Hefty Rise in Account Activity | Adweek Hefty Rise in Account Activity | Adweek
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Hefty Rise in Account Activity

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First Six Months of 1999 See Agency Shifts Up 27 Percent
NEW YORK--Fueled by the continuing growth of e-commerce and global advertising consolidations, accounts worth nearly $6 billion in billings have been awarded during the first six months of 1999. That represents a hefty 27 percent jump over the same period in 1998, according to an analysis of figures compiled by Adweek.
The $5.7 billion in account movement between Jan. 1 and June 30 compares with $4.5 billion in the previous year. If the torrid pace of change continues, the amount of business activity in 1999 could nearly double last year's full-year total of $8.2 billion. That figure was up 6.5 percent from $7.7 billion in 1997.
Consolidations of big accounts--including Microsoft, Bank of America, Sprint, DuPont and ConAgra--were a key factor. And the number of $100 million-plus accounts that changed hands through June stood at 16, double the eight recorded in the year-ago period [see chart].
With the dominance of media-only accounts among the top 20 movers, traditional ad agencies have not necessarily seen their own coffers swell. Benefiting instead were media agencies such as Zenith Media, Leo Burnett's Starcom and TN Media. And despite the level of billings in play, agencies are not necessarily seeing huge revenue gains, given that some media accounts are taken on for relatively low commission rates.
All the figures reflect accounts worth more than $10 million in billings. Reviews still in progress were not included.
At a time when e-commerce start-ups and packaged-goods conglomerates are rushing to establish their brands online, it is no surprise that high-tech assignments accounted for nearly half of the activity to date at $2.8 billion. The category includes computer hardware and software retailers, Internet start-ups and established companies that have set up new Web sites for their brands. Business from relative newcomers such as E*Trade, eBay, as well as Pets.com and household names such as Barnes & Noble, are some examples.
"All these new companies are trying to establish themselves in the minds of consumers and investors," said Arthur Selkowitz, chairman and CEO of D'Arcy Masius Benton & Bowles, "and you're seeing the importance of advertising as the most powerful weapon to do this." He likened the burgeoning tech world to the industrial revolution in the mid-19th century.
Tina Georgeou, president of DeWitt Media here, noted the irony in the way "dot.coms" build brands by using traditional media to increase awareness. "Network TV is still the fastest way with sight, sound and motion to build a brand," she said.
Where tech clients were once desperate for shops that emphasized technological know-how, "today, they want large agencies with proven consumer market-ing credentials and access to technological expertise," said Don Dillon, president of McCann-Erickson North America.
McCann is the biggest winner so far this year, with $150 million in new work from Microsoft, not to mention Lowes Cos., Sprint media, and Hewlett-Packard.
Ron Bess, president of Foote, Cone & Belding Worldwide, said clients are consolidating their business at single global agencies because "it gives [clients] a larger level of brand control around the world. They can be more confident their fundamental brand equities are managed and controlled."
Jim Harrington general manager of Bozell Worldwide in Costa Mesa, Calif., said it doesn't seem like there is increased activity. "To me, it doesn't feel like there are any more [accounts moving] than 10 years ago If there are, perhaps it's because there seems to be tremendous changes on the management of client companies. With that, comes the inevitable change in agency." --with staff reports

Top 15 Largest Account Changes
Account .......................................... Billings (millions)
Microsoft (consolidation) ......... 230
Sprint (TV buying) ....................... 200
Sprint (other media) .................. 200
UDV (consolidation) ................... 150
Canon (media) ................................ 125
HSBC Holdings (media) .............. 125
HSBC Holdings (creative) ......... 125
Mercedes-Benz (creative) ........ 125
ConAgra (media) ........................... 100
Dreamworks SKG (media) ......... 100
Hewlett-Packard (consolidation) 100
Elizabeth Arden .............................. 100
DuPont (consolidation) ............... 100
Lowe's Home Centers ................. 100
Bank of America (media) ......... 80-100