Crain’s reports: Viva La Brand Revenues Climb as a Result of Marketing Programs that Deliver Results

In the market for some help
Companies’ bottom lines are stronger, which gives boost to marketing firms

By MICHELLE PARK, Crain’s Reporter

Many Northeast Ohio communications firms have enjoyed double-digit revenue growth in early 2013 and are hiring to keep up as they say companies emerge from hibernation to do the marketing they’ve put on ice for years.

Revenues for Falls Communications in Cleveland were up 33.5% in the first quarter over the year-ago period, growth that president and CEO Rob Falls attributes to economic improvement and the close of the presidential election. There are always companies that, in a downturn, cut marketing to some degree, he said.

“Now they’re trying to play catch-up, to have a larger voice in the marketplace,” Mr. Falls said.

More than half of Falls’ 50 or so clients are boosting their marketing spend — many of them dramatically — and new clientele are driving the increase, too, according to Mr. Falls. He said his firm’s revenues also grew more than 20% during all of 2012 from 2011.

Falls employed 48 as of June 2012, up 41% from 34 in June 2011, according to Crain’s Book of Lists, and Mr. Falls expects to grow to 60 employees by year-end.

Akhia Public Relations & Marketing Communications in Hudson also is hiring. It stands at 56 people today, up from 45 in June 2012, and it’s hiring social media experts, account managers and writers who can help Akhia meet the demand for content marketing, said president Jan Gusich.

“Their (companies’) sales are finally recovering,” she said. “Companies are starting to invest again in their marketing programs. It’s not a secret that the last couple years have been tough, and things were starting to get better, but companies were still being careful. I think the floodgate’s been opened.”

Akhia’s first-quarter revenues were up 16% from the like period in 2012, mostly because of higher spending by existing customers, and its sales for 2012 were double those in 2011, according to Ms. Gusich.

Alongside content marketing, digital is Akhia’s “other area of great growth,” she said.

The same is true for Roop & Co., a Cleveland communications firm that this year posted the best first quarter in its 17-year history, said Jim Roop, president. The eight-person firm, with gross income up 20% over the year-ago period, is in the process of building more than 10 websites for clients, plus “the social media thing has exploded,” Mr. Roop said.

Crisis communications firm Hennes Paynter Communications, too, has done three times as many media training sessions and crisis communications plans over the last 12 months than it did in each of the previous few years, said Bruce Hennes, managing partner.

Content is king
While more companies want marketing, they don’t want to hire internally to get it done, according to what Jeff Staats is hearing.

“There’s a demand from companies for agency help,” said Mr. Staats, president of the Cleveland chapter of the American Marketing Association, which has about 235 members.

Chas Withers, president and chief operating officer at Dix & Eaton in Cleveland, said his firm is experiencing a “very crisp” uptick in business early this year. He agreed that clients “want insight and knowledge, but they don’t want to hire for it.”

“I see a far greater reticence about adding back headcount than I’ve seen in some time,” Mr. Withers said.

While experts in the field say the clients that are spending more on marketing run the gamut, some sectors seem to be back in force.

Business-to-business companies — particularly professional service providers and old-line manufacturing and industrial companies — are clamoring to make themselves heard via social media and content marketing, as are home and building products companies, given the housing market’s improvement, insiders say.

“B2B is catching up really quickly,” Mr. Withers said. “I think companies are realizing they would be highly conspicuous by their absence.”

Marketing firms’ growing revenues also reflect clients’ desire to overhaul or refresh their websites, particularly with content, and to increase their exposure in the mobile phone marketplace, many said.

“This area of the business (content marketing) is exploding,” Akhia’s Ms. Gusich said. “People are realizing they have to have content. You can’t just have a static website. Search engines are smart today. They’re looking for genuine, authentic, technical types of content that will be valued.”

Quick results sought
Although it has had a working relationship with Viva La Brand for three years, Solon’s CardPak Inc. nearly has doubled its spending with the Beachwood marketing firm, largely to give a call-to-action feel to its website, which relaunched last November, said Seth Duckworth, vice president of sales and marketing of the maker of paperboard packaging. Since the revamp, the company’s number of online leads is up fivefold, he estimated.

Mr. Duckworth isn’t surprised to hear that demand for marketing is up among manufacturers. Competition in the sector is high, and manufacturing firms, especially those that have cut back, don’t tend to have in-house marketing expertise, he said.

Overall, Viva La Brand’s revenues to date are up 25% over last year, and the firm is turning down work, said president Laura Sheridan.

“Companies are hungry for marketing programs that measurably increase revenue,” she wrote in an email.

Jonathan Ebenstein also sees a keener scrutiny of results.

“What we’re seeing now as companies are coming out of hibernation is they’re still a little skittish on where they want to spend their marketing dollars,” said Mr. Ebenstein, managing director of Skoda Minotti Strategic Marketing in Mayfield Village.

The group, which does marketing for the Skoda Minotti accounting firm and other providers of professional services, started to see its pipeline grow meaningfully in the middle of 2012, according to Mr. Ebenstein, who said clients want initiatives that produce quick results, such as customer acquisition.

“They’re not spending the way they did before” the downturn, he said. “It’s got to be trackable.”

Back on the offensive
The increased marketing spending will continue, local executives anticipate. New technologies necessitate upgrades, Mr. Ebenstein said, and so many companies have done so little investing for a long time.

“They need to stay competitive, and business owners are realizing that,” he said.

Veronis Suhler Stevenson, a private investment firm that targets companies in the education, information, communications and business services sectors in North America and Europe, echoes their optimism.

In its 2012-2016 forecast, the firm projected the communications industry will grow at a 5.2% compound annual rate to $1.46 trillion by 2016 — almost two times the growth rate during the past five years.

And a recent Nielsen study has found 63% of brand advertisers expect more money to be spent on brand marketing in 2013, much of it toward social media and mobile advertising.

All of it spells a stronger economy, Mr. Withers said.

“The first thing to go when the economy turns down often times is marketing budgets,” he said. “The fact that companies are very aggressively looking at new programs, saying (they) need to diversify how we’re picking up new customers, all of those are signs that companies are playing offense instead of defense.”

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