With some clients pulling back on work or deferring it to this year given the uncertainty around COVID-19, the 20 largest agencies in OC reported a collective 6.8% decline in 2020 revenue from the prior year to a total of $1.9 billion, according to this week’s Business Journal list.
Agency payrolls locally grew a modest 0.9% to 1,477 workers.
Discovery Networks Account
Irvine-based SCS, which rounded out the top five, saw revenue decline by 21% to $34 million in 2020, which was the result of losing Irvine’s Boost Mobile in late 2019 as a result of parent Sprint’s merger with T-Mobile and the subsequent sale of Boost Mobile to Dish.
Some layoffs resulted from the account loss in 2019, but the agency was able to stave off any additional cuts last year keeping its headcount at 125.
“Our very diverse mix of [business-to-consumer] clients across all categories resulted in a well-weathered year in 2020, despite the pandemic,” said President and Chief Strategy Officer Jeff Roach, who noted the agency’s 2020 bottom line was stronger than what it was in 2019.
The projection for this year is looking bright, with Roach estimating gross revenue in 2021 to be about $50 million, with the win of Discovery Networks late last year to help with the launch of streaming service discovery+, in addition to recent accounts wins of SeroVital, Nexstar Media Group Inc. and Purple. That’s alongside a ramp in work from existing clients, such as Spectrum Brands.
Roach noted “2021 is looking to be a record year for the agency” with “optimism in the markets and new levels of consumer spending.”
Ownership Change
SCS wasn’t the only one to note a 2020 pullback in work with this year now picking back up quickly.
No. 7 Casanova//McCann, which saw the head of the Costa Mesa agency, Ingrid Otero-Smart, buy a majority stake of the Hispanic and multicultural agency last year, reported 2020 revenue down 4% to $24 million.
The decline was largely the result of delayed work stemming from uncertainty around the pandemic, but the agency said they lost no accounts in 2020.
“Absolutely the work has been picking up, a lot,” Otero-Smart said. “We’ve been working nonstop since we got back from the holidays. We actually have been trying to recruit more people because there’s so much work and that’s mostly from our existing clients. We also have a couple new clients.”
Otero-Smart said details on the new account wins are forthcoming, pending those companies’ approval.
A renewed interest, she said, among many clients to invest in multicultural marketing has helped with the 2021 ramp in work and new inquiries.
“For 2021, I am super bullish on the year for us,” Otero-Smart said. “Obviously in this new era as an independent shop, it’s really opened up new categories for us that, before, we could not go after. And, with the increase in multicultural, we expect significant growth in 2021 and beyond.”
Hiring Mode
In contrast to some, Costa Mesa-based Skiver Advertising Inc. seemed to not miss a beat last year, despite 2020’s challenges.
The agency moved up three spots on the list to No. 11, notching a 25% increase in revenue to $15 million. Last week, the agency hired two employees and is close to bringing on a third, according to CEO and founding partner Jeremy Skiver.
Skiver pointed to last year’s win of business from Lake Forest-based Del Taco Restaurants Inc. (Nasdaq: TACO), in addition to investments in the agency itself.
“Beyond [the Del Taco win], we looked at the pandemic as an opportunity to invest in ourselves and that investment is already paying dividends,” Skiver said.
“COVID turned our industry on its head and many agencies had to pivot. We chose to invest in our team and our production capabilities.”
That meant hiring a director, producer and an editor. The agency’s studio also received a boost with new camera gear and lighting for TV, video and social content production.
“We can now produce broadcast quality work in our studio, or take the show on the road wherever we need to go,” Skiver said.
