The Year in Review

The last year of the century may be remembered as a milestone in New England marketing and in the agency business worldwide. companies redefined consumer shopping and communication, while providing Web-savvy shops with a new pool of potential clients. At the same time, agencies strove to stay competitive in the fast-changing marketplace. The region’s largest players–Arnold Communications, Bronnercom, Mullen and Hill, Holliday, Connors, Cosmopulos–all made significant changes in order to position themselves for future growth. Consolidation at the midsize level continues apace. And Deutsch’s arrival also figured into the region’s top 10 ad stories of the year.
–David Gianatasio
1New England agencies added more than $250 million dollars in new business from clients this year. Every week, Internet firms anxious to establish themselves in the e-commerce marketplace launched agency reviews. Mullen was the region’s most notable beneficiary, reaping more than $100 million in assignments. clients may represent an astonishing 25 percent of the Wenham, Mass., agency’s total billings.
Although shops are banking that ad budgets will keep rising, they can’t deny the risks. Internet startups often run into venture funding problems and lack leaders with marketing know-how. Creative departments are given less time to turn around campaigns, and the airwaves have become muddled with messages from Internet concerns that are indistinguishable from one another. We’re at the start of the roller coaster. No one can predict where, how or when it will end. But for now, plenty of agencies are enjoying the ride.
2Lots of folks snickered when Arnold chairman Ed Eskandarian bought the remains of Houston Herstek Favat in 1997. But it was a core group of former Houston executives that led Arnold to victory in its pitch for the American Legacy Foundation’s national anti-tobacco campaign. Hundreds of millions of dollars will pour into the foundation; much of that will be used to counteract years of tobacco industry marketing. The American Legacy triumph, combined with the Royal Caribbean win and a slew of creative prizes for Volkswagen, made 1999 another watershed year for Arnold. Except for one sniggling detail: Arnold parent Snyder Communications, Bethesda, Md. Shares in the publicly traded company plunged in September after Snyder chairman Daniel Snyder revised earnings forecasts and outlined a plan to restructure the corporation into three separately traded and better-understood companies that would focus on creative services, healthcare and interactive marketing. One result of the restructuring is that Snyder can now entertain selling all or part of his holdings. Dan Snyder has said that at $44, the price per share when Arnold was bought, was overvalued and its current price, around $12 or $13 a share, is undervalued. Any takers?
3 Executives at the Boston-based direct marketing giant spent much of 1999 preparing to build a global network. The cornerstone of the ambitious plan, sources say, is an IPO to be made early next year. The agency changed its name from Bronner Slosberg Humphrey as 1999 began. It promptly went on a new-business tear, which included assignments from, Aquent Partners, Delta Air Lines, Industry to Industry, Sears and the consolidated interactive account of showpiece client AT&T.
Overall billings shot past $1 billion and outposts in New York, San Francisco and London continued to grow. An Asian outpost, likely in Hong Kong, is on tap for 2000.
Several key questions, however, remain unanswered: Can agency hires keep pace with its growth? What effect will public ownership have on a highly entrepreneurial corporate culture? And do president David Kenny and vice chair Kathy Biro have broad enough world-views and managerial savvy to successfully take on global communications giants such as Interpublic Omnicom and WPP?
4″The future isn’t about advertising,” said New England’s pre-eminent ad man as 1995 drew to a close. “It’s about communications.” So said Hill, Holliday co-founder and chairman Jack Connors. Time has proven the accuracy of his vision.
Connors has watched the value of his shares in parent Interpublic Group of Cos. increase, while rebuilding his senior management team. The goal is to reclaim the shop’s creative legacy.
That’s the job of newly installed creative director John Doig, who along with director of client services June Blockin, evp Laurel Rossi, and director of planning Justin Holloway form a new front line in the battle to win clients. The year was a mixed bag, no doubt reflective of an effort to get newcomers and old timers alike speaking the same language., Broadwing and a slew of companies came aboard.
But there were tough losses, too. AutoNation, CNN, Spalding and NEC Technologies left the roster. Hill, Holliday also failed to advance in various high-profile pitches, including bids for Progressive Insurance, Fidelity online, EMC, Direct Hit, One clear winner: John Connors III, Jack’s son. He was named to helm Zentropy Partners, IPG’s consolidated interactive marketing unit, which includes the team the younger Connors led at his dad’s shop.
5If you can’t beat ’em, join ’em. That maxim, coupled with the desire to add critical mass and become more competitive, appeared to drive this summer’s buyout of venerable Boston agency Ingalls by crosstown rival Holland Mark Martin Edmund. The resulting shop–with billings near the $200 million mark and clients such as TJX Cos. and Citizens Bank–is now New England’s largest traditional ad company. But agency leaders Bill Davis, Chris Colbert and Bink Garrison have kept a low profile, concentrating on integrating the staff of the two shops and eschewing the slew of recent, new-business pitches.
As the millennium closes, however, Holland Mark Edmund Ingalls surfaced in the review for WinStar Communications’ $15 million account and is poised to begin going after accounts in earnest. Managers believe new resources will boost the agency into New England’s top tier.
6In its 29th year, Mullen experienced big changes–from a new owner to a transition in leadership. Still, the shop recorded one of its best growth years and won kudos for its creative work. In April, a year after buying Hill, Holliday, IPG acquired Mullen. Founder Jim Mullen was made vice chairman of The Lowe Group, through which Mullen reports to IPG.
This fall, Mullen officially turned over control of his 350-person agency to president and chief executive officer Joe Grimaldi. Soon after, creative head Paul Silverman formally stepped aside, assuming the role of founding creative officer, and Edward Boches was named chief creative officer. Meanwhile, the agency maintained its 25 percent annual growth rate–similar to its gains over the past several years–and emerged as leader in the category.
CompUSA’s Cozone, Northern Light,, and LendingTree were among Mullen’s wins in 1999. A major branding push for women’s network Oxygen Media will break during the Super Bowl.
7Look for the ad war among regional banks to heat up early next year. Fleet Financial Group’s acquisition of BankBoston has been completed, with Hill, Holliday chosen over Arnold to rebrand the institution. Citizens Bank and USTrust will soon become one as well. Luckily, their agencies merged during 1999, and Holland Mark is charged with positioning the new entity as the No. 2 bank. Just last week, Gearon Hoffman, Boston, picked up ad duties for Sovereign Bank New England and will be looking to introduce the new No. 3 player in the market to consumers.
8Consolidation ran rampant in 1999. New York-based Earle Palmer Brown made two notable purchases: Boston’s Pagano Schenck & Kay and Stamford, Conn., technology marketing shop Sullivan & Mulvaney. Omnicom Group, also New York, bought Carol Cone’s eponymous Boston
public relations shop. Cohn Godley Norwood and Pamet River Partners, both in Boston, respectively sold to Burlington, Mass.-based Epsilon Data Management and TeleTech Holdings of Denver. In most cases, buyers promised to leave the companies untouched and gave local
managers a free hand to build business.
9The New England agency landscape has been dominated by a handful of players for so long that Deutsch’s arrival sent shock waves through the marketplace; Adweek’s phone lines lit up like a Christmas tree. The Boston office of the large independent shop is being helmed by former Arnold executives Kathy Kiely and Kristin Volk, which adds to the intrigue. Will the pair lure big-name clients or staff from their former employer? Will Donny Deutsch’s brash New York style play here? One thing’s for sure: breaking down the old-boy ad network is high on the pair’s agenda.
10Two local public relations titans last year strengthened their global reach through acquisitions and new offices. Brodeur Worldwide dropped owner Porter Novelli from its name to reflect its independence from the New York Omnicom Group shop. The agency formed a global consumer technology practice and forged partnerships with Omnicom-owned GPC International’s eight Canadian offices and independent high-tech shop Koteret Group in Israel. Brodeur also created an interactive group after buying Newton, Mass.-based Park Place, a CD-ROM and Web applications developer.
Weber Public Relations Worldwide, a Cambridge, Mass.-based unit of IPG’s McCann-Erickson WorldGroup, added lobbying firm Barbour Griffith & Rogers to gain clout with lawmakers in Washington, D.C. Weber also opened an office in Taiwan to work with clients.
As the new millennium dawns, it appears the battle for public relations supremacy between Larry Weber and John Brodeur will continue to span continents.