Y & R; Completes Its Move to OC and Into No.1 Slot; Employment Up 12%
Advertising agencies on this year’s Business Journal list made substantial gains, both in billings and in employees.
This year’s 50 largest agencies saw a 46% increase in their combined billings to $2.60 billion. Comparing this year’s list to last year’s, billings increased by 51%. Employment at this year’s 50 companies rose 19%, and it was up 28% list-to-list.
The numbers are skewed by No. 1 Young & Rubicam, which posted a whopping 1,793% gain, up from $30 million last year to $567.9 million. That reflects the shop’s completion of its move from Michigan and adding 131 more employees to get up to speed here in 1999, to service the account of Lincoln Mercury, which moved here in 1998. (See related story on page 31.)
Y & R; also merged all of its departments under one roof and moved from temporary space in the airport area into the Irvine Spectrum. David Murphy, president of Y & R; Advertising, Irvine said the new Irvine office is growing its business with dot-coms, which seem to have bulky wallets full of marketing dollars. In fact, other agencies express the same vision of business growth: riding the dot-com wave.
Excluding Y & R;, ad agency billings bulked up 16%.
Rounding out the first five slots on the list are No. 2 FCB Southern California, No. 3 Doner, No. 4 Bates USA West and No. 5 Pacific Communications. All posted double-digit gains in billings in 1999.
FCB says it is growing its existing accounts and its dot-com business. It just secured a $23 million contract with Irvine-based Oinke.com, an online commercial real estate loan auction house. The agency also has moved to cut its overhead, merging its Southern California offices under one management in September. It is looking for space to consolidate its three OC offices.
Doner’s billings jumped 30% to $325 million in 1999. This year, it is feverishly pursuing dot-com business. It picked up a $30 million national advertising campaign for Fountain Valley-based Internet start-up PiNGPoNG.CoM last month, after that firm split with FCB over creative differences. Its other dot-coms include the $20 million account of San Diego-based RealAge.com and Aliso-Viejo-based IntelliFutures.com. It also retains the $250 million Mazda account, which brought Doner to OC two years ago.
Bates USA West president Tim Hart attributes his firm’s growth,it was up 18% to $200 million,to its old-economy business as well as its new dot-com clients. It recently secured the Anaheim-based Pacific Sunwear account, a $4 million to $6 million account. Bates also is growing alongside its Fountain Valley-based Hyundai Motor America account, which it has held for 15 years. The carmaker posted an 83% increase in sales last year, Hart said.
Boosting its attractiveness in the new economy, Bates added an interactive division, which employs seven but that number is expected to double in the near future.
“Clearly the dot-coms have changed the whole landscape,” Hart said.
Meanwhile, Pacific Communications is growing within the booming healthcare niche, increasing its billings 29% in 1999 to $101.9 million.
No. 7 DGWB added 40 employees for a total of 95. Most notably, it picked up the estimated $20 million to $30 million national advertising contract of Toshiba America Information Systems Inc.’s Computer Systems Division, increasing its billings from $55 million to $85.7 million.
Besides Y & R;, other list leapers include No. 18 Nine Dots Corp. and No. 34 Espirit Communications. Nine Dots, which considers itself an interactive marketing service, is making headway in securing dot-com business and launching its brick-and-mortar clients’ online businesses. It is consulting for GM’s interactive division and overhauling Rainbow Technologies’ web site.
Agencies that had declines in billings included No. 30 Koppes & Partners Advertising, whose billings dropped from $15 million in 1998 to $12 million. Its staff decreased from 18 to 12. President Larry Koppes said that for personal reasons he wanted to lower the agency’s overhead and concentrate on smaller dot-coms in IPO mode. Like many other agencies, it outsources its web-design work.
No. 39 GreenLight Communications reduced its staff from 20 to 14 and its billings went down nominally from $8 million to $7.7 million. Robert Mooers, president and CEO of GreenLight, said the firm reduced its raw creative staff, and now an inhouse creative director supervises outsourced art and copy people.
New to the list are: No. 33 Walter Latham, No. 40 Jann Church Partners, No. 42 Priscomm, No. 44 Advantage Plus Marketing Group, No. 45 Burton, Livingstone & Kirk, No. 49 Martin Advertising/PCW and No. 50 Tower Marketing International.
Perhaps most interesting about this year’s list is the increase in the percentage of marketing dollars spent by ad agencies on online advertising and the increase in the number of agencies marketing their clients online. Last year, on average, agencies spent 11.5 % marketing online, and this year they spent an average of 14.25%. In addition, more agencies decided to increase their online budgets. Last year 32 agencies spent money marketing their clients online. This year, all but eight agencies allotted funds for online advertising. n
