Top agencies outside London seeing significant green shoots, but KPIs vary widely amongst regions
In the first of an RAR two-part series about agency finances to coincide with the publication of its Top 100 Agencies Outside London report, Diane Young of RAR highlights some of the key findings of the full report
RAR has published its Top 100 Agencies Outside London report
The completion of the full report on the Top 100 Agencies Outside London research has been a labour of love these past couple of months, with the emphasis on labour!
Since we conducted the research project in the closing months of 2012, we’ve been slicing and dicing the data and creating a new format which allows the industry, for the first time, to see a full report on the findings.
Having worked on the report for the last three years, I’ve been encouraged by the performance of the agencies that feature in the Top 100 and by some of the trends that have emerged. For the first time we’ve also done a regional analysis which has thrown up some interesting contrasts around the UK.
The turnover of the Top 100 was less in total than in the 2011 league table (£738m vs £809m) but as a group this year’s agencies achieved £110m growth (compared to the Top 100s from 2011 who achieved growth of £32m, and the 2010 group who had lost £44m of turnover between them). The data on these agencies indicates that the industry started improving in 2010 following a pretty dire 2009, with small growth of 4 per cent followed by a better 18 per cent.
The Top 100 agencies increased the number of staff they employed from 3862 in the previous year to 4340 in the latest year – a 12 per cent increase equivalent to 478 staff. Again this shows that these agencies are bullish in spite of prevailing economic conditions.
Gross profit growth also showed positives with an overall increase of £44m within the group. This compares to a growth of £17m amongst the 2011 Top 100 agencies. 93 of the agencies this year improved their gross profit.
In order that the Top 100 is not just about the biggest agencies, we include a ranking for percentage growth in turnover. This allows agencies that have achieved significant growth in relation to their previous size to be recognised, even if they are small. Performances ranged from a loss of 16 per cent turnover to an increase of 145 per cent. 92 agencies achieved sales growth.
When it came to the regional analysis, the dominance of several large agencies came into play, namely Mediacom and WRG in the north west and Brightsource and Bray Leino in the south west. In the north east, the massive growth of TH_NK dominated the turnover growth.
The regional variation was huge, with average turnover growth varying by a factor of 3.7 from £319K in the north west to a meagre £86K in the east of England.
The regional variation in staff per agency was stark, with the south west agencies employing 63 staff on average compared to 24 per agency in the east Midlands, and the east of England not much higher. The turnover per head of staff also was illuminating with the north west and south west well ahead of other regions due to the big agencies included in the Top 100. The lowest turnovers per head of staff were in the east of England, the south east and Scotland.
So overall, an encouraging picture emerged, but one in which different parts of the country achieve very different performances.
The second part of the series will be an interview about the importance of agency finances to clients with Bob Willot, publisher of Fintellect.