In a hot category being transformed by technology and new analytical tools, Rapp Collins Worldwide last year proved that being one of the biggest direct marketing companies doesn't mean you can't be one of the most successful.
In 2000, the direct response and database management company posted a fourfold increase in new-business revenue in North America. The wins included SBC Communications, UPS, Bristol-Myers Squibb, Radio Shack, Juniper Bank and Network Associates. While final numbers have not been disclosed, the Omnicom Diversified Agency Services unit estimates 2000 worldwide revenue will increase 30 percent over the $312 million rung up in 1999. Billings are also expected to increase 30 percent over 1999's $2.1 billion.
The achievements reflect many of the changes implemented by CEO Malcolm Speed, who joined from the former Bronner Slosberg Humphrey almost two years ago. In recognition of that success, Rapp Collins earns Adweek's President's Award, which recognizes outstanding business performance by an agency or company not defined as a full-service traditional ad shop, such as a holding company, marketing services firm or public relations concern.
"[Speed has] redirected the focus of Rapp Collins from a one-off project strategy to a strategic consultancy for clients involving more of a long-term relationship with them," says Tom Harrison, chairman and CEO of DAS.
Trailing OgilvyOne in worldwide revenue, Rapp Collins—with 60 offices in 30 countries—is the industry's second-largest player. Last year, the aptly named Speed moved quickly to bolster its management ranks and strengthen skill sets in areas like customer database, analytics, media, digital resources, brand strategy and creative.
"We've made great progress in our expert services as well as in improving our executional processes," says Speed, 48. "We've also made sure we are well invested in senior-level training as well as in knowledge management."
The growth underscores the rising stature of direct marketing. Industry practitioners are increasingly playing a larger strategic consultancy role in clients' businesses—appealing to their more rational needs. Speaking the same business language allows such direct firms to enjoy deeper, more stable relationships. Rapp Collins, for instance, has proved to be a potent new-business weapon: In 1999, its relationship with Mercedes-Benz helped Omnicom's Merkley Newman Harty—a shop with no prior automotive experience—win the client's ad account.
No longer the ugly ducklings on Madison Avenue, shops like Rapp Collins are also attracting key traditional-agency talent: New-business chief Mike Duda left Deutsch for Rapp Collins' direct world.
For Speed and president/CEO Ed Mc Nally, getting the right executives in place has naturally been a priority. Lesley Mair, managing director of WWAV Rapp Collins, the U.K.'s largest direct marketing firm, is being brought in to replace New York president/CEO David Scholes. (Scholes will run his own ship as CEO of Omnicom direct marketing company Targetbase.) In December, Speed also brought in Ben Nneji of GE Capital as svp, customer management services; Greg Banks of Sprint as svp, marketing director in Dallas; and Tom Benelli of Young & Rubicam's Impiric as president, SCP/Rapp Collins Media.
Rapp Collins' Chicago outpost made senior-level hires as well, a testament to its doubling in size in 2000. But Dallas is now the agency's largest and fastest-growing office, with billings soaring 66 percent last year. For all that success, though, staff turnover has been high.
Rapp Collins is also testing new areas. In late 1999, Speed unveiled RappDigital after acquiring a 50 percent stake in interactive specialist Critical Mass. He poached J.G. Sandom, former director of OgilvyInteractive, who is credited with its early turnaround and expansion, to be Rapp Digital's president. Last year RappDigital acquired Innovyx, an e-mail application provider working for clients like Microsoft, which will operate as an autonomous unit. The company also created a joint venture with HispanAmerica Response Marketing, a consulting and targeting services firm.
"Last year was rewarding not only because we had opportunities to work with new clients and develop clients' businesses and our own," says Speed, "but it was also enhanced by building out and enhancing our capabilities over disciplines, with things like online and offline optimization and the creation of initiatives like HispanAmerica."