We are constantly reminded by the media that we are living through a time of great change. With recession behind them, UK businesses are seeking new models to counter new challenges from emerging nations, technology continues to affect every aspect of our lives and concerns for the environment have reached new heights, resulting in an unprecedented level of talk about ‘ethical business’, ‘corporate responsibility’ and the like.
Design is part of this change. Like any other commercial sector it is affected by contemporary business issues, but in many instances it has been heralded as a solution to some of these broader business ills. Global expansion, meanwhile, has created the chance for some UK design groups to spread their wings in terms of client base or their own location.
It will be a while before these opportunities have a real effect on the fortunes of design businesses, but the promise is there. Packaging can be minimalised through design, for example, and products can be made more sustainable.
Meanwhile, other shifts in general business practice are causing design groups to rethink their strategies. The area most affected here is communications, with digital media in its various manifestations starting to rival print as a means of communication. It not only saves paper (as long as you don’t print everything out) – it can also reach customers and stakeholders instantly.
Some of these themes run through this year’s Top 100, which charts the fortunes of independent UK consultancies during 2006. There are significant changes this year on a scale we haven’t seen since, four years ago, US legislation – the Sarbanes-Oxley Act prompted by the Enron debacle – forced us to separate out consultancies owned by global marketing services networks such as WPP, Omnicom, InterPublic Group and Havas from the rest.
Brand experience giant Imagination is untouchable at the top of the listings, earning over £20m more in fees than its nearest rival. That rival, Leicester retail specialist Checkland Kindleysides, meanwhile dispels the myth that the high street is ailing and with it retail design groups, having improved its performance by 9 per cent year on year.
We see great strides being made by consultancies across the board, from branding and packaging to product and interiors, with digital design continuing to fulfil expectations of a revival for a sector that was hit hardest by the dotcom bust of 2001. We see some groups sadly wavering as they are not quite able to rise to new challenges – not many of these have been brave enough to put themselves under public scrutiny this year and have opted out of our trawl for data.
More importantly though, we see more new names coming through with about a third of consultancies listed making their Top 100 debut. This may make it difficult to compare performance year on year, but it gives a taster of the future, with thrusting newer groups entering the fray, several with strong creative credentials.
• No 1 – Brand experience giant Imagination with fee-income of £31.3m
• No 100 – Graphics group 300million with fee-income of £584 000
• Greatest growth in fee-income – Loewy with fees up 51%
• Biggest drop in fee-income – Retail specialist Lumsden Design Partnership with fees down 56%
• Total fee-income – £332.7m – up 10% year on year
• Total turnover – £493.32m – up 9% year on year
• Total staff – 4381, including 1946 UK-based designers and 182 overseas staff
HOW WE DID IT
The data included in the charts have been gleaned from a questionnaire, posted on the Design Week website and e-mailed to consultancies on our editorial database. All readers were invited to take part and to submit figures for the 12 months from January to December 2006.
We asked participants to submit figures that were audited or signed off by an independent auditor, as well as a consultancy director, as being in keeping with the company’s accounts.
The Top 100 chart is based on design fees billed through consultancies’ UK offices. These do not include earnings for print handling, property deals, direct marketing, contracting and the like. The ranking is a purely financial measure and takes no account of physical size or creativity, which we will assess in a separate Creative Survey supplement later in the year.
We rank some of the smaller specialist groups not big enough in terms of income to make it into the Top 100, but nonetheless important in their field, in the Specialisms charts covering various disciplines (pages 27 to 37). We also look at efficiency, based on fee-income per head of full-time staff. This doesn’t take account of freelance staff, but gives some indication of how the better-managed groups are faring.
All data has been verified and analysed by Amanda Merron at accountant Willott Kingston Smith. WKS has also compiled a separate chart for the big networks, basing it on the latest financial reports filed at Companies House (see page 55)