Abbott adverts dial up success

WINNING the pounds 50m BT account is far from a one-off achievement for David Abbott, the chairman and driving force at Abbott Mead Vickers. His agency went from strength to strength in the recession. While the advertising industry has been shrinking, AMV has continued to grow.

In the past two years it has won pounds 125m of new business - more than any other agency. This has propelled it from eight to five in the Register Meal ranking of advertising agencies, according to billings. With the BT account, the largest ever, it should become number three. Normally, an agency would only leapfrog up the rankings like this by buying a rival.

AMV responded to the recession in an unusual way: it consciously decided to fight a declining market by growing market share. It worked. Unlike other agencies, it has not had to shed staff.

In the three years to the end of 1992, a period in which the UK advertising industry cut 25 per cent of its workforce, AMV did not make a single redundancy.

It is one thing to say you are going to tackle a recession by increasing market share, quite another to do it. Michael Baulk, chief executive, attributes AMV's success to the agency's creative reputation - forged by Mr Abbott, a copywriter by trade - and having had 'the confidence to invest in people during a period when most of the industry was cutting costs as a way of managing itself through recession'.

Mr Abbott puts it elegantly and effectively: 'Do you remember the scene in the film Kramer vs Kramer when the Dustin Hoffman character is fired by his agency boss over lunch? After receiving the platitudes du jour, he folds his napkin and says quietly to his boss: 'Shame on you'.

'There are some managers in our industry who should be feeling shame too. With more thoughtful management in the Eighties, many of the redundancies of the Nineties could have been avoided.

'The alternative to thoughtful management is trial and error and, as a scrabble enthusiast, I'm aware that error is only one letter short of terror. I've also observed that where there's been management error, the terror is usually felt by the employees. Few chairmen fall on their swords because they've had to fire 500 people. Perhaps they should.'

AMV was founded in 1978 and went public in 1985. In March 1991 Omnicom, the US marketing and advertising giant, bought a 22.5 per cent stake for pounds 7.5m from WPP which it has since increased to 25 per cent, and it is an open secret that at some point it will buy the rest. It also merged one of its UK arms, BBDO, into AMV.

Mr Baulk is at pains to stress that throughout its life AMV's billings have grown at a fairly stable rate and that the company has not just put on a growth spurt. Its well-known ads include those for Sainsbury, which star personalities such as Sir Denis Healey giving Sainsbury recipes; the Economist magazine poster campaign; the Volvo campaign, emphasising safety; the Apple campaign featuring a tortoise mounting a helmet; and, perhaps best-known of all, the one for Yellow Pages featuring JR Hartley and his book on fly fishing.

A steady trickle of awards and his shock of white hair have earned Mr Abbott the nickname White God. A rival agency boss says this is down to his dominance of the agency. 'If he was not there, I am not quite sure what would happen.'

In hard numbers, creative flair translated into turnover of pounds 168m for 1992, the last financial year reported, compared with pounds 103m in 1988. Recession has taken its toll, however, on pre-tax profits. The agency reported pounds 4.72m in 1992, having peaked at pounds 5.85m in 1989.

According to Lorna Tilbian, an analyst at SG Warburg Securities, it should report pre- tax profits of pounds 5.5m when it reveals 1993's results in March, and pounds 7.75m for 1994. She guesses the BT campaign, which will run from April to April, is worth pounds 750,000 in pre-tax profits a year.

Although the shares are up about 30 per cent this year, she thinks they are still a buy. 'At the beginning of the year we thought it deserved a 30 per cent premium to the market, which was 660p, and having won this (BT account) - which could boost profits by 10 per cent - we think it is worth 725p,' she says.

Mr Baulk adds that winning the prestigious BT campaign should put the agency on a lot more pitch lists.

In anticipation, the share price soared to a new all-time high of 700p last week. There is also talk in the stock market that Omnicom has decided now is the time to buy the agency lock, stock and barrel - although some wise heads say it will wait until the shares are at less of a premium to its own on Wall Street. AMV, as shrewd a communicator as ever, says it never comments on market rumour or speculation.

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
filmPoldark production team claims innocence of viewers' ab frenzy
Life and Style
Google marks the 81st anniversary of the Loch Ness Monster's most famous photograph
techIt's the 81st anniversary of THAT iconic photograph
News
Katie Hopkins makes a living out of courting controversy
people
News
General Election
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Ashdown Group: Head of Client Services - City of London, Old Street

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders