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The Specialists: What 14 Companies That Grew During the Recession Tell Us About Advertising

If you want your advertising business to grow during a recession, be small or be a specialist: That's the conclusion from Ad Age's ranking of agency companies for 2009, by revenue.

All the usual suspects -- behemoths like WPP (WPPGY), Omnicom (OMC), Publicis (PUB) and Interpublic (IPG) that offer an across-the board range of services to clients -- saw revenues decline during 2009. It's only when you get down to No. 11 on the list that you find a company that grew its business: Alliance Data Systems (ADS) saw revenue rise 4.7 percent to $514 million.

Ask 10 people on Madison Avenue what Dallas-based ADS actually does and you'll get a lot of blank looks. Much of its business revolves around running store credit cards, database marketing and analytics. (It also has an complicated off-balance sheet arrangement for selling its credit card receivables to a special purpose entity in which it retains an equity interest, according to page 32 of its annual report.)

In other words, unlike WPP or Omnicom, ADS is highly specialized and offers clients measurable data. Of the 50 companies on Ad Age's list, only 14 grew their business:

  1. Alliance Data Systems (ADS), $514m, 4.7%
  2. Photon Group (Sydney), $366m, 11%
  3. IBM Interactive, $322m, 8,7%
  4. Aspen Marketing Services, $225m, 6%
  5. Wieden & Kennedy, $209m, 2.4%
  6. Mosaic Sales Solutions, $207m, 4%
  7. Meredith Corp., $176m, 12.8%
  8. Marketing Store, $172m, 27.1%
  9. The Richards Group, $172m, 1.5%
  10. AKQA, $166, 17.7%
  11. Rosetta, $152m, 6.8%
  12. Cramer-Krasselt, $149m, 2.6%
  13. iCrossing, $137m, 1.1%
  14. GyroHSR, $128m, 1.4%
It's interesting to note that of those 14, only Wieden, C-K, Richards, iCrossing and AKQA are "name-brand" ad agencies in the business. Most of the others have niche models: Photon is a field marketing and digital agency. IBM is another digital agency.

Of course, there are caveats: Just because the big companies saw overall revenues decline doesn't mean every agency within them declined. Some of their business units doubtless saw growth like their smaller independent competition.

And a lot of the businesses that grew are small. When your revenues are $200 million or so, you only need one decent account win to move the needle. Also, many of these companies are not publicly traded, meaning they report their own numbers. (Which is a polite way of saying that some of them are probably lying.)

Nonetheless, the lesson for management here is that the most robust advertising businesses seem to be ones which offer clients data-rich specialized services that can't be cut even in a downturn.