Top 50 Tech consultancies 2006

Technology agencies are enjoying a return to buoyant times, says Robert Gray, with US companies in particular are making a comeback in the technology sector.

While many pure consumer agencies had a hard time in 2005, the story in the technology sector - where the trend continued for moving B2B products into the consumer space - was much more bullish.

This year's Top 50 league table underpins a story of confidence, recovery and new opportunities within the sector. The total fee income for this year's top 50 is £73m, a rise of 27 per cent on last year's total of £58m. This year, a tech agency needed more than £100,000 of fee income just to get into the table. This compares with a mere £12,000 last year.

‘The sector was more buoyant last year than it has been for about five years,' says Brands2Life co-founder Giles Fraser. The agency saw its tech fee income rise by a healthy 38 per cent to £2.9m, with new business coming from the likes of Logitech, Informa, Bulldog Broadband and T-Mobile.

‘A number of elements came together,' Fraser adds. ‘The equity markets were good, and venture capitalists released more money to tech companies, which has had an impact on their promotional budgets.'

Confidence boost
Crispin Manners, CEO of 15th-placed agency Kaizo, says another reason for the upturn is tech client firms' better sales performance. He argues that many of the organisations which put a moratorium on IT investment following the 2001 crash now feel compelled to invest in hardware and software or risk losing competitiveness.

He adds that certain technologies have matured to the point where they make more commercial sense for businesses, citing VoIP as an example. Wireless technologies, such as Wi-Fi and WiMax, have also developed strong business cases.

On the consumer-tech side, the market has blossomed, with demand for gadgets such as MP3 players remaining healthy. But while the overall picture is definitely more positive than at any time in the past five years, no one is comparing the current resurgence to the runaway boom of seven years ago. For the moment, it seems that lessons have been learned from the dotcom bubble, and the reckless investment and marketing decisions that led to its implosion.

‘Our experience, and I bet it's not uncommon, is that US tech firms are coming back,' says Nelson Bostock Communications (second) joint managing director Martin Bostock. ‘But they are not coming back with anything like the budget levels of what you might call the "good times".'

Bostock adds that there are still some US clients who expect to run successful PR programmes across Europe on too small budgets. Wins for the agency, such as the Mobile Entertainment Forum - the body that represents companies interested in mobile phones as an entertainment channel (as opposed just telephony devices) - illustrate that media and technology convergence remains a notable trend. This, says Bostock, has agency personnel implications, with clients looking for ‘broadly skilled' PROs who understand what is happening beyond specialist arenas.

International issues
Indirectly, the growth in the technology sector during 2005 may help to explain the absence from this year's table of 2004 chart-topper Lewis PR. In 2004 its fee income was £6.3m, but it declined to submit its figures this time around.

The reason, according to UK general manager Kath Pooley, is because the agency wants to focus on international group growth - but there is speculation that the company is preparing for an IPO. Whether or not this is the case, Pooley points to one issue that she believes many tech agencies will face this year.

‘Maintaining consistency across pan-European campaigns will become a hot topic. Clients are fed up with working in networks that are cobbled together. They want one lead agency that can manage the process more seamlessly than what is offered by many tech agencies today.'

According to Sandy Purewall, director of Octopus Communications (23rd), press appetite for business and tech-related stories is on the increase. Octopus, the Windsor-based B2B specialist, won more than £600,000 worth of new business in 2005, including accounts with Google, Computacenter and virus software firm McAfee. It achieved at least one item of controlled national coverage every week in 2005.

Sadly, again missing from our table are the Sarbanes-Oxley-affected agencies. But the indications are that most of these shared in the success of the included agencies.

Weber Shandwick claims UK technology PR revenue grew by 14 per cent last year, with new-business revenue rising 104 per cent. From its top five clients, organic fee growth was 32 per cent.

‘Client start-ups are back with a flourish,' adds WS Technology MD Michelle McGlocklin. ‘The investment in Europe from venture capitalists is also healthy.'

One of the big people-stories last year involved Edelman, which poached Weber Shandwick Technology director Jonathan Hargreaves to take on the newly created role of technology MD. Hargreaves reorganised the practice, made 12 new hires and said he is adding ‘analyst and influencer relationship skills' to the media relations capabilities at the agency. 

Revamps and acquisitions
Tables do not always show the full picture, though. August.One Communications fell to 28th after a 58 per cent revenue decline on 2004. But this was not the result of a catastrophic loss of clients. It is repositioning itself outside the tech sector to concentrate on corporate, consumer and B2B work.

During 2005, August.One transferred approximately half of its business - predominantly Microsoft - over to Next Fifteen sister agency Inferno PR, which leapfrogged its older sibling in our rankings. ‘We will still work for technology clients, but we will not be doing technology PR,' says August.One managing director Sarah Howe. Clients of this ilk include the price comparison site Pricerunner.co.uk.

Elsewhere within the Next Fifteen group, Bite Communications acquired two-year-old strategic comms consultancy Credo Communications, which pulled in around £250,000 in fees - it is not in the table because of its absorption by Bite. The deal was completed at the end of the year and saw Credo managing director David Hargreaves take over as MD of Bite Communications' UK operations.

Hargreaves says Bite is also diversifying its services, earning around £50,000 a month from the growing arena of analyst relations, and is planning a move into search-engine optimisation as part of a broader approach to online PR strategy. Client wins in 2005 included Symantec, Autonomy and Yahoo!.

Elsewhere, on the same subject of diversification, Hotwire UK regional director Brendon Craigie says: ‘Consumer-generated content will be a massive driver this year.'

While the spread of blogging has been written about ad nauseum, Craigie feels there will be further opportunities in areas such as podcasting. Moreover, he says increasingly tech-savvy staff are creating security concerns for their employers as they bring devices such as iPods and USB memory sticks into work - one area for further comms growth, perhaps.

TOP 50 PROFILES 

HOTWIRE PR (5) - £3,377,103
Fifth-placed Hotwire PR grew income by £1.3m last year, -  and has achieved 50 per cent year-on-year  growth since 2003.

UK regional director Brendan Craigie attributes much of this to 13 new clients in 2005, including satellite navigation provider ALK and internet video search specialist Blinkx. But with half of growth last year credited to existing clients such as BlackBerry and security specialist Thales, he adds: ‘We also averaged a client retention rate of 86 per cent'.

Additional spend from Chordiant Software and security specialist Tumbleweed was a result of Hotwire extending its European reach, adding offices in Italy and Spain to those in the UK, Germany and France. ‘Clients find our approach to accountability and measurement compelling - we don't charge if we don't achieve,' Craigie says. He also puts growth down to superior industry knowledge. ‘The generation of technology entrepreneurs who got burnt by the dotcom boom are now looking for more from a tech agency in terms of quality and the knowledge of staff,' he explains.

To feed this, the firm is divided into specialist divisions: applications and services; digital media; consumer; telecoms; and enterprise and electronics. In 2005, to bolster its offering, the agency established a finance and banking division headed by Scott McLean, attracting new names - notably accounting software provider MYOB.

One of its most successful campaigns was helping gaming minnow In2Games get one over the big boys with Real World Golf, which was the top PlayStation title of the year in terms of sales.

Senior agency hires included former Rainier PR consumer technology brand chief Paul Naphtali, who joined as head of consumer. Meanwhile, Hotwire took on six graduates. These were whittled down from an astonishing 600 applications. A further six are set to join in August.

At a glance:

Best-performing area of business in 2005: Consumer
Top three client wins:  Direct Marketing Association, Information Builders, MYOB
Best hires: Paul Naphtali, and six graduates
Expected technology fee income in 2006: £4.4m
Plans for 2006 increase: To support client expansion in Europe; finance and consumer clients

KAIZO (15) - £1,604,136
After a disappointing 2004, when Kaizo dropped technology fee income by 25 per cent to £938,204, last year it bounced back - 71 per cent growth led to income of £1.6m.

CEO Crispin Manners attributes this recovery to factors including last June's purchase of ‘public speaker placement' firm WPR - which brought clients including Oracle and Hewlett-Packard on board - plus the general market upturn.

‘Certain technologies have appeared in the past five years, such as VoIP - the firms behind which are investing more in PR as the technology matures to the point where people feel safe buying it,' says Manners. Also, the agency has reviewed its client satisfaction measures, using a system developed by Bain Consulting in the US, which looks at the direct correlation between customer expectations and business growth rates. ‘This has enabled us to isolate areas where  clients may not be happy with us,' says Manners.

The agency has picked up new clients including security specialist BigFix and storage networking firm Emulex. Unfortunately, WPR lost its Cisco account, but this has been replaced in part by more work from existing Kaizo clients. As part of the WorldCom network, the agency has also benefited from referrals from its US partners, which has brought firms including Rockwell Automation into the fold. New faces include account director Richard Cook, who will inject ‘consumer know-how' into B2B comms, and Faye Bosworth, who ran her own tech PR consultancy.

This April, joint Kaizo MD Paul Smith shifted to become part-time MD of WPR; fellow joint MD Liz Andrews, who joined more than 11 years ago as a graduate, quit for new challenges.

Developments include working with London School of Economics social psychologist Dr Paul Marsden on the practice of word-of-mouth marketing.

At a glance:

Best-performing area of business in 2005: Security, storage, VoIP/convergence
Top three client wins: Anite, BigFix, Emulex
Best hires: Faye Bosworth and Richard Cook
Expected technology fee income in 2006: £1.2m
Plans for 2006: To bring word-of-mouth communications to technology and demonstrate the unbreakable link between PR and sales

Hotwire and Kaizo won new business, and pulled in extra work from existing clients.

INFERNO PR (16) - £1,601,086 (Tech fee income to year ended December 2005)
Dedicated tech firm Inferno PR is a new entrant to this year's table, and grew its fee income by a whopping 244 per cent in 2005 to hit the £1.6m mark.

The agency's managing director, Grant Currie, describes this performance as  ‘quite gratifying'. However, the bulk of this stellar growth was the result of a merger on 1 June with a portion of sister agency August.One Communications, which handed over most of its Microsoft business. As a result, Inferno added 11 staff and effectively doubled in size.

‘Our parent company Next Fifteen looked at the best way to take its relationship with Microsoft forward, and decided to bring our and August.One's Microsoft accounts under the one roof,' says Currie.

In response to this consolidation, Microsoft awarded Inferno its ‘People-Ready' business campaign, which recently involved Microsoft founder Steve Ballmer delivering a keynote speech at the  Institute of Directors' conference at the Royal Albert Hall.

However, the changes presented a significant cultural challenge for the agency. Not only did it suddenly have more new staff, but it also moved offices, from Hammersmith to Shepherd's Bush. This disruption included a six-week stint in temporary offices in between the move.

‘If you think of all the most stressful things you can do in life, such as marriage, divorce and moving house, from a business point of view we did all of that, and all at the same time,' says Currie.

This upheaval also placed pressure on relationships with other long-standing clients, such as management consultant Cap Gemini and software company Northgate. However, in 2005 both of these retainers put extra projects Inferno's way while, according to Currie, a further 36 per cent of growth came from new clients.

Even before the merger, the year started with a bang when the agency snatched a Computer Associates brief from incumbent Lewis PR. By October, the company was picking up US VoIP operator Vonage. And in September, financial services software company Bolero joined the Inferno fold. Back to the present, the agency is currently wrapping up an ongoing project for US security company Fortify.

Significant personnel to join the business last year included director James Tutt from August.One, while former Financial Director deputy editor Tom Berry joined as associate director.

This year, the company reveals that it is concentrating on trying to build its reputation by word of mouth, and exploring a new blogging business division.

At a glance:

Best-performing areas of business in 2005: Telco business, including Vonage VoIP account
Top three client wins: CA, Vonage, Bolero
Best hire: Tom Berry, associate director
Expected technology fee income in 2006: £2m
Plans for 2006: Continued wireless and telco development, and growth in the B2B sector

CHAMELEON PR (24) - £998,511 (Tech fee income to year ended December 2005)
Hi-tech B2B specialist Chameleon PR had an exceptional year, growing tech fee income to almost £1m in 2005, up by over 46 per cent on 2004. ‘It was an interesting year with lots of recommendations from current clients,' says agency founder and MD Helen Holland. ‘Staff and clients who had moved to new in-house roles took us with them.'

Of the eight ‘pure' tech wins scored in 2005, half came from contacts the agency had built up at PeopleSoft, prior to the client's acquisition by rival Oracle at the end of 2004. New word-of-mouth wins included enterprise services firm Cape Clear, financial management software provider CedarOpenAccounts, sales intelligence firm Vecta, and business tech specialist Network General.

Meanwhile, the agency won a number of accounts by pitch. These included Genesys, and conferencing and mobile content provider DX3. The strength of its business tech work enabled the firm to launch a consumer division in May 2005, headed by former Lexis PR creative director Stuart Hehir. ‘We had some consumer interest at the end of 2004 with SpinVox, which converts voicemail to text. It was our first foray into consumer PR, but it has been very successful,' says Holland. In 2005, this new venture accounted for four per cent of income, but the target is to grow this figure to 20 per cent by March 2007.

To date, the consumer team has picked up online gambling watchdog eCOGRA and Enterprise Insight, a government scheme that encourages youth innovation in business. The latter resulted in the agency organising an event at 11 Downing Street. Here, young entrepreneurs met celebrities and business leaders - including band Basement Jaxx and Saira Khan, star of the BBC's first series of The Apprentice.

Other interesting projects included launching new client Staellium's StealthText technology, where SMS messages self-destruct 40 seconds after they are read. It successfully pitched this secure, business-related technology to the tabloids by highlighting its use for love-cheats. This innovation attracted interest from the Ministry of Defence, MI5 and Paramount Pictures. The latter investigated a tie-in with the launch of Mission:Impossible 3.

The agency lost only two clients in 2005: retail pricing software firm DemandTec, and HR software company SoftScape. In both cases the clients withdrew all PR activity in the UK. This year, the firm broke with its flat senior management structure and created a board, with former Porter Novelli European CEO Neil Backwith taking on the role of non-executive director.

At a glance:

Best-performing area of business in 2005: Mobile Services
Top three client wins: CedarOpenAccounts, StealthText, Genesys
Best hire: Stuart Hehir
Expected technology fee income in 2006: £1.3m
Plans for 2006: To continue its focus in technology and mobile comms, consolidate global partnerships and recruit more PROs with a tech background

Inferno PR and Chameleon PR both witnessed stellar fee income growth last year.


TOP 50 TECH CONSULTANCIES 2006, and their respective Tech fee income

01.  Write Image - £5,957,422 
02.  Nelson Bostock Communications - £3,779,489
03.  Citigate Dewe Rogerson - £3,508,000 
04.  Edelman - £3,498,104 
05.  Hotwire PR - £3,377,103 
06.  Waggener Edstrom - £3,162,643 
07.  Brands2Life - £2,918,375 
08.  Bite Communications - £2,663,106 
09.  Axicom - £2,360,524
10.  The Red Consultancy - £2,125,441 
11.  Text 100 - £2,104,715  
12.  Rainier PR - £1,841,055 
13.  Portfolio Group - £1,751,688 
14.  A D Communications - £1,699,758 
15.  Kaizo - £1,604,136 
16.  Inferno PR - £1,601,086  
17.  Johnson King - £1,577,782  
18.  The ITPR Group - £1,472,618 
19.  The Whiteoaks Consultancy - £1,443,199 
20.  Berkeley PR - £1,319,789 
21.  Company Care Communications - £1,310,638 
22.  College Hill Associates - £1,193,042 
23.  Octopus Communications - £1,039,798  
24.  Chameleon PR - £998,511 
25.  EML - £956,000 
26.  Pinnacle Marketing Communications - £943,600 
27.  Cohesive Communications - £891,904
28.  August.One Communications - £820,595
29.  Strategic  Alliance International - £810,545
30.  ECCO Public Relations - £784,973
31.  Mulberry Marketing Communications - £759,826 
32.  The Hoffman Agency - £623,000
33.  Spreckley Partners - £597,268 
34.  Harrison Cowley - £582,267 
35.  Cubitt Consulting - £469,712
36.  Lexis Public Relations - £464,561 
37.  Neesham Public Relations - £418,638 
38.  Midnight Communications - £340,000 
39.  Media Strategy - £221,674 
40.  Sonus Public Relations - £207,543  
41.  Ruder Finn UK - £160,049 
42.  Ptarmigan Consultants - £158,412 
43.  MC2 (Manchester) Ltd - £157,643
44.  Grayling UK Limited - £157,529 
45.  Cow PR - £144,500 
46.  Agility PR - £139,625  
47.  The Bright Consultancy - £134,730 
48.  Lansons Communications - £128,625 
49.  Paratus Communications - £101,869 
50.  AS Biss & Co - £100,750

All figures relate to year ended December 2005. Fee income=PR fees plus mark-up. All figures are gathered from forms submitted to PRWeek for Top 150 Consultancies report (21 April)

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