ON the face of it, design fee income is down for our Top 100 consultancies this year, from the 361m reported in our 1996 trawl to 275m. Similarly, turnover appears to have dropped remarkably from 744m to 397m. But this doesn’t mean that business is failing. On the contrary, both fee income and efficiency (based on the level of fees per staff member) are up some 19 per cent on last year’s survey figures and confidence about the future remains as high as last year. It is just that we have refined the entry criteria for groups in the Top 100 chart opposite, basing it on design fees earned by consultancies’ UK offices and not including fees generated by overseas offices.
The ten biggest international concerns have their total earnings recorded in a separate listing on page 53 and a couple of the supergroups appearing there – notably Landor and Imagination – have opted not to take part in the main chart. When you consider that Landor topped the 1996 chart with fee income of 32m and that fees of 12.72m on turnover of 39.09m put Imagination in fifth position last year, you start to see where the differences lie – and why there have been a few shifts in position by those consultancies that have taken part.
Take Fitch’s Anglo-American business, which reported total fee income of just over 12m in last year’s survey and stood in sixth place. This year its UK fee income of 4.7m puts it in tenth place in the Top 100 chart, though it ranks seventh as a global business.
More telling is the progress groups in the Top 100 made last year in building their business. This year’s chart-topper, the massive Cambridge Consultants, for example, far exceeded the 15 per cent growth it projected last year, recording a 35 per cent rise in design fees from 15m in 1995 to 20.3m last year. Similarly, identity specialist Wolff Olins rises to third place, notching up a 23 per cent rise in fees from 7.18m in 1995 to 8.83m last year when it forecast only an 11 per cent increase in the 1996 survey.
On the interiors front, the highest ranking group, BDG/McColl (8), reports design fees up almost 11 per cent, from 5.5m last year to 6.1m this – a very good sign that health is returning to the property world at last.
Interestingly, though, product design has remained fairly static over the past 12 months. If you look at PSD Associates (65) and Seymour Powell (joint 67), for example, you’ll find that they have maintained the fee levels of around 1.5m apiece they reported last year.
Seymour Powell anticipated this year’s figures, forecasting no major change in its circumstances, but PSD predicted a bullish 30 per cent growth during 1996. It will be interesting to see how it fares with its projection of 20 per cent growth by the end of this year.
In branding, major players such as Coley Porter Bell (5), Design Bridge (joint 6) and PI Design International (17) continue to grow apace, all improving slightly on 1995 fees of 6m, 5.89m and 3.51m respectively.
On staffing, design teams are bigger overall – an encouraging sign to designers on the lookout for work. The groups in last year’s Top 100 charts employed 3062 designers out of 6384 total staff. This year the 100 employ slightly fewer people, the total of 5724 being reduced significantly by the exclusion of Landor and Imagination, which last year reported payrolls of 329 and 266 respectively, and show global staff of 465 and 219 on this year’s international chart (page 53). But the proportion of designers is higher – 4027 even without Landor and Imagination’s complement.
The highest new entrant is WPP’s global identity network, Enterprise Identity Group, weighing in at second place with 15m in fees generated by its London office. That group, in fact, comprises the identity side of Sampson Tyrrell Enterprise’s business, alongside WPP stablemates Anspach Grossman Enterprise, SBG Partners, Artistry and O&M Identity. The group is born of WPP boss Martin Sorrell’s vision which identified a market for a global identity business.
As you scan down the charts, you find Sampson Tyrrell Corporate Marketing (joint 56) with its own entry and 12 staff generating a respectable 1.8m in design fees. This is the non-identity side of the London business, concentrating on annual reports, financial literature, corporate brochures and multimedia.
The other biggish newcomer is Rodney Fitch Design Consultants, in at 53 with fees of 1.88m. It is the first time the multidisciplinary consultancy, set up two years ago by Rodney Fitch with substantial backing from Richard Branson’s Virgin Group, has responded to the survey, so we cannot chart its development. But it is reported to have a heavy workload from non-Virgin companies, notably in the Far East, where it is planning to set up offices (DW 21 February).
Rodney Fitch Design Consultants’ new stablemate, branding consultancy Wickens Tutt Southgate (joint 34), dropped eight staff and 500 000 in fees last year compared with 1995. It is looking to stabilise this year.
Though propping up the chart, graphics group Roundel Design (100) is by far the most optimistic consultancy this year, predicting 70 per cent growth in its business. But apart from a handful of others – notably new company e-fact (joint 27), retail specialist 20/20 Design Consultants (45), Lloyd Ferguson Hawkins (60), Graphique (61), Blue Marlin (76) and Gyrographic Communications (99) – most groups are looking to increases of 10 or 20 per cent. No mean feat. With a boost in efficiency this year, we can be more confident than in previous years that those targets will be met as design starts to mature as an industry.