Sales-centric Doner shows it can take on bigger game

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With its $100 million win over creative powerhouses Deutsch and Fallon for Six Flags Theme Parks, Southfield, Mich.-based independent Doner has arrived as a legitimate contender for large global accounts.

"A lot of our competitors don't even think about us when they compete against us," said Doner Chairman-CEO Alan Kalter. "It was a bit of a shock when we got hired for Six Flags."

The Six Flags account punctuated a relatively low volume new-business year for the agency, which, including the theme park operator, has so far added roughly $170 million to $225 million in billings from E.W. Scripps Co.'s Home & Garden TV, Kraftmaid Cabinetry, Carpet One and Outback Steakhouse media wins.

Mike Boyd, VP-marketing for Scripps' Home & Garden Television said Doner came to the table with more than just a winning strategic approach. "They also came into the pitch with a very strong point of view on the creative assignment we gave them."

This year, Mr. Kalter expects to be up slightly in its gross billings, now more than $1 billion, and gross income to rise 10% to 15% due to new-business and organic growth. While Doner this year was a bridesmaid in reviews for K-Mart, Midas, Meijer, Pennzoil and DuPont's global reviews, it is a finalist in the pitches for Travelocity, Royal Bank of Canada and one undisclosed account with combined billings of up to $130 million.

Petsmart ended its agency-of-record relationship with Doner late last year, though the agency is still doing project work for the retailer. Executives from the chain declined to comment.

Doner gets included on the short-lists of numerous agency reviews because of its independence, results orientation, entrepreneurial culture and strategic smarts and hard-working creative, according to several agency consultants.

incentive pays

Several consultants said they like the agency because it heavily weights compensation on incentive pay. "It allows us to put our money where our mouth is," said Barry Levine, Doner's chief financial officer. "It certainly says to a prospect what our goal is." While he wouldn't provide any figures, Mr. Levine said the overwhelming majority of contracts have incentive clauses and that a significant amount of revenue this year came from incentive pay.

"They're the other good agency in town," admitted Bill Ludwig, vice chairman-chief creative officer at Interpublic Group of Cos.' Campbell-Ewald, Warren, Mich. "Doner does consistently good work, especially in retail, and they're a very aggressive and competitive agency."

Things haven't always been so cozy for Doner.

Founded in 1937, by the late `80s, Doner, a regional agency with a handful of high-profile national accounts, was losing revenue. When founder Brod Doner died in 1990, the agency went through an identity crisis.

"There was a time where we slapped up a lot of ideas and then came up with strategy," said John DeCerchio, vice chairman-chief creative officer.

It took a devastating fire in Aug. 1996 that gutted the agency's Southfield office to truly force a change. "That would have been an ideal time to sell the agency," said Mr. Kalter. But instead Doner started going after bigger clients.

Outside of the top departmental leaders, most staffers were replaced and departments like media and direct marketing were completely reinvented with new hires. Today, Doner has 950 employees in Cleveland, Boston, Dallas, Toronto, Tampa, Newport Beach, Calif., and London, with more than half in the Southfield headquarters.

tested

The first test of the makeover was Doner's pitch and surprise win of the then $240 million Mazda account in 1997. "Prior to 1997, if you look at the kinds of pitches we were in, they tended to be regional brands and we knew we could not flourish as a regional brand agency," said Mr. Kalter. "Mazda was a watershed win that catapulted us into the national scene and Six Flags was our second watershed." Six Flags was won in September.

"We felt like they could translate our business issues and business concerns into very strong advertising," said Hank Salemi, senior VP-marketing at Six Flags. "We are not about winning awards, we're absolutely about clicking turnstiles in getting people into the parks."

In addition to Mazda's "Zoom, Zoom" campaign, the agency created Blockbuster Video's "Carl & Ray," Serta's sheep and La-Z-Boy ads.

In April 1999, the agency dropped the initials of its namesake. This past summer, the agency closed its co-headquarters in Baltimore, shedding three-fourths of its 74 staffers there and moving the rest to Michigan as a step toward more efficiency.

Since Doner's 1997 restructuring, the agency's compound annual growth rate for gross income was 14.07%, outpacing the growth of all combined agencies, according to Advertising Age estimates. Growth in gross income slowed from a 27.11% gain in 1998 to a low of 4.24% in 2001 when the economy slumped. Doner recovered in 2002, with gross income up 8.72% to $109.7 million. That year the agency shot into the top 20 agency brands at 17, up from 29 the year before.

As the agency's track record grows, it continues to get offers, but Mr. Kalter insists he won't go public or sell. "I'll never eat my words on that."

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