Makovsky & Company: Agency Business Report 2010

In a year of budget cuts, the firm had to be more "marketing-aggressive than ever," says CEO Ken Makovsky.

Principal: Kenneth Makovsky, president and CEO
Ownership: Independent
Office: New York

Staff
Headcount stayed at 50 for 2009, though there was a 20% turnover rate. Frank Ovaitt, former Institute for Public Relations CEO, was hired to lead its new research division.

Practice areas
Financial services, healthcare, and tech grew the most. IR, which showed the least growth, will be folded into the firm's financial services group in 2010. The agency also launched a cross-practice research group.

Accounts
Key wins included Dice Holdings, Tix Corporation, and ServiceLink. Losses included AXA Rosenberg, AccuVein, Scleroderma Foundation, and Adlens Beacon.

Financial performance
The agency ended 2009 with $10.2 million in revenue, a 7% decrease from 2008. Its profit margin was 10%.

Analysis
In a year of budget cuts, the firm had to be more "marketing-aggressive than ever," says CEO Ken Makovsky. As such, he adds that the divide between new business and organic revenue was about 60/40, a departure from its typical 50/50 breakdown.

"More of our name brand clients were cutting back," he explains.

As part of the new business approach, the firm increased its focus on its branding and interactive group – Web site development and digital advertising – which contributed about 10% of the firm's annual revenue, versus 8.5%in 2008, he notes.

"We're talking about a more integrated strategy for the agency," says Makovsky.

In 2009, the firm's strategy to work more in the green space contributed to the growth of its b-to-b tech sector, with the addition of energy and clean tech clients such as Itron.

Makovsky is forecasting a 13% growth in 2010, with an increased focus on global expansion via its IPREX network.

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