6,443,000 | -32 |
| 53 | ePrize, LLC | 6,440,474 | 145 |
| 54 | Harwood Marketing Group | 5,081,219 | 82 |
| 55 | Cramer-Krasselt | 4,910,000 | 72 |
| 56 | Marketing Connections Group | 4,778,097 | 43 |
| 57 | Renegade Marketing Group | 4,705,576 | -14 |
| 58 | BFG Communications | 4,642,420 | 31 |
| 59 | Active Marketing Group | 4,494,000 | 407 |
| 60 | Latitude | 4,359,000 | 30 |
| 61 | Momentum Mktg Services Corp. | 4,302,075 | 41 |
| 62 | Tipton & Maglione | 4,181,800 | 39 |
| 63 | Marlin Entertainment | 3,987,000 | 36 |
| 64 | Seismicom | 3,787,586 | -4 |
| 65 | Eventive Marketing | 3,725,470 | 122 |
| 66 | Promotion Group Central | 3,462,481 | 48 |
| 67 | TSE Sports & Entertainment | 3,304,093 | 49 |
| 68 | Campaigners | 3,208,405 | 41 |
| 69 | Pro Motion | 3,077,935 | 73 |
| $1.5 TO $2 MILLION | |||
| 70 | Wencel/Hess | $2,952,783 | 13% |
| 71 | The Regan Group | 2,854,212 | 32 |
| 72 | Next Marketing | 2,791,310 | -10 |
| 73 | Marketing Werks | 2,702,119 | 26 |
| 74 | IMC | 2,618,935 | -43 |
| 75 | ConceptOne Communications | 2,498,907 | 1,634 |
| 76 | Idea Connections | 2,426,742 | -6 |
| 77 | B.A.R.C. Communications | 2,363,833 | -39 |
| 78 | The A Team | 2,350,000 | 5 |
| 79 | Javelin | 2,257,245 | 83 |
| 80 | Three Wide | 2,212,883 | -6 |
| 81 | Penn Garritano | 2,127,135 | 54 |
| 82 | Roundhouse Mktg & Prmtns | 2,095,185 | -3 |
| 83 | Vertical Marketing Network | 1,869,655 | 44 |
| 84 | Brand Fuel Promotions | 1,643,591 | 50 |
| 85 | Promote It International | 1,547,985 | 51 |
| UP TO $1.4 MILLION | |||
| 86 | WatersMolitor | $1,455,600 | -21% |
| 87 | Firehouse | 1,439,000 | 16 |
| 88 | Civic Entertainment Group | 1,410,000 | 162 |
| 89 | Centra Marketing & Commns | 1,248,000 | 1 |
| 90 | Marketing Lab | 1,224,536 | 293 |
| 91 | Ervin Mktg Creative | 1,066,158 | 47 |
| 92 | SJI Promotions | 1,006,700 | 8 |
| 93 | Object 9 | 1,003,616 | 21 |
| 94 | Makai Events & Promotions | 1,001,878 | -29 |
| 95 | Worktank Creative Media | 858,818 | 264 |
| 96 | LeadDog Marketing Group | 754,835 | 150 |
| 97 | Alpha Marketing, Inc. | 750,247 | 60 |
| 98 | Grand Central Marketing | 560,542 | 18 |
| 99 | tkmw | 424,084 | 19 |
| 100 | Promotion Mgmt Corp. | 278,206 | 16 |
| *Indicates a PROMO estimate | |||
UNDER THE RADAR
Agencies from the 2003 PROMO 100 that are not ranked this year (and why)
360 Youth
didn’t enter, to quell confusion with sibling AMP Agency; see Agency of the Year, p. 46
Alcone Marketing
didn’t enter
ARC
merged with Frankel to form ARC North America
Botsford Group
folded by parent IPG; reopened under founder David Botsford in May 2004
Catalyst
rescinded its entry
CCM
entered but did not qualify
CMI
didn’t enter
Entertainment Marketing, Inc. folded in May 2004
HWB
didn’t enter
Impact Marketing & Promotions entered but did not qualify
Integrated Marketing Services of New York
didn’t enter
Kicking Cow
didn’t enter
KK&A
didn’t enter
Langworth Pantel
became Langworth Promotion Group in December 2003 when principal Frank Langworth bought out partner Mark Pantel
Promotion Network Inc.
didn’t enter
Launch Creative Marketing
entered but did not qualify
Marketing Edge
entered but did not qualify
Marketing Expressions
entered but did not qualify
Ott Communications
didn’t enter
Shumsky Enterprises
didn’t enter
Unicom Marketing Group
entered but did not qualify
Upshot
now part of Equity Marketing
Ventura Associates
entered but did not qualify
| Worldwide Net Revenue | |
|---|---|
| Carlson Marketing Group | $318,400,000 |
| DVC Worldwide | 98,986,000 |
| Marketing Store | 83,727,000 |
| Hawkeye Group | 61,200,000 |
| Equity Marketing | 51,279,000 |
| Ryan Partnership | 49,839,000 |
| GEM Group | 29,918,187 |
| Velocity Sports & Entertainment | 9,974,600 |
Network
