There’s been a surge in the fortunes of the UK design industry over the past 12 months, with design fees up to 343m from 275m reported last year on turnover of 526m compared with 397m. And though identity and branding work account for some of this, the improvement is spread across the board of design disciplines.
Cambridge Consultants has fared particularly well and remained in top slot. It almost achieved the 20 per cent growth in design fees it predicted last year and has projected a bullish 20 per cent increase during 1998.
Hanging on to second place is WPP Group’s global corporate identity champion Enterprise Identity Group. The UK arm – essentially Sampson Tyrrell Enterprise – saw its fee-income and turnover up 30 per cent during 1997, double its projection.
It’s good to see Imagination back in third place after the absence of a year when its accounting system meant it couldn’t comply with our survey requirements. The massive gap between its healthy design fees of around 16.5m and turnover of almost 50m reflects the extent of its activities, literally as an all-singing, all-dancing marketing services group. In there also, we suspect, is at least some of the 7.6m it received from the New Millennium Experience Company for its aborted input into the Millennium Dome at Greenwich.
A couple of other key players in the top five have undergone major shifts in their business over the past 12 months. The first of these is Interbrand Newell and Sorrell, which announced its merger plan last October and is in the throes of implementing it. The figures submitted this year won’t fully reflect the potential of the combined group, given that they’ll be drawn largely from work the two had taken on separately. But if you compare them with this year’s figures for both Interbrand and Newell and Sorrell, you’ll see a big improvement nonetheless.
Newell and Sorrell ranked joint 13th in our 1997 chart, with fee-income of 4.4m on turnover of 7.4m. Interbrand’s UK business came in at 16th, reporting design fees of 4.2m on 5m turnover. The collective 12.5m in fees and 15.5m turnover given this year far outstrips that, while joint staff numbers are up from 136 last year to 182 this. With 20 per cent growth forecast for 1998, this is definitely one to watch on the business front. Let’s hope that Newell and Sorrell’s previous award-winning design prowess isn’t dulled in the process.
Wolff Olins, down to fifth from third place last year because of other groups’ moves, has had a boom year, despite the management buyout in June for 6-8m. Though it predicted zero growth during 1998, its fee-income is up a massive 25 per cent from last year’s 8.8m, while turnover is up almost 27 per cent from 12.7m to 16m. Diversification into advertising and multimedia appears to be paying off – and boosting overall staff numbers from 101 last year to 128 this. Wolff Olins is going for 25 per cent growth again this year. Watch this space.
A number of groups towards the top of the charts show combined figures with stablemates this year, following deals during 1997. It’s the second time The Brand Union (13th) has done this, though the first time under its new name. Combining the branding skills of Tutssels and the TV graphics expertise of Lambie-Nairn, it has shown remarkable 33 per cent growth over the past 12 months – which accounts for its rise from last year’s 19th slot – with a further 17.5 per cent predicted.
Then there are those odd bedfellows, Rodney Fitch & Co and Wickens Tutt Southgate. The two came together in December 1996 with backing from Richard Branson’s Virgin Group, but last year submitted separate figures. Rodney Fitch weighed in at 53rd last year, with fees of around 1.9m on turnover of 2.5m. WTS took the higher position of joint 34th, with design fees of 2.5m on turnover of 3.4.
By submitting a joint entry the duo have risen to 19th in the charts, but the combined fees of 3.9m and turnover of 4m are slightly down on last year. It’s hard to say where the decline lies, but it could have something to do with Rodney Fitch’s interests in Far Eastern clients where a buoyant market has fallen off.
The CLK.MPL grouping is also the result of a management buyout, this time from Princedale Group, with sister consultancy The Brand naming Company. CLK didn’t figure in the 1997 list, but MPL shared 34th slot with design fees of 2.5m on turnover of 4.5m. It predicted 10 per cent growth during 1998, but any improvement is masked by this year’s combined figure.
Another one to watch is The Coleman Group Worldwide, at 26th. It bought packaging specialist Planet, now Coleman Planet, last year. Planet was in at joint 34th in the 1997 Top 100 with design fees of 2.5m on turnover of 2.7m.
The Coleman Group is owned by Interpublic Group, which also owns New York corporate identity specialist Diefenbach Elkins (17th) and identity and interiors consultancy Davies Baron. Davies Baron now trades as Diefenbach Elkins Davies Baron (DW 27 February).
Groups in the Top 50 reporting the greatest growth this year include retail specialist 20/20, up from 45th last year to joint 34th with over 50 per cent improvement, and branding group Ziggurat, with which 20/20 shares 34th slot, up over 60 per cent and predicting a bullish 40 per cent growth. But one of the biggest movers is the multidisciplinary Conran Design Group (36th), up from 74th with over 130 per cent growth.
There’s a cautionary tale in the apparent decline in fortune of WPP Group branding arm Coley Porter Bell. CPB has dropped to 31st from last year’s fifth position, when it reported design fees of over 7m and an identical turnover, virtually halving its income. It attributes the fall to 4.1m on over-reliance on two clients, British Gas and Promodes, which it says “skewed” earlier figures. It maintains a healthier balance of clients has now been achieved, but the results of recent wins have yet to do anything to boost its figures.
CPB is optimistic about the next 12 months, despite this year’s hiccup, and its confidence is reflected throughout the industry. Quite a few groups are forecasting growth of over 25 per cent in 1998 and from the way things appear to have hotted up since Christmas, they’ve every chance of getting there.