Increased ad budgets, new media services drive agency growth

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To download a complete list of BtoB's Top Agencies, click this link. Sponsored by HSR.

B-to-b agencies experienced strong growth in 2006 as marketers increased ad budgets, introduced new products, launched ad campaigns and experimented with new media platforms.

Overall ad spending reached $149.60 billion last year, up 4.1% from 2005, according to a March report from TNS Media Intelligence.

Online advertising is making up a bigger piece of the pie, TNS reported. Internet ad spending comprised 6.5% of total ad spending last year, up from 5.8% in 2005, according to the report.

Most of the top shops featured in BtoB's Top Agencies report had double-digit revenue growth and added many new b-to-b clients. To support this growth, they opened new offices, added staff, introduced new service areas and expanded overseas.

"Business was good in 2006," said Rick Segal, CEO of HSR Business to Business, Cincinnati, which was named winner in the midsize agency category.

HSR won 11 new b-to-b clients in 2006 and grew its total revenue by 69%. It also expanded its Chicago office and acquired a Denver agency.

"Clients were aggressive in terms of asserting leadership in segments they already dominated, and they were also adventuresome in exploring new market opportunities," Segal said.

HSR clients USG Corp. and Eclipse Aviation launched ad campaigns to introduce new products, while machine toolmaker Makino established its thought leadership position through live seminars and webinars.

Online played an increasingly important role at b-to-b agencies last year, particularly as clients embraced new media such as online video, social networking, blogs and podcasts.

"We've gone from a landscape where two years ago, 90% of our work was offline, to today, where traditional makes up about 50% of our work," said Matt Ross, president of McCann Worldgroup San Francisco. McCann Worldgroup (based in New York) won the large agency category.

"We decided to be at the intersection of what traditional agencies can do and what pure-play digital shops can do—our work is very evenly balanced," Ross said.

For client Nortel Networks, which selected McCann as its agency of record last year, digital expertise was critical in winning the account.

"I talked to a number of other agencies, and I was astonished at how many of them were not all over the social networking dynamic," said CMO Lauren Flaherty, who led the agency review after coming on board at Nortel early last year. "McCann had the deepest talent in the mobile space, they brought the most digital expertise to the table and, hands down, they were a far cry above the rest of the landscape."

Virtually all of the campaigns created by McCann in 2006 had a heavy digital component, from Microsoft Corp.'s "People Ready Business" to Hitachi's "True Stories."

McCann used online video, viral marketing, mobile, blogs and social networking in these and other campaigns for b-to-b clients, as well as TV, print, outdoor and other traditional media.

Ogilvy North America, runner-up in the large agency category, also expanded its digital marketing services in 2006.

It launched [email protected], a digital and direct media planning and buying agency. It also acquired Leopard, a database marketing and sales enablement company.

"With b-to-b clients like IBM, Cisco, SAP and DHL, we have to be so much more creative with media," said Carla Hendra, co-CEO at Ogilvy North America.

Ogilvy also bulked up its emerging digital expertise through a strategic alliance with Technorati. The deal gives Ogilvy creatives, account executives and strategists the use of Technorati's "conversational marketing products," which are tools that gather and gauge what influential bloggers and communities of interest are saying about brands.

For Cisco, Ogilvy tapped into the technology community to let users tell their own stories about Cisco's "Human Network," using blogs, wikis and online video.

Large agencies weren't the only ones exploring new online approaches in 2006.

PJA Advertising+Marketing, runner-up in the small agency category, hired a social media director to lead the agency's development of Web 2.0 tools and applications. It also conducted a seminar in Japan for clients interested in using social media marketing in the U.S.

Another important trend for b-to-b marketers was establishing an emotional connection with the audience.

"The b-to-b space is typically pretty crowded," said John Osborn, president-CEO of BBDO New York, which received honorable mention in the large agency category.

"You have to have a compelling way to bring the story to life. There is a role and place for emotion to play in the messaging and delivery."

For client General Electric Co., BBDO created original delivery vehicles, such as "GE's One-Second Theater" for DVR users and "GE Imagination Theater," which ran on Time Warner Digital Cable's on-demand channel, to establish emotional connections with viewers by bringing them deeper into the story.

Global expansion was another big trend for b-to-b marketers in 2006.

Modem Media, interactive agency winner, expanded its presence in Europe and the Middle East to support its global Hewlett-Packard Co. account; Slack Barshinger, runner-up in the midsize agency category, joined the International Network of Business Agencies; and Mobium Creative Group, winner of the small agency category, saw a 20% increase in international clients and a 60% increase in global campaigns.

The following pages contain profiles of the leading agencies in four categories: large, midsize, small and interactive.

  Large Agencies Midsize Agencies Small Agencies Interactive Agencies
Winner McCann Erickson HSR Business to Business Mobium Group Modem Media
Runner-up Ogilvy North America Doremus PJA Advertising+Marketing OTOi
Honorable Mention BBDO New York Slack Barshinger Stein Rogan+Partners Digitas
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