Adlistsum/Johnson/dt1st/mark2nd
Executive Summary
L.A.’s economic uptick has had a beneficial effect on L.A. ad agencies, as local companies that slashed their marketing budgets during hard times are looking to promote their products once again.
The 25 agencies on the list reported a total of $5.1 billion in billings for 1997, up from $4.7 billion reported for 1996 by last year’s top 25, and $4.3 billion in 1995.
Venice-based TBWA Chiat/Day remains L.A.’s largest ad agency, with 1997 billings of $925 million. TBWA Chiat/Day’s parent company, New York-based Omnicom Group Inc., owns three of the top five agencies on the list. Omnicom’s main competitor, Interpublic Group of Companies, also has three agencies on the list.
The Wall Street success of these two public companies, along with U.K.-based WPP Group, has made advertising stocks some of the most profitable on the market. In 1997, advertising stocks outperformed the market by 18.2 percent, according to Salomon Smith Barney. And since the market correction on Oct. 27, the main advertising stocks have gained an average of 25 percent, outpacing the S & P; 500 by 5.5 percent.
The Pacesetter
TBWA Chiat/Day is having a very good year. In January, it won the prized $90 million Levi’s account, and its campaign for Taco Bell featuring a talking Chihuahua has become a cultural phenomenon. In February, Adweek magazine named it the national agency of the year, and in March it won the same honor from Advertising Age.
Venice-based TBWA Chiat/Day, which will move into a converted warehouse in Playa del Rey in September, had 1997 billings of $925 million. The agency won $400 million in new contracts in 1997, including Taco Bell, The Weather Channel and ABC. Some of its other major clients include Apple Computers, Nissan and Sony PlayStation.
The Venice location is the headquarters of TBWA Chiat/Day’s North American operations, but the agency also has offices in New York and San Francisco and is considering opening a branch in Japan. Companywide 1997 billings were $1.6 billion. The agency was acquired three years ago by Omnicom Group Inc., a holding company that owns several prominent advertising agencies.
