NOISE MAKERS: Here are 10 shops that perked up ears and sales in ’99
STORE-LEVEL STRATEGISTS
BDS Marketing has come a long way since it opened as a field marketing agency in 1984, primarily serving alcohol and tobacco clients. Net revenues rose 40 percent to $7.4 million in 1999, up from $5.3 million in `98.
BDS’s main revenue stream now comes from consumer-electronics clients. The agency’s expertise in promotions, merchandising, in-store training, demonstrations, and assisted-selling services (not to mention data collection) has produced such strong results that many clients – including Canon and Thomson Consumer Electronics – won’t go anywhere else. “This is an agency that is willing to take on any task we have for them,” says Matt Bailey, vp-marketing at Stamford, CT-based Xerox Corp.
Last year, BDS developed an account-specific campaign for Canon at Best Buy stores around the country, putting many of its 900 field staffers on a project that centered on offering shoppers free software and magazine subscriptions with purchase. The effort boosted printer sales 53 percent and ink and paper sales 25 percent.
BDS (No. 25) doesn’t outsource, keeping accountability for everything its does “right here,” says chairman and ceo Beverly Ham.
While the agency’s growth is coming mostly from the tech side, it continues to handle – and pitch – its integrated marketing services to non-electronics clients as well. BDS holds agency-of-record status with Giant Food Stores (a recent win), Brown-Forman Beverages, Ralph’s, and Kimberly-Clark. Services include event sponsorships, cross-selling, loyalty programs, venue procurement and negotiations, experiential marketing, and continuity programs. “Clients look at us as a smorgasbord,” says Ham.
BEST FOOT FORWARD
Buoyed by new clients including Microsoft Corp. and Mercedes Benz, New Berlin, WI-based event specialist GMR Marketing boosted billings to $67.8 million and net revenues to $25.7 million in 1999, up from $50.3 million and $18.2 million, respectively, in `98. New clients accounted for 78 percent of the growth.
“Integration, now more than ever, is what clients are looking for,” says president Jay Lenstrom. “Marketers want an agency that can check its egos at the door and deliver the absolute best work.” While event marketing is GMR’s crown jewel, the agency also handles sports, entertainment, and ethnic marketing.
For Microsoft, Omnicom-owned GMR (No. 13) inserted computer chips into the shoes of runners participating in the New York City Marathon, then tracked their progress on a Web site packed with digital images and real-time results. Traffic on the Microsoft Network rose by 40,000 unique page views daily during the event, and a special Web site received three million page views over a 72-hour period. The campaign earned a Silver Reggie in the interactive category.
Other notable ’99 efforts included the Miller Genuine Draft Blind Date project, which was designed to enhance the brand’s category presence with music. High-profile groups including The Cure and Red Hot Chili Peppers were recruited to perform private concerts for a limited number of winners. The talent was kept secret until the curtain went up.
NASCAR sponsorships have also been a particularly strong growth area: GMR’s work on the racing circuit now covers 16 clients.
IN HIGH GEAR
Life runs in the fast lane these days at sport and event marketing shop Group III Promotions, Chicago. Work won in 1998 hit the bottom line in 1999, boosting net revenues 50 percent to $6.5 million on billings that were up 80 percent to $19.3 million.
“We’re starting to be looked at differently,” says principal Vince Parrinello. “We’ve been a line item in the promotion budget for too many years. We want to be the top line item that marries the promotion elements.”
Highlights from ’99 include the agency’s first work for Bank of America, Canon, Parke-Davis, Mattel, International (formerly International Harvester), and Seagrams America. Bank of America tapped its U.S. Olympic Teams sponsorship for a Down Under Tour 2000, bringing a taste of Sydney to 48 cities through a mobile mini-village. Group III began work on the year-long tour 16 months before the trucks rolled.
Long-time client R.J. Reynolds uses Group III (No. 27) for all its motorsports programs. The agency handles on-site sampling and conversion at events, manning a hospitality tent and working the crowd to send smokers inside. “They have a good understanding of the restrictive tobacco environmentand the motorsports environment, and they do a great job marrying those,” says RJR’s Steve Tucker.
Group III’s forte is execution. It added 10 field offices with 150 full-time staffers in first-quarter 2000. While the shop has added strategic capabilities with staffers like senior vp Scott Kirkpatrick, it doesn’t overextend, turning down pieces of RJR assignments it can’t handle. That’s a mite more honest than some agencies would be.
AND HOWE
Net revenues at Howe Marketing Group jumped from $11 million in fiscal 1999 (ended March 31) to $17 million in fiscal 2000, with 70 percent of the growth attributed to additional business from existing clients.
The Pasadena, CA-based shop has carved out a niche for itself with a Combined Rebate program that allows retailers to fulfill all rebates through one source – thereby making the process easier for often-skittish consumers. Clients include Kmart, Eckerd, ShopKo, and Long’s Drugs Stores. “We’ve upgraded our marketing capabilities,” says ceo Michael Arthur. “We’re increasing the response to our efforts and building customer loyalty to the brands we represent.”
While rebates are its bread and butter, Howe offers the gamut of promotional services. Creative development accounts for about one-third of revenues, although the agency works exclusively on a project basis.
Warehouse chain Sam’s Club had been participating in the Combined Rebate program for almost a year, but was looking to take a different approach in `99. Last August, Howe increased the categories represented, beefed up the dollar value of offers, and hired greeters to distribute catalogs in-store. Customer response rose 52 percent, while sales grew 66 percent. Four out of five customers reported making “unplanned” purchases.
While Howe (No. 10) is blossoming through traditional channels, it is quickly embracing the Internet as well. “All our clients are asking for Web sites, regardless of whether they’re generating much volume online or not,” says Arthur. The agency recently developed a new division dedicated to servicing online retailers.
FROM RADIO TO RETAIL
Keith Kriegler knows retail. Just ask Maytag Appliances or UPS. Both companies – not your usual suspects for promotion – have relied on Kriegler’s Chicago agency, KK&A, for consumer and trade campaigns.
The eight-year-old shop nearly quadrupled revenues last year to $2.5 million on the strength of expanded Maytag work and new business from UPS. The shop jumped to No. 56 this year, up from No. 85 in 1998. (Staff transitions kept KK&A from filing in 1999.)
KK&A’s highest-profile work last year was the Oreo Stacking Contest for Nabisco Biscuit, which boosted Oreo sales nearly 40 percent over five-year levels.
Eighty percent of the shop’s work is retail merchandising. Maytag tapped KK&A to streamline execution for its trade customers. The shop developed SPIN (Success, Progress, Innovation, Now) packs with all the promo materials, dealer offers, and staff incentives retailers need for that trimester, including tie-ins with partners like Procter & Gamble, Ford, and Ben & Jerry’s. Key accounts get customized promotions. Execution is up 75 percent, KK&A reports.
“They’re very creative, with a good sense of retail and packaged goods,” says Maytag marketing chief John Witt. “They’re flexible and quick.”
“They have great follow-through,” says UPS marketing manager Diana Stopford. “They’re concerned with our volume because they’ve got a stake in the business, too.”
Kriegler got his start handling promos for radio stations. His biggest accomplishment: Helping to make a Light Up Atlanta concert and fireworks show so popular that the city had to shut it down when crowd control got overwhelming.
DRIVE TIME
Flashback 1995: With $5.7 million in net revenue (and two-year growth of 68 percent), Wilton, CT-based Market Growth Resources ranks 22nd on the promo 100 after seven years in business.
Flashback 1999: Now a subsidiary of advertising conglomerate True North Communications, MGR’s $18.3 million in revenue (and 45 percent growth) places it 33rd on the list.
The present: True North has finally aligned its disparate promotion businesses (formerly tied loosely within a Promotion Services Group headed by MGR executive Wes Bray) into a formal operating division, turning MGR, its Wilton offices, and four of the agency’s top executives into the centerpiece of Marketing Drive Worldwide.
The result: Marketing Drive ranks 14th this year, with $43.8 million in net revenue and $121 million in billings. The name encompasses once-independent shops and services Wells Marketing, Barr Benedette Group, Properties Group, and Peterson Group. The umbrella gets bigger this year, when Chicago-based FCB Impact merges into Marketing Drive Chicago.
“This is client-driven. We want one company that provides clients with a world of experience,” says Mickey Jardon, former MGR-er and now president of the Promotion Group Americas division. First announced last summer, the united approach boasts operations in nine other countries and “is slowly starting to work,” Jardon says. “Canada and Puerto Rico are sitting in on U.S. meetings.”
Clients inquiring after the old MGR need look no further than the Wilton office (right next to HQ), where Marketing Drive USA ceo Chris Maher and chief creative officer Don Growhoski leverage the network’s resources while maintaining the small-shop culture of the old business.
BUY RATING
If imitation is the sincerest form of flattery, acquisition can’t be far behind. M3 Marketing Group, Birmingham, MI, was acquired by Aspen Marketing Group shortly before this issue went to press.
M3’s new parent was impressed by the agency’s 1999 performance. Net revenues more than doubled to $15.1 million, up from $6.4 million in 1998. Forty-four percent of the growth came through new clients, with additional business from existing clients accounting for the rest. An impressive client list includes Nabisco, Blockbuster Entertainment, BarnesandNoble.com, Ford Motor Co., and Hewlett-Packard.
A specialist in event and tour marketing programs that used to be called Mallworks, M3’s top campaigns last year included efforts for ESPN and the American Film Institute. ESPN’s Top Athletes of the Century special was promoted through mall displays featuring animatronic recreations of famous athletes.
For the American Film Institute’s CBS television special, 100 Years…100 Movies, M3 developed a mall tour that hit 20 major cities to display memorabilia from great films. Consumers could pose for “digital postcards” that dropped them into scenes from Jurassic Park and King Kong, then were guided to Web sites to win prizes. The tour was voted the Video Software Dealers Association’s 1999 Promotion of the Year.
The biggest change for M3 (No. 20) – aside from its impending sale – has been accountability. “Clients want us to provide a sense of measurement, so we’re moving to [Chicago-based event sponsorship research firm] IEG standards” among other things, says ceo Yvon Russell. “We’re also getting a lot more calls that relate to technology.”
ANCHORS AWAY
How big a year was 1999 for Westport, CT-based Ryan Partnership? That depends on your definition of big.
Investments made in 1998 began to pay off: New ethnic marketing unit PanaVista started attracting clients. A new Toronto office primed the shop to handle business on a North American basis. Increased direct, regional marketing, Internet, and co-marketing competencies also brought returns.
Net revenues jumped 26 percent to $41 million last year without the presence of an anchor client – and that’s just fine with president Thomas Libonate. Ryan lost the Pepsi and Pizza Hut accounts in 1996 and rebounded with a plan to bring in a more diverse client pool. These days, no client represents more than about 15 percent of gross profits.
Clients are quick to define Ryan (No. 28) as “smart” and “involved.” “We don’t pride ourselves on the business of the month,” says Libonate. “Our focus is on building relationships, much like the strategy we recommend to our clients.”
With eight offices and 300 employees, Ryan frequently runs topical share sessions at which brand marketers congregate, learn, and share. “This is an agency that takes the true spirit of partnership to heart,” says Kennon Jaeger, director of consumer marketing at Pillsbury Co.
That spirit was evident last year when client Heineken tied into 1999’s Austin Powers: The Spy Who Shagged Me. P-O-P, events in 10 markets, and other components helped bump beer sales 15 percent above plan.
So was it a big year for Ryan? Yeah, baby, yeah!
STRAIGHT FROM THE SOURCE
Source Marketing had all its bases covered last year. The Westport, CT-based shop picked up sizeable accounts from the likes of WingspanBank.com and Sony. It developed edgy promotions for Rosie O’Donnell’s Chub Club (generating 340,000 member sign-ups in three weeks) and Nivea (besting sales-volume projections by 32 percent). And in its spare time, it launched an interactive sister arm called eSource.
Net revenues at Source (No. 64) jumped 49 percent to $6.1 million in ’99 as the agency used its regional co-marketing and field marketing expertise to win new accounts and keep servicing long-time clients. “They’ve handled both large and small promotions for us, and every time they’ve delivered,” says HBO director-business development and marketing Mary Baumgartner.
Selling an 80-percent stake in the business to Toronto-based marketing communications network Maxxcom, Inc. in 1998 gave Source the cash to invest in eSource and other strategic areas. The agency is beefing up its client roster with new technology accounts.
“We don’t want to be big,” says president Howard Steinberg, a former Pepsi marketer who started the agency in 1989. “But we want to be a player.”
The backbone of the shop’s success has been a mission to create brand relevance, then to drive that relevance down to local levels and reach consumers at the closest point of contact, Steinberg says.
Many of Source’s 30 employees have brand backgrounds. The creative, formidable, street-smart – these are client’s words, not promo’s – agency’s new eSource division is already performing well, impressing brands with innovative drive-to-Web marketing strategies.
MIX IT UP
New York City-based Vertical Mix Marketing is seeing its ship come in five years after its launch. The agency (No. 79), which recently changed its name from Promotion Development Group to better represent itself as a full-service marketing agency (May promo), has grown to a four-division network of 30 staffers led by ceo (and outgoing Promotion Marketing Association chairman) John Zamoiski.
Work in 1999 for cable TV channel A&E put the shop in the spotlight. The agency won three Gold Reggie awards, two of which came through a partnership-heavy campaign for the Horatio Hornblower mini-series that sparked A&E’s largest viewership numbers ever. The cream of the partner crop was an alliance with the Nautical Heritage Society, which brought in vintage ships to stage mock sea battles in major ports.
Vertical Mix helped A&E score another hit – and won another Gold Reggie – with an effort that targeted eighth-grade students for the network’s The Crossing historical drama. “We’re most proud of our ability to reflect the personality of the brand properly and effectively,” says Zamioski. “Anybody can look for just a product tie-in.”
Net revenue rose from $1.9 million to $2.5 million last year, and billings grew from $4.1 million to $4.5 million.
The agency reorganized this spring and is now comprised of four strategic divisions: Promotions Development Group for strategic planning, fulfillment, and administration; an Alliance Group to identify and negotiate partnerships (a la the A&E work); Soho Merchandising for premium, incentive, and merchandising projects; and Alpha Interactive to develop Internet-based campaigns.
