Lots of drama unfolded at Orange County’s largest advertising shops during the past year.
Agencies fought to retain business and win new work. But several saw accounts shift elsewhere, had to cut workers and regroup.
The changes led to a change at the top of the list, with longtime leader Young & Rubicam Brands in Irvine yielding the No. 1 spot to W.B. Doner Co. in Newport Beach.
Total OC capitalized billings for 2005 slipped 8% to $2.3 billion, versus a year earlier, according to this year’s list of the area’s 50 biggest shops.
But minus estimated declines at No. 2 Y & R; and No. 3 Foote, Cone & Belding Inc., the rest of the ad shops posted a 10% gain in billings.
OC ad shops employed 1,797 workers, flat versus a year ago.
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National ad spending rose 3% in 2005 to $143 billion, according to a recent report by TNS Media Intelligence, a New York-based media spending tracker.
Some big advertisers got more cautious and cut back on spending, TNS said.
2006 ad spending is expected to be a bit better,at least on a national level. In the U.S., ad spending is expected to increase 5.4% to $152 billion this year, according to a TNS forecast.
Locally, ad executives also are optimistic.
“Thanks to TV shows like ‘The O.C.’ and MTV’s ‘Laguna Beach,’ there seems to be a renewed interest in the area,” said Jon Gothold, partner and executive creative director at No. 6 DGWB Advertising Inc. in Santa Ana. “We’ve seen it play out in the business world.”
Y & R; and Foote, Cone & Belding, known as FCB, dominated the news last year.
Y & R;, part of Britain’s WPP Group PLC, slipped to No. 2 on the list, with an estimated $320 million in OC capitalized billings, down from an estimated $475 million a year earlier. Y & R;’s workers are estimated at 290, down 17%.
Rick Eiserman took the helm of the local unit in late January. He replaced David Murphy, who resigned from Y & R; in November to take a job as president of Saatchi & Saatchi Worldwide Inc.’s Torrance office.
Eiserman knows the ropes at Y & R;, having worked with the company and its subsidiaries for 11 years. His last post: chief executive at BrandBuzz, a marketing arm of Y & R; in New York.
Eiserman relocated from the East Coast. His charge: building momentum at the OC shop.
Last year, Sony Electronics Inc. and Ford Motor Co.’s Jaguar Cars took their advertising business elsewhere. The Irvine office lost an estimated $200 million in combined yearly billings with the departures.
Wunderman, a Y & R; division, still handles Jaguar marketing.
But Y & R; had some wins, including the $40 million to $50 million ad account from Beverly Hills-based Hilton Hotels Corp., which it snagged from FCB, and more recently the Los Angeles Dodgers.
In a recent Business Journal interview, Eiserman called the Irvine office a “hidden jewel” within Y & R; that has “some great work, great talent and a great model but lots of unrealized potential.”
His initial focus: satisfy current clients. They include El Segundo-based Mattel Inc., Carlsbad-based Callaway Golf Co. and Ford Motor Co.’s Land Rover North America unit in Irvine.
FCB slipped a spot to No. 3, with an estimated $200 million in OC capitalized billings and an estimated 120 workers.
It was a rough year for FCB, which is a unit of New York’s Interpublic Group of Cos. Its Irvine office scaled back and cut some 20 workers after its $230 million Taco Bell Corp. account shifted to FCB Chicago and was combined with other work.
The shop now reports to FCB’s San Francisco office and is overseen by Dominic Whittles, FCB San Francisco president. Former Irvine FCB president Jon Tracosas left.
FCB also lost the Hilton account to Y & R.; No. 7 O’Leary and Partners in Newport Beach had snatched the Kawasaki Motor Corp. account a few years back. Whittles could not be reached for comment.
Emerging as the top OC agency by billings was W.B. Doner Co. in Newport Beach.
Known as Doner, the ad shop moved up two spots on estimated billings of $350 million. The shop, a unit of Southfield, Mich.-based W.B. Doner & Co., has an estimated 120 workers in OC.
Agency president Tim Blett said last year the shop lost work with Cypress-based PacifiCare Health Systems Inc. after the company was bought by Minnesota’s UnitedHealth Group Inc.
But Doner offset the loss by nabbing some new accounts, such as Memorex Products Inc. and Public Storage Inc. The shop also increased its work with Mazda North American Operations and added Mazda Motor de Mexico to its mix, Blett said.
No. 4 Casanova Pendrill Inc. of Costa Mesa reported $170 million in OC billings, up 13% from last year. Its OC workers jumped 15% to 75.
‘Breakout Year’
No. 5 Pacific Communications in Costa Mesa saw a 30% jump in billings to $169 million.
The shop had posted single-digit growth since 2001, but last year it had a “break-out year,” said President Ryan Abbate.
“The great thing about last year is not the growth but how we grew,” Abbate said.
The shop got new clients and increased work with current ones, he said. Pacific Communications grew assignments with Irvine-based Allergan Inc. It also won the global account for MiniMed’s diabetes division.
Other gainers were No. 11 Marshall Advertising & Design Inc. in Costa Mesa, which had billings of $52 million, up 20%, and No. 13 Newport Beach-based Inter-Communications Inc., which saw a 50% jump in billings to $45 million from real estate work.
Marshall President Diana Marshall said the shop saw an increase in advertising budgets, primarily in television.
No. 26 Estey-Hoover Inc. saw a 10% jump in billings to $16.2 million.
Among the ad shop’s wins: Eagle Roofing, Hampton Products International Corp. and CPS Security Solutions. The shop’s loss: Alacer Corp.
“Consumer confidence has been growing and so have budgets,” said Chief Executive Dan Hoover.
Three shops debuted on the list: No. 25 Most in Newport Beach, No. 49 iDirect Marketing Inc. in Irvine and No. 50 AMR Advertising and Public Relations in Fullerton.
