Agency mojo rising amid digital shift

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Carol Krol, editor in chief, Direct Marketing News
Carol Krol, editor in chief, Direct Marketing News

Direct marketing agencies got their mojo back this year as revenues improved and clients began spending across marketing disciplines again. Where the watch words last year were "belt-tightening" and "shrinking budgets," this year recovery and steady growth are what top executives are talking about.

This month's 84-page issue features the Agency Business Report, showcasing three dozen in-depth profiles of leading direct, digital and marketing services agencies. Although in its third year, we significantly expanded this special report in 2011 to allow for more comprehensive analysis and coverage of this important sector of our industry.

The report also includes our inaugural Direct Marketing Standings, a financial ranking of those agencies who supplied their year-by-year comparisons of revenues and staffing levels. While this list admittedly does not showcase the industry in its entirety, it is a solid starting point, and we hope additional agencies and marketing services firms will participate next year as we look to further grow the Standings.

A look at those firms participating shows that revenues improved 10% over 2009 figures. Headcount grew at the rate of 5%, proof of a nationwide trend of slower corporate hiring. Looking at the top 10 firms in the Standings, 2010 revenues increased 8% over the prior year, while headcount increased by 3%. Acxiom remains the largest firm in terms of US revenue related to marketing services. It is closely followed by its data-fueled brethren Harte-Hanks and Epsilon, proving the importance and dominance of data in direct marketing. If they reported revenues, creative-based shops Wunderman, Draftfcb and Rapp would be on equal standing.

While agency executives we spoke with were optimistic about the revenue picture, some remain cautious. Bob Horvath, global CEO of Omnicom's Rapp, told Direct Marketing News that though Rapp saw double-digit growth last year, many marketers remain conservative in terms of spending. 

Agencies continue to transition more towards digital channels and away from direct mail, print and TV. As Chris Kuenne, founder and CEO of Rosetta told Direct Marketing News, "Everybody is headed to the middle."

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