Top European Agencies 1997: THE WORLD IN THEIR HANDS - ’Today trans-national, tomorrow the world’ is the policy being adopted by the big players

Last year was, in the main, a good one for owned groups. There are several reasons for this. First and foremost, some of Europe’s largest economies are in far better shape than was the case in 1995. And even in some of those countries where the figures still point to recession there is talk of impending upturns - talk which encourages judicious spending.

Last year was, in the main, a good one for owned groups. There are

several reasons for this. First and foremost, some of Europe’s largest

economies are in far better shape than was the case in 1995. And even in

some of those countries where the figures still point to recession there

is talk of impending upturns - talk which encourages judicious

spending.



Undoubtedly owned groups have benefited from these improved

conditions.



But perhaps of as much significance is the continuing trend towards

globalisation among large corporations. ’People have been talking about

it for many years but they’re now moving from multinational to global,’

says Burson-Marsteller Europe president and chief executive officer

Ferry de Bakker.



’The large multinational companies are getting more comfortable with the

idea that a single agency can handle their business around the world,’

agrees Ketchum international senior partner, Jerry Olszewski. ’The

larger agencies are getting to the point where we can demonstrate

consistent quality on a global basis, with easy access.’ An example of

this is provided by Fleishman-Hillard, which last year co-ordinated the

corporate and product PR surrounding the spin-off of the Imation

business out of 3M. The agency was called upon to co-ordinate PR in 24

countries.



To emphasize the strength of its network, Shandwick has now completed

branding all its 13 European offices with the Shandwick name. The

strategy is to build up the size and capabilities of its owned offices,

rather than open new European offices, says managing director Europe

Volker Stoltz.



Burson-Marsteller on the other hand has been expanding its ownership

into new markets. Last year it opened an office in Portugal headed up by

Cristina Valente and earlier this year it purchased a majority stake in

Swiss agency Jaggi which it rebranded as Jaggi Burson-Marsteller.



Branding continues to be an intriguing issue. While the likes of

Burson-Marsteller, Hill and Knowlton and Fleishman-Hillard have

unquestionably strong brand recognition, other owned groups do not

benefit from as sharp an identity. The Porter Novelli International

brand, for example, was only launched back in October 1996. ’Our brand

is still relatively unknown,’ concedes Porter Novelli International

joint chairman Peter Hehir. ’There’s an awful lot to do until we’ve got

real recognition.’



The Omnicom-owned group’s success has been underpinned by solid

performances from UK top five consultancy Countrywide Porter Novelli and

German market-leader Kohtes and Klewes. Issues for the group in 1997

include the details of its worldwide merger with Omnicom’s latest PR buy

Fleishman-Hillard.



A question mark still hangs over the practical implications of the

merger but indications are that Omnicom is unlikely to merge two such

strong brands into one entity.



Euro RSCG International Communications (ERIC) has had to deal with

several changes within the group since the beginning of 1996. It is

still without a head of PR in Germany following the departure of

Dietrich Schulze van Loon last year, with the heads of its five offices

in the country (badged under the ABC and IPR&O names) reporting direct

to the head of parent ad agency Euro RSCG in Germany Gerhard Schoeps.

Also, second string agency ABC Zwei has been rolled back into ABC. In

France it merged its agencies Groupe Omnium and Euro RSCG Finance to

create a single entity, Euro RSCG Omnium et Associes, under chairman

Frederic Lemaitre.



GCI Europe, meanwhile, grew its income by 28 per cent. Towards the end

of 1996 GCI’s lobbying arm APCO set up in Paris under managing director

Charles-Henri D’Auvigny. ’It makes sense to have a specific brand for

public affairs, that’s why we decided to market the two names across

Europe,’ says chairman Jerome Lascombe.



Grayling also achieved growth topping 20 per cent. An increase in

pan-European work - such as the EC’s consumer campaign promoting olive

oil and a brief extending as far as eastern Europe for the European

Association of Urologists - was a significant factor. Changes in its

owned network included the merger of Corolle Grayling with Annie

Schneider to form a new agency in Paris bearing the Grayling name,

doubling staff numbers to 16 staff. ’Our parent company Lopex is

potentially acquisitive and has a strong balance sheet,’ says Grayling

group managing director Nigel Kennedy. However, in the short to medium

term Grayling’s acquisition strategy is to focus on the US.



Hi-tech specialist Text 100 takes a different approach. ’Our strategy is

to grow our own offices,’ says director mainland Europe Mark Adams.



’We are not an acquisitive company. I haven’t worked out a way to buy

the loyalty and enthusiasm of people at other companies.’ Text set up

Swedish office a year and a half ago, following that up with the

establishment of an operation in Spain less than six months ago.



Mathieu Thomas/Herald has prospered with a service that group managing

director Paul Mathieu identified as a gap in the market in the early

1990s.



’The gap was a demand for agencies that can provide a one-stop service

to clients who need a service across several countries without the costs

associated with some of the high overhead multinationals.’ The group

opened a Paris office in 1991 and a Munich office three years later. It

is looking to set up an owned operation in Milan.



Harvard PR is also considering opening an office in Milan, as well as

one in Barcelona or Madrid. ’We expect to see the PR markets in Spain

and Italy mature rapidly in the next 12 to 18 months,’ says Harvard

managing partner Nicholas Taylor.



Corporate and financial group Ludgate opened an office in Bucharest two

months ago to advise the Romanian government on realising shareholder

value in privatisation programmes; while Hill and Knowlton - which is

building its capabilities across Europe in the pharmaceutical, IT and

marcoms practice areas set up a Stockholm office under Theo Martin in

June 1996.



Manning Selvage and Lee, meanwhile, is holding talks with a view to

acquiring Italian affiliate Mavellia and longer term may look to do the

same with new French affiliate Beau Fixe.



One owned group has bucked the trend of looking to acquire or start up

further subsidiary offices across Europe. Ogilvy Adams and Rinehart has

stuck to its ’best practice’ network approach, where its offices in

London, Brussels and Paris work together with the best qualified

agencies from other countries on trans-national business. However, the

arrival of new worldwide chief executive Bob Seltzer could conceivably

usher in a change of direction.



Overall the mood of owned groups across Europe is positive. Given the

improved market circumstances and the upsurge in lucrative cross-border

briefs, owned group heads could be forgiven for whistling the EU’s

anthem on a daily basis - Beethoven’s Ode to Joy.



Rowland Worldwide was unable to provide figures for the 1997 ’owned

group’ league table or the individual country ranking of agencies due to

the demerger by its parent company Cordiant of Saatchi and Saatchi and

Bates Worldwide



Fleishman-Hillard Europe has increased inter-office business by 50 per

cent in 1996 as a result of global briefs such as the Imation

account.



Burson-Marsteller took its total of European offices up to 22 with the

purchase of a majority stake in Swiss agency Jaggi this year.



Owned Groups

Rk Company                     Fee income             %   Staff

                                (pounds)         Change

                               96           95

1  Euro RSCG Intl

   Comms (ERIC)        45,281,000          **-        -     683

2  Porter Novelli                                           

   International       41,054,000   40,355,000        2     618

3  Burson-Marsteller   40,813,000   35,412,000       15     504

4  Shandwick Europe    35,100,000   32,100,000        9     563

5  Hill and Knowlton   26,893,000   22,755,000       18     440

6  GCI Europe          10,833,200    8,434,000       28     180

7  The Grayling                                             

   Group                8,375,000    6,906,000       21     133

8  Trimedia                                                 

   International        8,160,000    7,880,000        4      82

9  Text 100             6,492,000    5,969,000        9     126

10  Fleishman-Hillard                                       

    Europe              5,231,623    4,757,193       10      75

11 Ketchum Public                                           

   Relations            4,824,800    4,159,392       16     121

12 Sanchis and                                              

   Asociados1           4,365,014    4,424,242       -1      51

13 Harvard Public                                           

   Relations            4,198,000    3,500,000       20      61

14 Ogilvy Adams and                                         

   Rinehart             2,759,000    2,677,000        3      36

15 Mathieu Thomas/                                          

   Herald               2,667,854    2,006,340       33      52

Rk Company              Clients     Associate   Location

                                    Income 96

1  Euro RSCG Intl       

   Comms (ERIC)             729             -   London

2  Porter Novelli       

   International            398    11,000,000   Oxon

3  Burson-Marsteller        898       497,000   London

4  Shandwick Europe         904     9,700,000   London

5  Hill and Knowlton        676             -   London

6  GCI Europe               191     8,224,000   Paris

7  The Grayling         

   Group                    186     9,621,000   London

8  Trimedia             

   International             94            -    Zurich

9  Text 100                  83             -   London

10  Fleishman-Hillard   

    Europe                  159     1,151,958   Paris

11 Ketchum Public       

   Relations                187     2,811,000   London

12 Sanchis and          

   Asociados1                91             -   Madrid

13 Harvard Public       

   Relations                 68             -   Middlesex

14 Ogilvy Adams and     

   Rinehart                  33             -   New York

15 Mathieu Thomas/      

   Herald                    57             -   London

’Owned groups’ refers to consultancies with subsidiaries (greater than

50 per cent shareholding) in at least two EU countries. ’Associate’

refers to any company in which a group or network has a shareholding of

less than 50per cent, or which has some form of contractual or

partnership agreement.

** Figures unavailable 1 Subsidiary Common Sense sold in October 1996



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