B2B agencies are continuing to report strong growth, despite the recession, according to the B2B Marketing annual Agency Survey. Average year-on-year growth in gross income remained constant at 21 per cent for the top 40 agencies, suggesting that agencies are successfully riding out the downturn and adapting their business models to align with new opportunities.
However, this headline figure does not tell the whole story, and a combination of excellent performances by a handful of top performers, plus the disappearance from this list of those agencies which did not fare well, has distorted the overall picture.
With the wider UK economy still in the doldrums, agencies can expect the environment to remain challenging well into next year – if not longer. The survey illustrates this clearly, with 44 per cent of respondents describing the current state of the market as ‘challenging’, whilst only 38 per cent describe it as ‘buoyant’. This contrasts markedly with 2008, when agencies remained evenly split between ‘challenging’, ‘bouyant’ and ‘static’.
Tough at the top
The league table (see opposite) suggests that, despite the recession, a number of agencies are flourishing. However, the figures do not tell the whole story. Yet again, GyroHSR (formerly Gyro International) has put in a set of extremely strong figures, and once more reinforced its dominance of this sector. Its gross income figure of £63.7 million includes both the former UK-based Gyro agency, as well as US-based HSR, which it merged with in April of this year.
The top of this year’s league table is also interesting as it highlights the emergence of Gravity, which appears to the first serious rival to Gyro as a global B2B agency brand. Gravity has been formed by three B2B specialist agencies from around the world, including UK-based AGA, and it will be interesting to note whether other agencies attempt to follow this model to gain a global footprint in the coming years. Other new names at the top of this year’s survey are MRM London and Metia, making this year’s league table the most inclusive ever.
Other agency winners
Further down the table, there are a number of other spectacular performances, which are best illustrated by the Fig 2. Integrated Results, has put in the most stratospheric performance, demonstrating growth of almost 500 per cent. However, as well as reflecting an excellent core performance, these figures also incorporate the integration of a sister company, which was previously reported separately. Volume is another agency whose strong growth is, in part, a reflection of its policy of expansion through acquisition.
Perhaps the single most impressive performance from an agency was Omobono, which almost doubled its gross income. The Cambridge-based agency remains at the bottom end of the top 40, but has clearly created a formula and mix of services which tap in to clients needs in a difficult period.
Similarly, Surrey-based DNX has also had an extremely successful year, although because of an influx of new names at the top of this year’s league tables, this improved performance has made little impact on its overall positioning.
Mason Zimbler is third on the list of top performing agencies, helped perhaps in part by its acquisition by Harte Hanks, and consequently its access to the US marketing group’s impressive client base.
All the agencies in the list of top 10 fastest growers deserve congratulations for an excellent performance in an extremely challenging environment. Achieving this kind of success amidst a background of media-fuelled economic meltdown is a massive achievement.
Agencies go digital
The growing importance of digital channels and the web generally was clearly illustrated by the findings of the B2B Marketing Agency Survey. In terms of services offered by agencies, the one which was by far the most in demand was ‘web design/digital marketing’, cited by almost 50 per cent of agencies as being amongst their top three services. This was followed by ’email marketing’ and ‘branding’, both of which were cited by 22 per cent.
As regards to predictions for next year, the picture looks broadly similar, with ‘web/digital’ expected to be the number one service and ‘branding’ and ’email’ in joint second place. Unsurprisingly, one service which is expected to make a significant leap forward in the next financial year is ‘social media’, cited by 20 per cent of agencies.
The transformation of B2B marketing into a digital discipline is certain to be impacting on agencies’ financial figures, with different services requiring different structures and different skill-sets. As agencies adapt their models and personnel to reflect these requirements, this will certainly impact on their gross profitability. The challenge for B2B agencies is whether they can successfully adapt and use their new skills to develop and grow once the recession ends.
The technology industry was once again the most profitable sector for B2B agencies, with 66 per cent of respondents putting it in their top three. Business services came second with approximately a third of respondents, whilst surprisingly given its role at the centre of the recession, financial services still came joint third (together with telecoms) with 30 per cent of responses. The public sector was the next most popular area, reflecting the rise in investment in this sector, cited by one in four respondents.
Budgetary concerns
The survey also revealed the extent to which the recession is impacting on the business of running a B2B agency. ‘Pressure on client budgets’ remained the number one concern for this year’s survey, although its share of the vote had risen dramatically from just under half the respondents to two thirds. Meanwhile, concerns about staffing have all but evaporated – they were the chief concern of almost one in five agencies in 2008, whilst this year only a single respondent cited this as an issue. By contrast, concern over ‘badly organised or time-wasting pitches’ has doubled to 14 per cent.
All in all, the B2B agency sector is clearly still under pressure, but has demonstrated itself to be robust, pragmatic and flexible in the face of significant odds.
B2B Marketing’s Agency Survey will be rerun in October 2010. If you are interested in participating, email editor Joel Harrison at [email protected] in August.
2009 B2B MARKETING COMMUNICATIONS AGENCY LEAGUE TABLE
Agency
Most recent gross income figures (£M)
Previous gross income figures (£M)
Per cent change
B2B gross income
Ranking based on B2B income
Overall rank last year
63.70
50.00
27
44.59
1
1
2. Gravity Global
30.30
n/a
n/a
24.24
2
n/a
3. MRM Worldwide
16.22
17.02
-5
11.03
4
n/a
16.20
14.10
15
15.39
3
2
5. Amaze
11.00
9.52
16
6.05
8
4
10.70
10.00
7
7.49
6
3
7. Metia
9.88
9.51
4
9.88
5
n/a
6.78
6.04
1
4.07
11
8
9.Volume
6.30
5.20
21
6.30
7
9
10. Integrated Results
4.60
0.80
475
4.60
9
37
11. Second2
4.40
4.30
2
4.40
10
10
12. Avvio
4.20
3.80
11
2.10
25
n/a
3.95
4.15
-5
3.16
17
n/a
14. Mason Zimbler
3.70
2.70
37
3.15
18
19
3.65
3.40
7
3.65
13
n/a
3.43
3.38
1
3.09
19
n/a
17. BDB
3.30
3.18
4
3.30
14
16
3.25
4.05
-20
3.09
19
11
3.20
2.60
23
2.91
21
20
20. Ledger Bennett
3.20
3.50
-9
3.20
15
14
3.17
2.90
9
3.17
16
18
22. Creative Direction Consultants
2.80
2.60
8
1.40
36
n/a
23. Connection 2
2.70
2.27
19
2.70
22
17
2.58
2.35
10
2.45
24
23
25. Marketing Options
2.50
2.00
25
2.50
23
n/a
2.30
1.50
53
1.61
33
28
2.20
2.60
-15
1.98
28
20
28. Technical Associates
2.05
1.60
28
2.01
26
n/a
29. Birddog
2.00
2.40
-17
2.00
27
22
31. Omobono
1.90
0.99
92
1.90
29
34
31.The Think Tank
1.90
2.20
-14
1.81
30
24
32. McDonald Butler
1.65
1.37
20
1.95
31
n/a
1.64
1.30
26
1.64
32
31
1.60
1.90
-16
1.20
32
n/a
36. Great Guns Marketing
1.60
1.60
0
1.60
34
n/a
36. Jellybean Creative
1.60
1.30
23
1.60
34
n/a
37. Marten Gibbon Associates
1.40
1.40
0
1.13
40
n/a
38. The Works Marketing Company
1.35
1.30
4
1.22
38
n/a
39. CIB
1.29
1.43
-9
1.26
37
29
40. Mabox
1.23
1.24
1
0.74
42
33
41. Hurricane
0.86
n/a
n/a
0.73
43
n/a
42. Marketecture
0.82
0.73
12
0.82
41
38
43. Brand Remedy
0.66
0.91
-27
0.59
45
36
44. MRA Marketing
0.65
0.78
-17
0.62
44
n/a
45. Purechannels
0.5
0.25
100
0.5
46
n/a
46. Cameron Wells Communications
0.41
0.4
2
0.41
47
n/a
47. Clear Communications
0.36
0.39
-8
0.36
48
n/a
48. Cyance
0.36
0.13
117
0.32
49
n/a
49. Adstorm
0.32
n/a
n/a
0.27
50
n/a
