The Jeffrey Group: Agency Business Report 2010

Business picked up in Q3 and began to turn around in Q4.

Principals: Jeffrey Sharlach, CEO and Jorge Ortega, president
Ownership: Independent
Offices: 5 globally, with 2 in the US – Miami and New York

Staff
Headcount is 53, down from 65 in 2008. Turnover was 10%. All US staff took a 10%
pay cut (now reinstated). President Jorge Ortega reports "four or five" junior- and mid-level layoffs, noting a few have been rehired. New hires included Christina Iglecio, GM in Brazil; Gerson Penha, digital communications director; and Santiago Beti, client service director in Argentina.

Practice areas
The Jeffrey Group is positioned as a firm focused on Latin American and US Hispanic markets. In 2010, the agency formalized its digital communications practice.

Accounts
Of its 25 to 30 clients, 75% are on retainer. Wins included Bayer CropScience, Hasbro, Johnson & Johnson medical, Coca-Cola, and T-Mobile. Sony Ericsson and Sony Latin America were lost in consolidation.

Financial performance
US revenue fell 18% to $4,163,304. Ortega says net profit was also down "maybe 10%," but the agency exceeded forecasts.

Analysis
Business picked up in Q3 and began to turn around in Q4. Solid showings in Latin America offset losses, explains Ortega.

Large firms continue to partner with The Jeffrey Group, and Ortega is optimistic about 2010, expecting 15% to 20% growth in US Hispanic business. He notes soccer's World Cup has already brought in five or six accounts, as companies across all industries are seeking engagement there. The firm is hiring in Miami, New York, and Brazil.

"We view 2009 as an economic hiccup," adds Ortega. "Clients are cautious, but there's a great deal of optimism. We're making significant investments in digital, healthcare, and nutrition. As we make investments, we're getting more business."

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