And, although the Boston-based agency's soft-spoken 39-year-old chairman, Michael Bronner, says he's in no rush to become the latest in a long line of stand-alones to get while the getting is good, industry observers expect Bronner -- labeled by one analyst as "probably the most sought-after property right now" -- to be gobbled up in the not-too-distant future.
When and if that time comes, WPP Group is seen as the most likely buyer, in part because of a compatible client mix. But it won't be the only bidder; rivals and potential parents expect Bronner to command a premium price of at least $150 million to $200 million.
"They're really the Cadillac of the direct marketing industry," said Abe Jones, managing director at AdMedia Partners, an investment banker with a marketing communications speciality.
Nineteen-year-old Bronner is the third-largest direct agency in the U.S., according to Advertising Age data, with 1997 gross income of $100.6 million, a robust gain of 43.8% over the previous year. That puts it behind only Rapp Collins Worldwide, owned by Omnicom Group; and Wunderman Cato Johnson, owned by Young & Rubicam. In terms of direct response income, Bronner ranks above Interpublic Group of Cos.' Draft Worldwide, but full-service Draft is larger overall.
Bronner's gross income this year is expected to hit $135 million, according to CEO David Kenny.
`A UNIQUE ANIMAL'
"Our clients say it's a unique animal because it's the one place you can get a marketing agency, a technology company and a strategy firm and know the three pieces will work together to get the same result," Mr. Kenny said. "There isn't another animal that does it."
Rivals might take issue with that assessment, but clients offer a similar view.
"They're centrally involved in our business," said Gail McGovern, exec VP-consumer markets division at AT&T Corp., whose account makes up about a quarter of Bronner's billings. "Their infrastructure is so tied into our infrastructure that it's hard to tell where one firm starts and the other stops."
Bronner handles consumer and small-business marketing for AT&T.
Added John Hayes, exec VP-global branding and advertising at American Express Co.: "They are definitely a strategic partner. It's been a very productive relationship so far. What Bronner has done is worked across a number of our businesses . . . and what we do with them is work across multiple channels like direct mail, teleservices and Internet."
NOW IN CHARGE
Messrs. Bronner and Kenny are firmly at the helm of Bronner. Mr. Kenny, 36, joined the company as vice chairman in January 1997 after a decade at Boston-based Bain & Co. and took the CEO title that had been held by Mr. Bronner nine months later.
Mr. Bronner was just 20 when he started the agency in 1983 with partners Steve Hum-phrey, who retired last year, and Vice Chairman-Chief Creative Officer Mike Slosberg, who recently moved to New York to open a new office there. Mr. Bronner got his first taste of the business creating coupon booklets for local retailers while a pre-med student at Boston University. He later dropped out to develop a similar program for AmEx, which went on to become the direct shop's first client.
Bronner's current client list is a who's who of blue-chip marketers. In addition to AmEx and AT&T, the roster includes Bausch & Lomb, Eastman Kodak Co., Enron Corp., Federal Express Corp., General Motors Corp., Harcourt General, IBM Corp., Intel Corp., Kraft Foods, L.L. Bean Inc., Seagram Americas and Time Warner.
Mr. Bronner said much of the agency's growth last year came from existing clients. Bronner declined, according to Mr. Kenny, to participate in about 40 reviews last year because, he said, "either what they want to do doesn't fit our mission or we don't have the people to service that business."
Added Mr. Bronner: "One of the unique things about this culture is the intense focus on the client. It's not a desire to have a hundred clients, but a relatively small number so that we can help them manage their most valuable asset, their customers, across every interaction that company has with the customer."
Bronner's philosophy is one its chairman calls "experience-based branding."
"The brand is created more by customer experiences than by image advertising," he said. "If the promise is there and the delivery is not, the brand can be destroyed. You can have 50 great spots for AT&T and one bad phone call. Which has a greater impact on the brand?"
FROM 80 TO 800 EMPLOYEES
It's a philosophy clients obviously are buying into. Since 1990, Bronner has grown from 80 employees to 800. Earlier this year, it opened the New York office primarily to service AmEx and staffed it with about 70 people, many shipped down from Boston.
The office -- which also houses a new event sponsorship and promotions group -- is an experiment to see if the agency's culture and capabilities can be replicated.
Bronner has earned respect from rivals such as Draft Worldwide; CEO Howard Draft said Mr. Bronner is "fun to compete with."
"He's done some wonderful things for the business," said Mr. Draft, whose agency handles business-to-business for AmEx, while Bronner has relationship marketing for consumer business and is interactive agency of record for AmEx. "They approach their clients as partners, focusing on a philosophy of a small number of big accounts just like us."
But it is potential buyers that seem to pay closest attention to one of the direct industry's last remaining independents.
MEETINGS WITH SORRELL, GEIER
The agency has "taken calls from everyone," Mr. Kenny said, and "politely taken some meetings with people," including WPP Chairman Martin Sorrell and Interpublic Chairman-CEO Philip H. Geier.
Mr. Sorrell said he hasn't had "very significant chats with them," but acknowledges, "if they thought it was a good idea, obviously we'd talk to them."
Mr. Geier, who acquired Draft two years ago, calls Mr. Bronner "a very professional competitor in the direct response business" but wouldn't comment beyond that.
Bronner had serious discussions with Interpublic's McCann-Erickson Worldwide three years ago about forming a joint venture around GM business, but those talks collapsed.
"Michael is a real talent, and he has a very strong agency. When you have a quality agency, you're going to be approached," said John Dooner, chairman-CEO of McCann. "He's an asset any number of communications companies would like to have in their stable, including ours."
WPP WOULD BE GOOD FIT
Of the leading holding companies, the closest fit seems to be with WPP, which also counts AmEx, AT&T and IBM Corp. among its shops' key clients.
Being part of a leading holding company would provide Bronner the resources to continue to be a player in a global marketplace.
Mr. Bronner has "a solid organization with very heavyweight thinkers," said the head of one direct agency. "He needs the global reach and media strength. He's working with accounts that need to be global. He's going to have to either acquire country by country or be acquired."
While admitting clients are "really pushing us" to go global, Mr. Bronner insists he's in no rush to cut a deal -- a stance that probably makes the agency more valuable to acquisition-minded players.
He said the agency is analyzing from now through September how to best serve global clients and aims to implement its plan by next year.
"I don't want to rule out partnering or acquiring firms overseas. That's very possible," he said.
"We believe that remaining independent right now is in the best interest of our clients and the best interest of our people," Mr. Bronner added. "We've never been in this business just for the money. It's more about clients and people. But if you are serving your clients well and attract the best people to do that, then you are naturally profitable."
And naturally desirable.
Contributing: Mercedes M. Cardona