B-to-B clients have allowed savvy shops some stability

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Dot-com flameouts left many San Francisco agencies scrambling to collect unpaid fees and line up new, more stable business prospects. But a few tech-oriented shops resisted the urge to jump full-tilt onto the bandwagon and stayed the course with traditional b-to-b technology clients. While the marketers may not have the biggest budgets or the sexiest campaigns, they also are still in business at a time when many dot-coms are not. And tech shops are busy turning out the work.

SUCCESS IN B-TO-B

Among this crop of shops: Doremus, Publicis Technology Group and Leo Burnett Technology Group, all San Francisco; Bozell Silicon Valley, San Mateo; and JWT Technology, San Jose. These agencies and a few others may have had it right all along. Instead of reeling in every hot consumer dot-com that came along, they hunkered down and lured business in emerging growth segments that include broadband solutions and infrastructure, wireless service providers and b-to-b software applications that enable e-commerce.

"It's been clear to us where the market was going," said Alison Bain, president-CEO at Publicis Technology. "We always saw the opportunity in companies that were involved in technology infrastructure and b-to-b." While the agency counts among its clients some offline consumer brands that have moved online -- such as bricks-and-clicks retailer Garden Ridge, Whirlpool Corp. and Lancome -- the bulk of its accounts are Web-enabling tech companies. "Fortunately, we haven't been derailed by the consumer-focused problems other agencies have been experiencing," Ms. Bain said.

Bozell Silicon Valley projects yearend billings of $51 million, but also saw five dot-com clients depart. The biggest such loss: The $15 million account of InsWeb, an insurance site. The Bozell office is focused on luring more accounts like Rhythms NetConnections, a $15 million broadband client.

"We're seeing a major trend to anything that's [information technology] related," said Suzette Murray, partner-client services at Bozell.

JWT TECHNOLOGY

JWT Technology, owned by J. Walter Thompson Co., has focused on growing a stable of b-to-b tech clients with solid business models in emerging sectors. Accounts such as Agile Software, Epicentric, Network Appliance and NetScreen helped contribute to an estimated $80 million in billings at yearend. The office also could get some work from KPMG Consulting and Sun Microsystems, two new major, global clients for JWT.

"I think the [tech] industry has been accelerating all year toward a couple of key points -- profitability targets and integration -- both of which I think agencies are beginning to feel and will feel in 2001," said Russ Fujioka, president-CEO, JWT Technology.

Ms. Bain projects billings growth at her agency next year in the 20% range, mostly derived from b-to-b e-commerce and software accounts that also have their sights set on globalization. The agency will end the year with 120 people, up 50% from when it moved into a new loft space earlier this year.

Leo Burnett Technology Group is also experiencing growth. A relative newcomer to the San Francisco agency scene, the tech specialist -- part of Leo Burnett USA's TFA/Leo Burnett Technology Group -- will move its 35-person staff to new offices in the Jackson Square area by early 2001.

"We plan on doubling or tripling those numbers over the next year or two," said Robert Ahearn, president of the office. While Mr. Ahearn put TFA/Leo Burnett Technology Group's nationwide billings at $200 million for yearend, the Bay area office contributed $60 million of that with accounts such as Applied Material and Check Point Software Technologies.

CAREFUL POSITIONING

Regarding the dot-com shakeout, Mr. Ahearn said: "It affected the entire market, but one of the things we were really careful about was, we were not positioning ourselves as a dot-com agency."

"We felt it was a very volatile marketplace back in April 1999 when [TFA] first came out here," Mr. Ahearn said, adding, "Our strategy was to come in and go after more traditional tech clients."

Even so, Mr. Ahearn said TFA did pick up a couple of consumer dot-com clients, but declined to elaborate on the "ugly story" except to say: "Everybody got burned."

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