CHICAGO (AdAge.com) -- Here's an interesting fact that might have escaped notice in Ad Age's Agency Report last week: Doner has been unseated as the independent agency with the most U.S. revenue.
It only squeaked by, but Richards Group still knocked the Southfield, Mich.-based shop off the pedestal it's held since 2004. Dallas-based Richards posted $166 million in U.S. revenue last year, compared with $164 million for Doner, according to the Agency Report.
Tale of the tape
A side-by-side look at Richards vs. Doner
|2007 INT'L REVENUE:||$0||$11 Million|
|MAJOR ACCOUNTS:||Home Depot, Red Lobster, Bridgestone- Firestone||Mazda, Expedia, ADT|
|NOTABLE 2007 WINS:||Orkin, Amstel Light||Ideacast, Pennzoil|
|NOTABLE 2007 LOSSES:||Hyundai, Comcast Business Services||Hotels.com, U.S. Cellular, La-Z-Boy, Sylvan Learning Centers|
|CEO'S TAKE:||"It's nice (to be the largest), but we never focus on size. I'll take good over big." -- Stan Richards||"Such is life. ... I'm very excited about our new team here." -- Alan Kalter|
The numbers do not include Doner's $11 million in international revenue (Richards has none), which would have kept it in the lead. But the figures nonetheless represent a surprising shift in a year where both shops struggled with major client defections.
"It was very gratifying that we were able to get through the year essentially flat, because it easily could have been a strong down year," said Richards principal Stan Richards.
The shop managed to eke out 3.8% revenue growth despite losing Hyundai Motor America -- one of its largest accounts -- as well as Sylvan Learning Centers and Comcast Business Services. Mr. Richards said account wins on Amstel Light and Orkin, as well as strong digital growth from existing clients such as Home Depot and Patron tequila, made the difference.
Doner's struggles were even more pronounced: It lost Hotels.com, U.S. Cellular and La-Z-Boy, although it did manage to win Pennzoil and IdeaCast. The shop remains best known for the "Zoom Zoom" campaign for its largest client, Mazda.
"Such is life," said Doner CEO Alan Kalter when asked about losing the top spot. "We had a number of challenges last year." Nevertheless, Mr. Kalter said a new management team at the agency, which includes a top creative wooed from Crispin Porter & Bogusky and a new media director from Starcom USA, is likely to improve the agency's fortunes.
He also noted that Doner remains the largest global independent when its international revenue is included. But that, too, might be fleeting. Wieden & Kennedy posted a 29% gain in international revenue last year to $75 million, pushing its global total to $165 million, just $10 million behind Doner.
The shop is best known for its Coke and Nike work, and also won CareerBuilder and Heineken last year in the U.S., but Wieden is likely to be further boosted abroad by new offices opening in Beijing and New Delhi this year.
In terms of U.S. revenue, the hardest-charging independent is Chicago-based Cramer-Krasselt, which grew domestic revenue more than 16% last year to $137.2 million, thanks partly to account wins such as Porsche, Zantac and Bissell.
C-K's revenue grew 42.3% since 2005, and if the trajectory holds, it would likely catch Richards and Doner within a few years, an oft-stated goal of the agency. Los Angeles-based RPA, the No. 4 U.S. independent, also posted double-digit revenue growth, rising 10% to $116 million.
But while the top-independent mantle would have once drawn holding-company suitors, today it's essentially just bragging rights. Holding-company CEOs generally regard U.S. ad agencies as overweight within their portfolios and have concentrated most of their attention on digital and overseas properties instead.
That's just fine with Messrs. Kalter and Richards, however, who along with other big independent CEOs say their shops are more integrated than most agencies because they don't have digital, media and promotional siblings and have always had to do that work themselves.
"(Larger) independents ought to have a leg up in this environment," said C-K CEO Peter Krivkovich. "We're all getting to the point where you have enormous resources, so [having success] is really just a question of vision."
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CORRECTION: An earlier version of this story incorrectly listed Sylvan Learning Centers under accounts lost by Richards Group. It was lost by Doner.