Aegis Group

Profile from the 2007 Agency Report

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7 Aegis Group
Revenue ($ in millions)20062005% chg
Worldwide$1,825.8$1,577.615.7
U.S$489.4$446.19.7
Non-U.S.$1,336.4$1,131.518.1
Employees20062005% chg
Worldwide13,07510,77821.3
U.S.2,1582,0853.5
Non-U.S.10,9178,69325.6
Offices20062005% chg
Worldwide2852686.3
U.S.44432.3
Non-U.S.2412257.1
Notes: Publicly traded Aegis is a holding company with two segments, Aegis Media and Synovate, its market research unit. The holding company reported net income of $146.7 million in 2006, up 25.3%, on revenue of $1.83 billion, up 15.7%. Aegis Media, which includes two media specialist companies Carat and Vizeum, digital network Isobar, and out-of-home media unit Posterscope, had worldwide revenue of $1.09 billion, up 11.5%, some $243.8 million of that from the Americas (up 13.3%). Growth within Aegis Media has been driven by Isobar, which accounted for 20% of the segments revenue in 2006, up from 15% the prior year. Also growth in the segment was generated by 13 acquisitions in 2006, down from 29 in 2005. Aegis had adjusted net new billings gains of $192 million, according to Bear, Stearns & Co., placing Aegis third among the six holding companies tracked by Bear Stearns. Adjusted billings reduce media accounts to 25% of reported billings to more closely correlate with anticipated revenue. The adjusted net new billings translated to an expected annualized revenue gain of $23 million. Aegis returns were boosted in part by acquisitions. In Europe, Aegis bought Bookmark, a Netherlands digital agency; Creo Communications, a sponsorship agency in Norway, and Suddenly Stockholm, a digital media services agency in Sweden. The purchase of Mediapool in Estonia set the stage for the entry of Vizeum in the Baltics. Integrator was bought in South Africa and added to Posterscope, which launched in the U.S. under the rebranding of Outdoor Vision. Aegis also bought Control Media in Mexico, AgenciaClick, a Brazil digital agency, Ammo Marketing, a U.S. word-of-mouth marketing agency, gained full control of Carat China, and took 70% of New Voice Media in China. It invested in Mediaforce media agency in the Philippines which established Vizeum's presence there, and acquired events specialist Synergy in New Zealand. Aegis has been trying to hold French financier and Havas chairman, Vincent Bollore, at bay. Mr. Bollore, who has built his shareholding in Aegis to 29%, was turned down in his attempt to gain two board positions in May 2006, November 2006, and again in April 2007. Aegis has rejected his efforts because it believes Mr. Bollore's seats would be a conflict of interest since he controls a major competitor. Among management moves, Mainardo de Nardis, former global CEO at WPP's Mediaedge:cia, became CEO of Aegis' media operations in August 2006 and a director of the holding company. He oversees worldwide planning and buying activities at Carat, Isobar, Posterscope and Vizeum. He reports to Aegis CEO Robert Lerwill. Carat Americas CEO David Verklin, a fellow board member, reports to Mr. de Nardis. In 2007, Alicja Lesniak was named CFO to replace Jeremy Hicks, group CFO, who left the company April 1, 2007 to relocate in the U.S. Figures shown for the U.S. are actually for the Americas, although the U.S. portion is above 90% of that geographic segment.
Top executive: Robert Lerwill, global chmn & CEO
Headquarters: Aegis Group / 43-45 Portman Square, London, W1H 6LY / Phone: 44-20-7070-7700 / Fax: 44-20-7070-7800 / URL: www.aegisplc.com

An asterisk (*) indicates figures are Ad Age estimates.

Integrated marketing agencies
Ammo Marketing*
Agency totals
Revenue ($ in millions)20062005% chg
U.S.$5.2$3.548.6
Offices20062005% chg
U.S.110.0
Notes: Ammo, formed in 1999, calls its field of word-of-mouth marketing "strategic alternative marketing." Ammo was acquired in early 2006 by Isobar and is a standalone business unit supporting the network. Ammo has six offices in the U.S. in addition to its San Francisco headquarters. Julian Aldridge, president, is also the president of Freestyle Interactive.
Top executive: Julian Aldridge, pres
Headquarters: Ammo Marketing / 475 Brannan St., Ste. 410, San Francisco, Calif. 94107 / Phone: (415) 541-2720 / Fax: (415) 975-0848 / URL: www.ammomarketing.com


Carat Fusion*
Agency totals
Revenue ($ in millions)20062005% chg
U.S.$48.9$33.048.2
Notes: Carat Fusion, formerly Carat Interactive, is a digital and direct marketing agency. Headquartered in San Francisco, the agency has shops in Chicago, New York, Boston and Los Angeles. The switchover to the Carat Fusion name from Carat Interactive came in September 2005 when Carat combined or "fused" Carat Direct (an offline unit) with its interactive business. The merged units reflect a shifting media dynamic, says the agency, that includes more consumer engagement in media and an increasing focus by advertisers on quantifiable returns for their marketing spending. Jeff Thaler joined Carat Fusion in New York in 2006 as senior VP, director for program management, a new post. Previously, he had been with Omnicom's Tribal DDB, New York.
Top executive: Scott Sorokin, pres
Headquarters: Carat Fusion / 3 Park Ave. 25th Fl., New York, N.Y. 10016 / Phone: (212) 689-6800 / Fax: (212) 689-6005 / URL: www.caratfusion.com


Freestyle Interactive*
Agency totals
Revenue ($ in millions)20062005% chg
U.S.$8.0$5.448.1
Offices20062005% chg
U.S.110.0
Notes: Freestyle is a full-service digital marketing agency.
Top executive: Julian Aldridge, pres
Headquarters: Freestyle Interactive / 475 Brannan St. Ste. 410, San Francisco, Calif. 94107 / Phone: (415) 541-2710 / Fax: (415) 975-0848 / URL: www.freestyleinteractive.com


iProspect*
Agency totals
Revenue ($ in millions)20062005% chg
U.S.$34.4$23.248.1
Employees20062005% chg
U.S.1159916.2
Offices20062005% chg
U.S.110.0
Notes: IProspect, founded in 1996, is a search engine marketing firm and identifies itself as pioneering the practice of search engine marketing. IProspect expanded to San Francisco, setting up an office at mid-year 2006.
Top executive: Fredrick Marckini, CEO & founder
Headquarters: iProspect / 311 Arsenal St., Watertown, Mass. 02472 / Phone: (617) 923-7000 / Fax: (617) 923-7004 / URL: www.iprospect.com


Isobar*
Agency totals
Revenue ($ in millions)20062005% chg
Worldwide$218.0$147.048.3
U.S.$125.9$84.948.3
Non-U.S.$92.1$62.148.3
Employees20062005% chg
U.S.719NANA
Offices20062005% chg
U.S.550.0
Notes: Isobar is a global digital agency network employing 2,197 in 83 offices in 36 markets. Structure and culture at Isobar is to provide network structure to fully owned (by Aegis) agencies. In the U.S., the network includes Carat Fusion, Freestyle, iProspect, a search marketing firm, and Molecular, a specialist in transactional websites, and Ammo Marketing. Isobar's platform of international digital shops cover three areas: search, creative and transaction services. In 2006, Isobar acquired word-of-mouth agency Ammo Marketing, San Francisco. Isobar was created by Aegis in July 2004 to capture its interactive business. An estimated 58% of Isobar revenue in 2006 and 2005 was generated in North America. Isobar added Bookmark, Naarden, The Netherlands, to its network in 2006, and in February 2007 gained AgenciaClick, a 280-employee agency with offices in Sao Paulo, Rio de Janiero, Brasilia and Belo Horizonte.
Top executive: Nigel Morris, CEO
Headquarters: Isobar / Parker Tower, 43-49 Parker St., London, WC2B 5PS / Phone: 44-20-7405-1050 / URL: www.isobar.net


Molecular*
Agency totals
Revenue ($ in millions)20062005% chg
U.S.$29.4$19.848.5
Offices20062005% chg
U.S.31200.0
Notes: Molecular is a technology consulting firm that designs and builds internet based solutions. The agency was bought by Isobar in May 2005.
Top executive: Ralph Folz, CEO & co-founder
Headquarters: Molecular / 343 Arsenal St., Watertown, Mass. 02472 / Phone: (617) 218-6500 / Fax: (617) 218-6700 / URL: www.molecular.com


Velocity Sports & Entertainment
Agency totals
Revenue ($ in millions)20062005% chg
Worldwide$19.7$17.612.0
U.S.$19.0$17.111.2
Non-U.S.$0.7$0.536.2
Employees20062005% chg
Worldwide11710017.0
U.S.1129517.9
Non-U.S. 5 5 0.0
Offices20062005% chg
Worldwide7616.7
U.S.6520.0
Non-U.S.110.0
Top executive: Mike Reisman, principal
Headquarters: Velocity Sports & Entertainment / 230 East Ave., Norwalk, Conn. 06855-1923 / Phone: (203) 831-2000 / Fax: (203) 831-2300 / URL: www.teamvelocity.com


Media specialist agencies
Carat
Agency totals
Employees20062005% chg
Worldwide7,5165,47537.3
U.S.1,3961,3592.7
Non-U.S. 6,120 4,116 48.7
Offices20062005% chg
Worldwide1531464.8
U.S.22214.8
Non-U.S.1311254.8
Notes: Carat is a full-service communications agency offering media planning and buying, insight, multicultural, trade, branded entertainment, digital, brand experience, interactive and an array of diversified services. Carat Americas, run by CEO David Verklin, includes Carat USA, Carat Canada and Carat Latin America, Carat Brand Experience, MMA (Marketing Management Analytics), Copernicus, Velocity, Posterscope and the Isobar network of digital companies that include Carat Fusion, iProspect, Molecular, Freestyle and Ammo in the U.S. During 2006 Carat reported 38% of total billings allocated to diversified services, high among its competitors. The media specialists' clients vary from auto and travel to media, covering most industries across both C2B and B2B categories. Carat in early March 2007 laid off about 25 staffers in the U.S; this came after the loss of Pfizer Consumer Care, which became part of Johnson & Johnson near the end of 2006 and moved to Universal McCann.
Top executive: Mainardo de Nardis, CEO-Aegis Media; David Verklin, CEO-Carat Americas
US Headquarters: Carat / 3 Park Ave., 32nd Fl., New York, N.Y. 10016 / Phone: (212) 689-6800 / Fax: (212) 252-1250 / URL: www.carat.com
Headquarters: Carat / Parker Tower, 43-49 Parker St., London, WC2H 9EA / Phone: 44-20-7430-6000 / Fax: 44-20-7430-6319 / URL: www.carat.com



Vizeum
Notes: Aegis's Vizeum was formed in early 2003 in Europe to serve local and regional agencies whose clients compete with those of Carat. Vizeum launched in the U.S. in first quarter 2006. Vizeum's billings are projections for 2006 by Recma.
Top executive: Eric Drancourt / Martyn Rattle, CEO / cfo
Headquarters: Vizeum / Orion House, 5 Upper St. Martin's Lane, London, WC2H 9EA / Phone: 44-20-7395-0888 / Fax: 44-20-7497-1177 / URL: www.vizeum.com

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