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Fueled largely by interactive and direct marketing, job growth returned to the nation's big ad agencies over the last 12 months, but mostly at the consolidated level.

Employment within consolidated agency operations of the top 30 agencies grew 7% in the twelve months to October 1996, about the same rate as the entire U.S. agency business. A year ago, when only the top 20 agencies were tracked, growth inched ahead by only 0.6%, lagging total agency growth of about 7%, according to the Bureau of Labors Statistics (see footnote to chart at right).

The annual Advertising Age report, a ranking of leading agencies by employment at their core shops, knighted DDB Needham Worldwide as the largest core agency at 2,066 employees, unseating Leo Burnett Co. at 2,057.


Burnett, core leader through the '90s, slipped 0.4% in core employment, although the agency gained 7.3% on the consolidated side from growth at subsidiaries, Capps Studio, Giant Step Productions and Studio Associates.

The core is the agency brand and consists largely of general advertising shops bearing the agency name. Consolidated agency totals include the core and the agency's string of subsidiaries.

Ad Age expanded the survey to 30 this year for several reasons: The size difference between the Nos. 20 and 30 is relatively minor; the larger number of agencies approximates a quarter of the nation's agency employment, a critical mass that helps gauge employment shifts in this top-heavy industry.

The fastest-growing agencies in '96 reported big gains in new-media and direct-marketing staffers. At Bozell, Jacobs, Kenyon & Eckhart, where employment grew 20.1%-the biggest spurt among the top 10 consolidated-240 of approximately 500 new jobs came from interactive and business-to-business agency Poppe Tyson. Poppe formed new-media subsidiary, and with help from acquisitions more than doubled its staff to 420.


BJK&E includes Poppe Tyson; Dugan/Farley Communications; Sweeney Group; Temerlin McClain; Bozell, Sawyer, Miller Group; and core agency Bozell Worldwide. Bozell core grew 9.8% in employment, one of the strongest performances.

"Although Poppe was definitely the big driver," says Ken Gard, exec VP-secretary/treasurer, BJK&E, Omaha, Neb., "Bozell New York, with new business gains including Bell Atlantic Nynex Mobile and Bristol-Myers Squibb, also contributed."

The only other agency in which the core bears a different name from parent is No. 4 Foote, Cone & Belding, whose consolidated totals are those of parent True North Communications.


At McCann-Erickson Worldwide, FCB and Grey Advertising, substantial job growth came from non-core operations including direct and interactive units. Nearly two-thirds of McCann's 18.7% staff gain followed the acquisition last fall of 200-person Anderson & Lembke, a high-tech business marketing agency. Much of the rest came from sports marketing, direct marketing and health care.

Consolidated employment at FCB jumped 16.8%, with big growth in TN Technologies and FCB Direct. If TN Technologies' recent purchase of Modem Media were to be factored into the numbers, FCB's total employment would leap more than 20% over lasyear's tally.

Grey Advertising's fastest-growing unit was PR agency GCI Group, followed by Grey Direct and Grey Interactive.

In contrast to growth in non-core units, core advertising employment at the top 30 agencies showed only a modest uptick, growing 2.5% through October.

Though many of the top agencies claimed robust billings growth, few were willing to translate that into new jobs.

Seven of the top 10 agencies reported core employment growth of 5% or less. Two of the three topping 5%- Young & Rubicam and BBDO Worldwide-reported sharp declines in jobs the year before. Each won sizable new billings in December '95: Colgate-Palmolive Co. consolidated nearly all its brand advertising at Y&R; Bayer A.G. did the same for its Bayer product line at BBDO.


Direct marketing enhanced agency roster growth regardless of agency size. Outside the top 10, it contributed substantially to growth at Lowe Group, Ammirati Puris Lintas and Arnold Communications. All reported hiring increases in direct marketing.

Agencies with shrinking payrolls included Saatchi & Saatchi Advertising, Wells Rich Greene BDDP and N.W. Ayer & Partners, all hit by account losses and financial woes at the ownership level. WRG BDDP and Ayer recently acquired new owners who may look to make further cuts in trying to shore up the agencies' profitability.

Recruiters called the current job environment a seller's market, with agencies struggling to find qualified talent in several key areas, particularly at middle and senior levels.

"Good people are interviewing with more than one company and have more than one offer to consider," says Jack Fristoe, president, Fristoe & Carleton, Hudson, Ohio, a recruiter that works South and Midwest shops.

Mr. Fristoe says the slow pace of entry-level hiring in the early-to-mid 1990s has made finding people with three to five years of experience especially tough.

New York agencies are having trouble filling senior positions. Several have spent much of this year looking for head creative directors. Neither Y&R nor Ayer has filled the post, and DMB&B recently gave up its external search, filling the CD post from inside.


The explosive growth in direct and new-media marketing has changed the rules of agencies' recruiting, too, especially in account management.

"We have always recruited generalists, and `generalist' nowadays has taken on a whole new meaning" with the growing importance of specialized marketing tools, says Steve Sjoblad, president of Fallon McElligott Berlin, New York. "Account execs have to be conversant about more today."

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