Converge: Agency Business Report 2007

Converge, formed in 2006, is made up of eight midsize PR firms, detailed below. The network says its goal is to offer national reach and in-market resources to all of the agencies' clients.

Converge, formed in 2006, is made up of eight midsize PR firms, detailed below. The network says its goal is to offer national reach and in-market resources to all of the agencies' clients.

Margaret Booth, president of M Booth & Associates, says in the first eight months of Converge's existence, there's already been a significant amount of interaction among the agencies - "more than I thought there would be," she says.

Booth thinks the combined arsenal of the agencies makes all of them much more "fleet of foot" and flexible in terms of the services they can provide and locations in which they can work.

"It's not only to share business and to have the resources on the ground in major markets," she explains, "but also it's to share professional development and, at some moments, even talent."

More important, Booth says, the network helps level the playing field for midsize agencies competing against the big agencies on new-business pitches.

"The midsize agencies often go up against the big 10, and clients want to know you have resources that can back you up," Booth says.

Converge's agencies span cities all over the US, and while their sizes and specialties differ, it is not hard to see how they have the potential to complement one another.

Booth's firm and Carmichael Lynch Spong are arguably the highest-profile agencies within Converge and are viewed as truly national players. Booth says her agency's strategy for 2007 will be to focus on big brands and "try to grow our work with those brands and then deepen our knowledge of that particular category at the same time."
Booth expects the agency to continue its trend of positive growth and projects a 15% to 20% increase in business.

"The first quarter [of 2007] will more than meet our expectations," she says. "We have already seen a lot of new-business activity across agency practice groups from some big brand names."

Doug Spong, president of CLS, is in a unique position in Converge, as his firm is already part of Interpublic Group. For some time now, however, CLS has been allowed to operate more independently than an owned agency typically would, and both sides appear to be fine with that arrangement.

CLS, which introduced a new identity and logo last year, ended 2006 on a good note, winning the last six of seven new-business pitches.

Spong is expecting the hiring of Doug Dome to pay some big dividends in 2007. "We wanted another experienced person to help us guide our growth," Spong says. "He's strong in food and beverage and has [already] attracted some beverage business for us. He knows how to attract business and serve clients, and attract and keep good talent."

Areas of focus in 2007 will be to grow its online and social media offerings for clients. Home and gardening continues to represent half of the agency's revenue, but Spong says other areas, such as food and beverage, bio-sciences, and nutritional ingredients products, continue to show significant growth.

Duffey Communications
Principals:
Arlene Large, Sherri Fallin
Offices: One: Atlanta

Staff
Staff of 23, with one key hire: Constance Kusema as operations manager.

Accounts
Wins included American Systems, Park Signature Properties, Mass Communications, and TNT Fireworks. No losses were stated.

Financial performance
Revenue was $4.2 million (though official rankings figures were not supplied to PRWeek).

360 Public Relations
Principal:
Laura Tomasetti, managing director
Offices: One: Boston

Staff
Staff of 20. Key hires included Melissa Brenton, VP of the online business practice group.

Accounts
Key wins included Jarden Home Brands, Walt Disney Internet Group, Cheapflights.com, Oregon Scientific, and Galaxy Nutritional Foods. No losses were stated.

Financial performance
Less than $5 million in annual fees (official rankings figures were not supplied to PRWeek).

Carmichael Lynch Spong
Ownership:
Interpublic Group, under Carmichael Lynch
Principal: Doug Spong
Offices: Five: Minneapolis, New York, Chicago, Denver, and San Francisco, which opened in 2006

Staff
53, an increase of seven from 2005. Key hires included Doug Dome, managing principal and chief creative officer, Chicago; Lisa Kovner, principal and experiential marketing group chair; and Matthias Beckmann, principal, also charged with developing the San Francisco office.

Accounts
Key wins included Chevrolet, Dunkin' Brands, Hasbro, McDonald's, Sears, Sherwin-Williams, and Target. Losses included Formica.

Financial performance
Revenue was stated as being in the under $50 million bracket, and CLS experienced both top-line and bottom-line growth.

The Rogers Group (formerly Rogers & Associates)
Principals:
Ron Rogers, CEO; Lynne Doll, president
Offices: One: Los Angeles

Staff
70 staff in 2006, the same number as 2005. Information about turnover, hires, and departures was not supplied.

Accounts
Information not supplied.

Financial performance
2006 revenue was $10,193,045, down 2% from 2005.

Vollmer Public Relations
Principals:
Helen Vollmer, CEO; Carolyn Mayo, president
Offices: Four: Houston; Dallas; Austin, TX; and New York

Staff
56, up from 44 in 2005. No senior hires or departures.

Accounts
Key wins included Spectra Energy, Earth Biofuels, Texas Children's Hospital, and Educational Testing Service. No losses were stated.

Financial performance
Revenues of $6,990,426, up 21% from 2005.

M Booth & Associates
Principal: Margaret Booth
Offices: One: New York

Staff
57, same as 2005. No senior hires in 2006; Chiara Coletti joined in 2007
as SVP/director of the CSR/not-for-profit practice.

Accounts
Key wins included Aerosoles, Harrah's Atlantic City, Playtex Baby, and Somerset Medical System. No losses were stated.

Financial performance
Global revenue in 2006 was $9,465,874, a 17% increase over 2005.

RBB Public Relations
Principal: Christine Barney
Offices: One: Miami

Staff
25, an increase from 2005. No senior hires or departures.

Accounts
Key wins included the National Parkinson Foundation, Language Line Services, BlueCross BlueShield of Florida, The Miami Herald, and Cuca Fresca. No losses were stated.

Financial performance
Did not disclose revenues, but is in the under $50 million bracket. RBB claims
a 35% increase in US revenue over 2005, and a three-point increase in profit margin to 20%.

Stanton Communications
Principal: Peter Stanton
Offices: Three: Washington, DC; New York; and Baltimore

Staff
40, with no senior hires or departures stated.

Accounts
Wins included Sprint Nextel and Duke Realty Corp. No losses were stated.

Financial performance
Revenue was $7,164,074, up 7% from 2005.

Agency's full questionnaire follows below:

Carmichael Lynch Spong

Name of parent division/company
Interpublic Group (IPG)/Carmichael Lynch

Name of subsidiary companies
None

Has your ownership status changed in the past year? If yes, please explain
No

Name of global CEO and US CEO (or most senior equivalent)
Douglas K. Spong, APR

What is your current headcount? How has your headcount changed since FY 2005?
Across all of our five offices we have 53 people total. Our headcount has increased by seven people since FY 2005.

What was the percentage of staff turnover in 2006?
Our staff turnover percentage was 34 percent in 2006.

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
Doug Dome, managing principal and chief creative officer (Dome HK)
Lisa Kovner, principal, and chair of our experiential marketing group (John Paul Mitchell Systems)
Matthias Beckmann, principal (ZOOM Marketing)

What senior staff have departed the firm? Please state name and previous title
John Tieszan
, principal

Please list any other senior management changes, including restructures and significant, senior-level promotions
Senior-level titles within Carmichael Lynch Spong have been restructured from "partner" to "principal." "Senior principal" has also been added to the structure. And the title "managing principal, chief creative officer" was created for Doug Dome. Julie Batliner was promoted to senior principal from principal and is also chair of the Food and Beverage practice and Nutrition and Wellness group. Jill Schmidt was promoted to senior principal from principal and is chair of the Corporate practice. Jay Lemke was promoted to principal, associate director of media relations, a newly created position. Jay oversees all media relations efforts in the Minneapolis office. Maria Reitan was promoted to principal from senior counselor, and is the chair of our Lifestyle Marketing practice, which includes five sub-specialties: marketing to women, mature adults, youth, multicultural and GLBT.

Have you made any acquisitions in the past year, or merged with another agency?
No

How many wholly owned offices do you have globally? Please list with agency names and cities under the following headings. Add majority-owned offices in parentheses.
North America
o Carmichael Lynch Spong - Minneapolis
o Carmichael Lynch Spong - New York
o Carmichael Lynch Spong - Chicago
o Carmichael Lynch Spong - Denver
o Carmichael Lynch Spong - San Francisco


How many partly owned offices or affiliates do you operate globally? Please list agency names and cities under the following headings.
Carmichael Lynch Spong is a member of Converge, a new national network made up of eight leading strategic communications firms. The eight firms have dominant market positions and notable client portfolios that will offer clients national reach, in-market resources and highly specialized public relations expertise on-demand. The network brings together market expertise and a shared business philosophy of some of the country's most respected mid-size agencies. The new network includes: 360 Public Relations/Boston, Carmichael Lynch Spong/Minneapolis, Duffey Communications/Atlanta, M Booth & Associates/New York, rbb Public Relations/Miami, The Rogers Group/ Los Angeles, Stanton Communications/Washington, D.C., and Vollmer/Texas. Carmichael Lynch Spong also represents the needs of its clients in several international markets, including Europe, Asia Pacific (China, Japan, Korea) and Latin America. Through its ownership by Interpublic Group (IPG), Carmichael Lynch Spong may tap a sister firm. In other instances, the firm uses independent PR firms in specific countries. For client Rosetta Stone, the world's leading language software manufacturer and marketer, Carmichael Lynch Spong led an agency search of several European PR firms, which resulted in the selection of Weber Shandwick-Munich. In addition to the selection process, Carmichael Lynch Spong is paid a management fee by Rosetta Stone to integrate the country-specific work with the umbrella position, strategy and campaign planned and implemented in the U.S.

What offices opened in 2006 or early 2007?
We opened our fifth U.S. office in October, 2006 by relocating Leslie Jones from Minneapolis to San Francisco and later adding Matthias Beckmann, principal, for senior leadership. Our San Francisco office is located at:
601 California Street #2100
San Francisco, CA 94108 P: 415-956-9473

What offices closed in 2006 or early 2007?
None

Which regions, US and globally, are growing, and why?
N/A

How many practice areas do you have? Please list.
We have six industry groups and eight specialty groups. Please see below:
Practice Groups
Brand Marketing
Corporate
Public Affairs
Employee Communications
Departments
Media Relations
Creative Resources
Brand Planning
Interactive
Industry Groups
Home and Garden
Food and Beverage
· Nutrition and Wellness
Outdoor and Leisure
Specialty Groups
Lifestyle Marketing
· Marketing to Women
· Multicultural
· Mature Adults
· Youth GLBT Experiential marketing Online

Which ones are new?
N/A

Of those, which ones are part of the core strategy of the agency?
N/A

Which practice areas have been phased out in the past year?
None

What practice areas showed the most growth?
Two key practice areas contributed to our revenue and operating income growth last year. The biggest is our Home and Garden practice, which represents half our total revenue. Carmichael Lynch Spong continues to be the nation's largest PR firm in the home products industry with such brands as American Standard, Clorox, Fortune Brands (MasterBrand Cabinets, including Aristokraft, Diamond and Thomasville brands, and Therma-Tru Entry and Patio Doors), K. Hovnanian Homes, Juno Lighting, Lutron, Sears Craftsman, Sherwin-Williams and Whirlpool Corp. (Maytag and Amana brands). Our retail practice also grew in 2006 with such envied names as Maytag Stores, PETCO, Sears, Select Comfort, Sherwin-Williams, SUPERVALU and Target.

Which practice areas showed the least growth?
N/A

What is the distribution of accounts across practice areas?
N/A

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
We added 14 new clients to our total list of 40 clients in 2006. The major wins include: · American Humane Association ( Denver) · Chevrolet ( Detroit) · ClearWay Minnesota · Dunkin' Brands ( Boston) · Ginn Resorts (Celebration, Fla.) · Hasbro ( East Longmeadow, Mass.) · McDonald's ( Oak Brook, Ill.) · Sears ( Hoffman Estates, Ill.) · Sherwin-Williams ( Cleveland) · SUPERVALU ( Eden Prairie, Minn.) · Target ( Minneapolis) · Therma-Tru ( Toledo, Ohio)

Of your 2006 wins, how many were across three or more countries?
None

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
Formica

Did you expand any existing accounts into new domestic or international markets or sectors?
Yes. Maytag was the biggest organic expansion in 2006 when we were retained by Whirlpool Corp. to continue representing the Maytag and Amana brands following its acquisition of Maytag Corp. in April. As a result, Carmichael Lynch Spong retained one of its five largest clients and a long-time cornerstone of our growth. Fortune Brands also provided organic growth opportunities by awarding us the businesses of Therma-Tru. When an executive from MasterBrand Cabinets, a Fortune Brands brand, moved from the cabinet business to join the doors business at Therma-Tru, he remembered the great relationship he'd had with his MBCI agency. Carmichael Lynch Spong was invited to pitch the public relations business and Therma-Tru was awarded that business based on the creative approach to Therma-Tru's business along with the agency's ability to leverage synergies between the two companies.

What proportion of your clients are on a retainer? Has this changed over the past year?
85%

What was your 2006 global (including US) revenue?
<$50 million

What was the % change over 2005 global revenue
No information given.

What was your global profit margin in 2006?
No information given.

What was your 2006 US revenue?
<$50 million

What was the % change over 2005 US revenue
No information given.

What was your US profit margin in 2006?No information given. Did you experience top-line or bottom-line growth in the past year, or both?
Carmichael Lynch Spong experienced both top-line and bottom-line growth in 2006.

How much of your growth was organic, and how much was due to new business won?
Approximately 50 percent of our growth was organic, and 50 percent is attributed to new business.

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
Agency declined to give information

M Booth & Associates

Name of parent division/company (enter both where applicable)
N/A

Name of subsidiary companies
N/A

Has your ownership status changed in the past year? If yes, please explain
No

Name of global CEO and US CEO (or most senior equivalent)
Margaret Booth

What is your current headcount? How has your headcount changed since FY 2005?
57
No

What was the percentage of staff turnover in 2006?
5%

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
No

What senior staff have departed the firm? Please state name and previous title
Julie Masow, VP
Diane Fusilli, SVP

Please list any other senior management changes, including restructures and significant, senior-level promotions
Promotions:
Christina Friedkin VP
Kurt Rossler VP
Lauren Swartz VP

Have you made any acquisitions in the past year, or merged with another agency?
No

How many wholly owned offices do you have globally? Please list with agency names and cities under the following headings. Add majority-owned offices in parentheses.

  • North America
    1 - M Booth & Associates (New York)

How many partly owned offices or affiliates do you operate globally?
None

What offices opened in 2006 or early 2007? (State when)
None

What offices closed in 2006 or early 2007? (State when)
None

Which regions, US and globally, are growing, and why?
N/A

How many practice areas do you have? Please list.
The agency is organized into five practice areas: Consumer, Travel and Lifestyle, Corporate, Public Issues, and Healthcare.

Which ones are new?
Although it's not a new practice, the Consumer Practice incorporates dedicated fashion & retail expertise.

Of those, which ones are part of the core strategy of the agency?
The agency's core strategy is to pursue organic growth among brand leaders in selected sectors - consumer packaged goods, healthcare, travel, financial services, food and beverage, fashion and beauty, technology, and non profits - and to sustain a balanced, diversified portfolio. All five practices are integral to our strategy.

Which practice areas have been phased out in the past year?
None

What practice areas showed the most growth? Please elucidate.
In terms of revenue, in 2005 the Consumer Practice grew 37%, the Travel and Lifestyle Practice grew 16%

Which practice areas showed the least growth? Please elucidate.
N/A

What is the distribution of accounts across practice areas?
Revenue is distributed across five key industry sectors:
24% in food and beverages
22% in travel
21% in fashion and beauty
17% in corporate and technology
14% in healthcare

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
New Brands/Clients

  • 1. Aerosoles, AOR to roll out an integrated retail campaign to reach younger consumers.
  • 2. Harrah's Atlantic City, AOR to generate awareness of the expansion of Harrah's Atlantic City new assets including the Red Door Spa, and the luxury shops at the Pier at Caesars.
  • 3. W.K. Kellogg Foundation, to promote it's Food and Society initiative.
  • 4. Myrtle Beach Area Chamber of Commerce, to create national awareness and positive perception of the area as a multifaceted tourism destination.
  • 5. Playtex Baby, AOR to raise awareness of product superiority.
  • 6. Somerset Medical System, to promote its new, national sleep center.
  • 7. Turkey Ministry of Culture and Tourism, AOR to increase leisure travel bookings from the U.S. market.

In addition, the agency won new assignments with existing clients including Unilever (Wish-Bone, Country Crock Side Dishes), Alberto Culver (Mrs. Dash), American Express (OPEN), The Robert Wood Johnson Foundation, and Remy Cointreau (Highland Park).

Of your 2006 wins, how many were across three or more countries?
0

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
N/A

Did you expand any existing accounts into new domestic or international markets or sectors? Please elucidate.
No.

What proportion of your clients are on a retainer? Has this changed over the past year?
75%
No

What was your 2006 global (including US) revenue?
$9,465,874

What was the % change over 2005 global revenue?
17.3%

What was your global profit margin in 2006?
N/A

What was your 2006 US revenue?
$9,465,874

What was the % change over 2005 US revenue
17.3%

What was your US profit margin in 2006?
N/A

Did you experience top-line or bottom-line growth in the past year, or both? Please elucidate.
Revenues increased 17.3% over 2005.

How much of your growth was organic, and how much was due to new business won?
70% of the agency's revenue growth in 2006 was "organic" in the sense that we won new and expanded assignments, and new brands, from our existing client base. This includes new assignments with Unilever, American Express, Alberto Culver, The Robert Wood Johnson Foundation, and Remy Cointreau USA, and others. The balance of new business, 15%, added new clients to our portfolio.

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
Revenue growth slightly exceeded our expectations. We projected 15% growth across the practices and the agency. We grew in excess of 17%. The agency experienced exceptionally strong growth in its Consumer Practice.

Over the two-year period, 2005 and 2006, agency revenues grew 40%. Over a four year period, since 2002, agency revenues doubled.

RBB Public Relations

Name of parent division/company (enter both where applicable)
N/A

Name of subsidiary companies
N/A

Has your ownership status changed in the past year? If yes, please explain
N/A

Name of global CEO and US CEO (or most senior equivalent)
Christine M. Barney

What is your current headcount? How has your headcount changed since FY 2005?
25
Increased

What was the percentage of staff turnover in 2006?
8%

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
No

What senior staff have departed the firm? Please state name and previous title
None

Please list any other senior management changes, including restructures and significant, senior-level promotions N/A

Have you made any acquisitions in the past year, or merged with another agency?
No

How many wholly owned offices do you have globally?
1
North America - rbb Public Relations - Miami, Florida

How many partly owned offices or affiliates do you operate globally?
None

What offices opened in 2006 or early 2007? (State when)
N/A

What offices closed in 2006 or early 2007? (State when)
N/A

Which regions, US and globally, are growing, and why?
N/A

How many practice areas do you have?
10 - Please list. - Hispanic - Travel & Leisure - Healthcare - B2B - Luxury Retail - Food & Beverage - Real Estate - Crisis Communications - Community Relations and Corporate

Which ones are new?
None

Of those, which ones are part of the core strategy of the agency?
All, we are a full-service PR firm

Which practice areas have been phased out in the past year?
None

What practice areas showed the most growth? Please elucidate.
Corporate - Most companies look to rbb to manage the southeast region on their behalf

Which practice areas showed the least growth? Please elucidate.
Crisis

What is the distribution of accounts across practice areas?
Even

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
National Parkinson Foundation - Language Line Services - Blue Cross Blue Shield of Florida - The Miami Herald - Cuca Fresca

Of your 2006 wins, how many were across three or more countries?
None

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
None

Did you expand any existing accounts into new domestic or international markets or sectors? Please elucidate.
Language Line Services (new domestic markets for Hispanic and Asian outreach) - Starbucks Coffee (expanded market, Atlanta)

What proportion of your clients are on a retainer? How has this changed over the past year?
90%
No

What was your 2006 global (including US) revenue?
< $50 million

What was the % change over 2005 global revenue
N/A

What was your global profit margin in 2006?
N/A

What was your 2006 US revenue?
< $50 million

What was the % change over 2005 US revenue
35% increase

What was your US profit margin in 2006?
20% increase

Did you experience top-line or bottom-line growth in the past year, or both? - Both Please elucidate.
We are excited about our new business wins, but more excited about our organic growth. We raised the bar on fees and moved into mostly double digit monthly retainers. We are very pleased with our 35% growth in revenues and 3 point increase in profit to a healthy 20%.

How much of your growth was organic, and how much was due to new business won?
50%/50%

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
Exactly on track with our goals.

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