In 1996 there were very few dramatic wins - increases in agency
billings tended to rely more on organic growth. By Belinda Archer.
After the relative, ’business as usual’ calm of 1995, last year proved
rather more exciting for European networks.
Dramatic deals were pulled off, delivering agencies more credible
pan-Euro credentials, rows between supposed agency partners took place
and several new media operations were launched.
There was also some jockeying for position at the top end of the league,
with Euro RSCG being toppled from pole position to fourth. Publicis
snatched the lead, moving up from 1995’s second place, and Young &
Rubicam Europe moved from fourth to second.
A more significant development was the deterioration of the Publicis/FCB
alliance - a tie-up that fell apart earlier this year - leaving FCB
struggling to build its own European network.
The incident that worsened relations notably was the deal between
Publicis and M&C Saatchi, which helped M&C clinch the British Airways
account. FCB read the move as a blatant attempt by Publicis to seek an
alternative global partner, and relations turned sour. Interestingly,
the fall-out did Publicis no harm, with the network actually moving to
the top of the league, while FCB fell from second to 16th.
Then there was the pounds 105 million takeover by GGT of the
French-owned BDDP operation. News of the deal, which was finalised in
April, broke at the end of the year, trebling the size of GGT’s
holdings, elevating it to the top 15 league of worldwide agencies from
last year’s 18th, while giving it a toe-hold on Procter & Gamble’s
coveted roster.
Increases in network billings in 1996 tended to be achieved through
organic growth rather than dramatic ’standing-start’ wins, a trend
already developing over the previous years, when it had been apparent
that big regional accounts were moving less frequently outside their
roster of shops, if at all.
Michael Sennott, the vice-president of McCann-Erickson Europe, says: ’No
real pan-European business was truly up for grabs in 1996. It was not a
year for racing around - European clients are wary of making those
shifts because they are expensive and disruptive. They were more willing
to move slowly, perhaps by brand assignment, or they were pursuing
globalisation programmes, where business moves without a pitch.’
Kate Robertson, the business development director of Bates Europe, soon
to head the UK launch of Scholz and Friends, adds: ’The trend of
roster-only pitches continued, particularly in the more developed fmcg
area, where clients seemed to want to carry on working with trusted
agencies.
Other areas needed to regionalise or globalise their business, to
improve on savings and achieve big-brand status.’
Several pan-Euro operations spent 1996 focusing on developing their
media offerings, for example. BBDO established Optimum Media Direction,
a company jointly owned with DDB Needham Worldwide, which now ranks as
the second-largest media company in Europe with dollars 7.1 billion in
billings. At the same time, Grey’s media subsidiary, MediaCom,
restructured to separate its European business from its US parent with
the launch of MediaCom Europe, while Ogilvy & Mather Europe set up the
Network as a dependent pan-Euro media brand with 25 offices and, at the
end of the year, the Lowe Group launched Western International Media, a
new media brand in conjunction with Western International Media of the
US and Initiative Media.
O&M Europe also declared 1996 as the year it would improve its creative
pan-Euro product. It initiated schemes to bring its creative staff
together more, implementing an electronic creative ideas library across
the region, invested more in creative training and took a more
systematic approach to awards.
Preoccupation with expansion across Central and Eastern Europe continued
for several networks, with most now claiming they have fully fledged
operations covering the entire region. Where networks had already
secured a full presence, efforts were made by them over the year to
develop the performance of those local shops, by pushing for greater
local market share, or to batten down control more effectively by
converting agency affiliations to majority ownership.
Mike Walsh, the chairman of Ogilvy & Mather Europe, says: ’I’m trying to
deliver for my clients a top ten office in every country because with
that kind of size I can offer the right quality and quantity of
resource.’
Given that even less new business was up for grabs, margins were as
tight as ever and, with key markets such as Germany and the UK having a
tough year, agencies pursued other revenue streams. Bates Europe
particularly followed the integration route, seeing increased revenues
being generated from sales promotion, sponsorship and new media, and
Saatchi & Saatchi focused in the second half of the year on developing
its through-the-line communications offering to clients.
Sennott says: ’Geographical expansion provided growth for some, as well
as prudent local acquisitions and local, rather than pan-Europe,
business wins. Others saw growth from more co-ordinated communications
services.’
Key newcomers to the European stage included David Wheldon as president
of BBDO Europe and Stanley Bendelac as chief operating officer for Bates
Europe. Wheldon, the former vice-president and worldwide director of
marketing for Coca-Cola, joined the network in January, although his
position was announced at the end of October, while Bendelac replaced
Michael Geraghty who retired, signalling a significant focus on the
nurturing of creative talent at Bates.
Walsh raises a key point for the future of the European market which is,
arguably, the most competitive, toughest market for international
clients because it is the most mature. ’We are seeing European budgets
trimmed in favour of Asia and Latin America, because there are greater
returns in tiger economies and because they can offer greater commercial
and communication freedom, compared with Europe which is too regulated.
That has to be worrying,’ he says.
Another preoccupation for European networks may be the need to develop a
brand positioning or point of difference from rival networks, most of
which must appear depressingly indistinguishable to the multi-national
client community
One method pursued by BBDO’s Wheldon and O&M’s Walsh, is to focus on
strong local delivery, in the hope that a linkage of market-leading
shops will prove a compelling offering. ’The difference may come from
local strength, and building very strong local agencies that can work
together for the benefit of multinational clients,’ Wheldon says.
Top 20 European agency networks ranked by European billings in 1996
Rank Agency Billings Chg Income Chg
96 95 (dollars m) (%) (dollars m) (%)
1996 1995 1996 1995
1 - Publicis Communication 4,616 4,270 7.4 676 624 7.6
2 4 Young & Rubicam Europe 4,497 4,004 10.9 512 489 4.5
3 3 Ogilvy & Mather Europe 4,163 3,939 5.3 462 438 5.1
4 1 Euro RSCG 4,128 4,010 2.8 620 602 3
5 5 BBDO Europe 3,700 3,500 5.4 n/s n/s -
6 7 McCann-Erickson 3,680 3,137 14.7 517 470 9
7 8 Grey Europe 3,056 2,872 6 n/s n/s -
8 12 DMB&B Europe 2,763 2,300 16.7 n/s n/s -
9 9 Bates Europe 2,728 2,653 2.7 n/s n/s -
10 10 Saatchi & Saatchi
Advertising Worldwide 2,616 2,599 0.6 327 325 0.6
11 13 Ammirati Puris Lintas 2,400 2,200 8.3 241 n/a -
12 14 Lowe and Partners
Europe 1,732 1,560 9.9 233 223 4.2
13 15 Leo Burnett Europe/
Middle East/Africa 1,450 1,300 10.3 210 183 12.8
14 16 BDDP Paris 1,202 1,258 -4.6 190 188 1
15 17 TBWA 1,071 935 8.1 141 132 6.2
16 - FCB Europe 1,051 n/a n/a 131 n/a n/a
17 19 Testa International 745 693 7 93 87 6.4
18 18 The GGT Group n/a* 732 n/a* n/a* 93 N/A
19 20 Bozell Worldwide 586.5 431 36.1 95 70 35.7
20 - FCA!BMZ 530 510 3.7 82 66 19.5
* The 1996 figures for the GGT Group are not supplied because of the
acquisition of the BDDP network.
CLIENTS
(1) PUBLICIS COMMUNICATION
Clients: Allied Domecq, Armani, AT&T, British Airways, Coca-Cola, Ebel,
France Telecom International, Garnier, Guinness, Hewlett-Packard,
Inmarsat, L’Oreal, Nestle, Perrier (Vittel), Pfizer, Qantas, Renault,
Rowenta, Sara Lee (Dim), Shell, Siemens, Tefal, Thomson, Unilever
(Boursin), Whirlpool, Whitehall Laboratories No of countries/offices:
22/108 Staff 96: 5,150
(2) YOUNG & RUBICAM EUROPE
Clients: Andersen Consulting, Campbell’s Soup, Colgate-Palmolive, Danone,
Digital, Dr Pepper, DuPont, Ericsson, Ford, Kraft Jacobs Suchard,
Lufthansa, Novell, PepsiCo Foods International, Philip Morris, Swissair,
United Airlines, United International Pictures, Union Bank of Switzerland,
Xerox No of countries/offices: 25/44 Staff 96: 2,850
(3) OGILVY & MATHER EUROPE
Clients: Amex, British Tourist Authority, Bulgari, Disneyland Paris,
Duracell, Ford, IBM, Kimberly-Clark, Kodak, Kraft Jacobs Suchard, Lotus,
Marks & Spencer, Mattel, Nestle, Osram, PepsiCo, Seagram, Shell,
SmithKline Beecham, Sony, Stimorol, Unilever, World Wildlife Fund No of
countries /offices: 31/87 Staff 96: 2,610
(4) EURO RSCG
Clients: Air France, Airbus, Alcatel, Bristol Myers Squibb, Cadbury
Schweppes, Chanel, Citroen, Credis, Credit Suisse, Danone, Groupe
Schneider, Intel, Intercontinental, Iomega, Kraft Jacobs Suchard, L’Oreal,
Louis Vuitton, MCI, Peugeot, Philips, Pillsbury, Procter & Gamble, Reckitt
& Colman, Sara Lee, United Distillers No of countries/offices: 32/34 Staff
96: 4415
(5) BBDO EUROPE
Clients: Apple Computer, Aral, Bayer, Bodum, BMW, Buena Vista, CPC
International, Danone, Dow Chemical, Dr Oetker, Dunlop, DuPont, Federal
Express, Friesland Dairy Foods, Gillette, Gossard, Henkel, House of
Prince, ICI (Dulux Paints), ICI (Marlow Foods), International Wool
Secretariat, L’Oreal, LG Group, Mars, Mercedes-Benz, Montblanc, Motorola,
Nutrexa, Oral-B, Pepsi-Cola, PepsiCo Foods International, Philips, Pizza
Hut, Sara Lee (Douwe Egberts), Sony, Total Oil, Unilever, Volkswagen/Audi,
Wella, Wm. Wrigley, Jr., Wrangler No of countries/offices: 37/149 Staff
96: 5,293
(6) McCANN-ERICKSON
Clients: ABB, AT&T, Agfa, Air Canada, American Express, Bacardi Martini,
Bayer/Miles, Benckiser, Black & Decker, Boehringer Ingleheim, Boots,
Braun, Buitoni, Canon, Casio, Cathay Pacific, Cereal Partners Worldwide,
Chesebrough, Coca-Cola, Credit Suisse, Durex, Esso, Europcar, Ferrero,
General Motors, Gillette, Goodyear, Grundig, Hoya, Interbrew, Johnson &
Johnson, L’Oreal, Levi Strauss, Lucent Technologies, Mastercard, Nestle,
Parker Pens, RJR Nabisco, RJR Tobacco, Reckitt & Colman, Texas
Instruments, Tiffany & Co, Timex, UPS, US Air, Unilever, Waterman Pens,
William Grant & Sons, Yoplait No of countries offices: 28/53 Staff 96:
3762
(7) GREY EUROPE
Clients: Agfa, AKZO Nobel, BAT Industries, Bang & Olufsen, Barilla, Block
Drug/Stafford Miller, BP Oil, BMW, Canon, CPC Foods, Danone, European
Commission, Global One, Gram, Iberia Madrid, International Olympic
Committee, Johnson & Johnson, Krups, Lee Apparel, Lexmark, Mars, Melitta,
Microsoft, Nokia, Navartis, Paulig, Perstorp, Pfizer, Procter & Gamble,
Remington, Roche, Sara Lee/Douwe Egberts, SAS, Seagram, Skoda, Slim Fast
Foods, SmithKline Beecham, Speedo, 3M, Turkish Airlines, Valio, Warner
Bros No of countries/offices: 33/66 Staff 96: 3,790
(8) DMB&B EUROPE
Clients: Australian Tourist Commission, Bristol Myers Squibb, Burger King,
Coca-Cola, Fiat, Gateway 2000, Hyatt, Mars Confectionery, Mars/Master
Foods, Merloni, Pedigree Petfoods, Philips, Procter & Gamble, Scholl
Footcare & Footwear, TWA,Tyco Toys, Umbro, Western Union No of countries
offices: 27/33 Staff 96: 2,296
(9) BATES EUROPE
Clients: 3M, BAT, Campbell’s (Delacre), CPC, Compaq, Cutty Sark, EDS,
Energizer, Heinz, Jamont, Jumbo, Owens Corning, Pharmacia & Upjohn, P&O,
Roche, Spanish Tourist Board, Spillers, Tarkett, Tchibo, Unicef, Warner
Lambert, Wendys No of countries /offices: 34/84 Staff 96: 2,580
(10) SAATCHI & SAATCHI ADVERTISING WORLDWIDE
Clients: Alcatel, Allied Domecq, Bonduelle, CPC International, Cadbury
Schweppes, Carlsberg, Danone, DuPont, Eastman Kodak, Electrolux (Flymo),
Essilor, Hewlett-Packard, Johnson & Johnson, LVMH (Moet & Chandon),
Procter & Gamble, Ralston Purina, Rhone-Poulenc, Seiko, Tenneco (Monroe),
Toyota, Visa International No of countries/offices: 26/40 Staff 96:
1,855
(11) AMMIRATI PURIS LINTAS
Clients: Bahlsen, Castrol, Chefaro, Coca-Cola, Compaq, European Union,
Heineken, Johnson & Johnson, Nestle, R J Reynolds, Rover, Unilever No of
countries/offices: 19/50 Staff 96: 2,700
(12) LOWE AND PARTNERS EUROPE
Clients: Avis, Baileys, Braun, Citibank, Coca-Cola, Estee Lauder, General
Motors, Henkel, Malibu, Saab, Sara Lee (Douwe Egberts), Smirnoff No of
countries/offices: 23/44 Staff 96: 1,600
(13) LEO BURNETT EUROPE/MIDDLE EAST/AFRICA
Clients: Coca-Cola, Fiat, Grand Metropolitan, Hoover, Kellogg, Kraft
Jacobs Suchard, McDonald’s, Nestle, Philip Morris, Procter & Gamble,
Reebok, Thorn EMI, United Biscuits, United Distillers No of
countries/offices: 21/22 Staff 96: 2,032
(14) BDDP PARIS
Clients: Accor, Aerospatiale, Aprilia, Bristol Myers Squibb, Danone,
Hasbro, Hertz, Jameson, Manpower, McCain, Michelin, Monsanto (Solaris),
Remy Cointreau, Salomon, TAG Heuer No of countries/offices: 16/54 Staff
96: 1,504
(15) TBWA
Clients: Absolut Vodka, Beiersdorf, Bel, Canon, Danone, Dow Brands,
Henkel, Nissan, Novartis, Philip Morris, Samsonite, Seagram (Chivas
Regal), 3M Imation No of countries/offices: 22/34 Staff 96: 929
(16) FCB EUROPE
Clients: Beiersdorf, Citibank, Hero, SC Johnson, Kimberly Clark, SEAT,
Tropicana No of countries/offices: 30/34 Staff 96: 850
(17) TESTA INTERNATIONAL
Clients: Benckiser, Fiat Lancia, Illva Di Saronno, Lavazza, Luxottica,
Martini & Rossi, Merloni Ariston, Quaker Beverages (Gatorade), Sergio
Tacchini, Unichips No of countries/offices: 12/15 Staff 96: 645
(18) THE GGT GROUP
Clients (95): ABB, BPD, Gypsum, Cadbury, Cussons, Jagermeister, Kapsch
Telecom, Krups, Michelin No of countries/offices: 12/15 Staff 96: 645
(19) BOZELL WORLDWIDE
Clients: Bristol-Myers, Chrysler, Champion, Financial Times, Kelly
Services, Samsung, Unisys, Valvoline, Yardley No of countries/offices:
24/27 Staff 96: 423
(20) FCA!BMZ
Clients: AT&T, Canon, Carrefour, Henkel, Hewlett-Packard, Lancaster,
Lesieur, Marriott Hotels, Nabisco, Nestle, Rothmans, Siemens, Spontex,
Sudmilch No of countries/offices: 14/17 Staff 96: 510.
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