successful agency in the industry.'' YELLOW PAGES, JOB ADS FUEL TMP

By Published on .

Andrew J. McKelvey is president of TMP Worldwide, a $500 million agency with 26 offices around the world. He has a lovely view of the Manhattan skyline from his midtown offices, and he's known as one of the most successful men in the industry.

Yet he hastens to dispel the notion that what he does is glamorous or even very creative.

"I know media people love great, dramatic stories," Mr. McKelvey said. "There's none of that here. TMP is not what you'd call hot."

Despite his protests, things are heating up at TMP, the leader in the relatively staid business of Yellow Pages advertising and the 18th-largest ad agency in the country. For the past 12 months, TMP has been on an aggressive acquisition binge, gobbling up eight agencies that specialize in recruitment.

That puts Mr. McKelvey well on the way to transforming two of the industry's most unsexy segments-Yellow Pages and classified ads-into a powerful advertising network. Mr. McKelvey said he plans to see TMP become a national recruitment force, and he even dreams about taking the company public someday.

"His is the least known, most successful agency in the industry," said Abe Jones, a principal in the Manhattan financial consultancy AdMedia Corp.

In its core Yellow Pages business, TMP commands 40% of the market. The agency has a solid national client roster that includes companies such as General Motors Corp., the Terminix Group of Cos., Midas-International Corp. and Ryder Truck Rental. Experts say the level of service involved in Yellow Pages is very similar to recruitment.

The expansion into recruitment advertising, Mr. McKelvey said, unites two areas of the ad business that are non-creative, low on ego and high on paperwork. Both businesses routinely deal with small ads that are distributed to thousands of media outlets.

Recruitment, or classified advertising, is an industry filled with many small, independent players, many of which lack the resources to compete in a marketplace dramatically changed by the recession. But by grafting them onto TMP's existing infrastructure, Mr. McKelvey hopes to create a network to rival the industry stalwart, Omnicom Group's Manhattan-based Bernard Hodes Inc.

So far, TMP has a commanding recruitment presence in eight U.S. cities. Last month, the company bought Manhattan-based Deutsch Shea & Evans, one of the industry's most prominent agencies, founded more than 50 years ago. Other acquisitions include Bentley, Barnes & Lynn in Chicago, Rogers & Associates in Santa Clara, Calif., and Merling Marx and Chavin & Lambert, both in Manhattan. The addition of those agencies has boosted TMP's recruitment billings to roughly $125 million and swelled its staff roster to 240 people.

"If I had to explain why we've been so successful, I'd say probably because both Yellow Pages and recruitment are businesses that are not very attractive to the consumer agencies," Mr. McKelvey said.

Industry observers note many consumer agencies that house recruitment divisions are now amenable to selling those businesses off because of their labor intensity and relatively low profit margins. Since the recession, independent recruitment specialists have also grown more interested in merging or selling. Changes within the industry have made it extremely difficult for most to succeed without supplementing their businesses with other services.

Recruitment ad agencies have always offered services outside their core business, such as creating brochures and other communication materials. In the past, such services made up only 15% of their revenue. Today, as companies tighten hiring practices and downsize with a vengeance, nearly half of an agency's total billings are likely to come from services outside their core business.

Many experts say the shifts in the nature of the business are precisely why TMP's concept makes so much sense. Many in the industry have already begun adjusting to the change, developing specialties in diversity training and corporate public relations matters.

Paul Austermuehle, president of Bentley, Barnes & Lynn, said TMP's advanced Yellow Pages technology has helped his agency find new revenue streams.

A longtime client of Bentley had been grappling, for example, with issues involving Clean Air Act compliance. The act requires many large companies to make reductions in the number of lone commuters coming to and from work during rush hour. Instead of a long manual survey of the client's employees, Mr. Austermuehle was able to tap into TMP's extensive mapping capabilities to outline comprehensive commuting options.

Ms. Gault is a reporter for Crain's New York Business.

Most Popular
In this article: