Dan Klores Communications: Agency Business Report 2007

DKC transitioned out of lower-fee sectors, such as film and event publicity, in favor of corporate work, while phasing out short-term projects.

DKC transitioned out of lower-fee sectors, such as film and event publicity, in favor of corporate work, while phasing out short-term projects.

"We did leave money on the table as we refined our client scope," Sean Cassidy, president, says, avoiding projects in the three-month-and-less range in favor of six-to12-month tasks. However, that didn't extend to crisis management, which may still be short-term, but is lucrative, he adds.

From successful campaigns for powerful brands from Microsoft to Delta Airlines, to warming up in the sports arena (which grew 20%), DKC still has a reputation as a go-to for high-profile names.

"We are very comfortable with our level of growth and welcome the challenge to build a national presence," Cassidy says.

Principal: Sean Cassidy, president
Ownership: Independent
Offices: One, in New York

Staff
Rose 20% last year to 120, with 5% turnover, including exiting VPs Rob Shuter and Randi Peck. Key hires included MD William Cunningham from Mayor Bloomberg's office, SVP Rick Cerrone (New York Yankees), and a trio of VPs in Wendy Sachs, Maryanne Scaccia, and Marissa Mastellone. Scott Miranda and Jeff Klein were promoted to MDs.

Regional performance
DKC says it increased its national profile on the strength of its client opportunities.

Practice areas
Corporate, travel, public policy, and sports showed the strongest growth, complemented by government affairs, public policy/crisis management, healthcareentertainment/fashion, consumer products, media business, and creative properties. DKC added a unit for developing Web/blog-based strategies and online monitoring and trend predictions.

Accounts
With 80% of accounts on retainer, new wins included Sprint, Microsoft (national accounting software launch), US Weekly, Con Edison, Reuters, FTD.com, Hard Rock Hotels, Michael Eisner/Tornante, Hythiam, and Russell Athletic.

Financial performance
2006 revenue of $20.5 million represented a 5% increase.

Agency's full questionnaire follows below:

Name of parent division/company
N/A

Name of subsidiary companies
N/A

Has your ownership status changed in the past year?
No

Name of global CEO and US CEO
Sean Cassidy, President

What is your current headcount? How has your headcount changed since FY 2005?
120
20 percent increase

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

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company:
William Cunningham,
 MD public affairs (The Office of Mayor Michael Bloomberg)
Rick Cerrone, SVP sports (The New York Yankees)
Wendy Sachs, VP creative properties (NBC News)
Maryanne Scaccia, VP travel and hospitality (Consolidated PR UK)
Marissa Mastellone, VP travel and hospitality (LaForce & Stevens)

What senior staff have departed the firm? Please state name and previous title
Rob Shuter, VP
Randi Peck, VP

Please list any other senior management changes, including restructures and significant, senior-level promotions:
Scott Miranda and Jeff Klein promoted to Managing Directors

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

How many wholly owned offices do you have globally?
One office, located in New York City

How many partly owned offices or affiliates do you operate globally?
Zero

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? Please list.
Corporate
Government Affairs
Public Policy/Crisis Management
Healthcare
Sports
Entertainment/Fashion
Travel/Hospitality
Consumer Products
Media Business
Creative Properties

Which ones are new? 
None

Of those, which ones are part of the core strategy of the agency?
All

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

What practice areas showed the most growth? Please elucidate. 
Corporate
Travel
Public Policy
Sports

Which practice areas showed the least growth?
Agency grew across the board; however DKC began to phase out short-term project work.

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.
Sprint
Microsoft (National accounting software launch)
US Weekly
Con Edison
Reuters
FTD.Com
Hard Rock Hotels, Resorts & Casinos
Michael Eisner/Tornante
Hythiam Pharmaceuticals
IN Demand
Peroni Beer
Russell Athletic

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. 
No key accounts were lost.

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

What proportion of your clients are on a retainer? Has this changed over the past year?
80%. Increased emphasis on retainer vs. project.

What was your 2006 global (including US) revenue?
$20.5 million

What was the % change over 2005 global revenue:
5%

What was your global profit margin in 2006?
Agency declined to give information.

What was your 2006 US revenue?
Agency declined to give information.

What was the % change over 2005 US revenue
Agency declined to give information.

What was your US profit margin in 2006?
Agency declined to give information.

Did you experience top-line or bottom-line growth in the past year, or both? Please elucidate.
Both

How much of your growth was organic, and how much was due to new business won?
Most was due to new business won.

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
Met expectations.  2006 was a year where DKC transitioned out of lower fee sectors such as film and event publicity in favor of corporate work.   DKC also sacrificed some revenue by becoming more stringent about taking short-term project work.

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