Marketing, PR Firms Grow Despite Industry Changes

Despite a faltering economy, many San Fernando Valley advertising, public relations and marketing firms are growing amid a changing media market that is increasingly moving online. ValueClick Inc., an online marketing firm based in Westlake Village, added 22 employees in the greater Valley this year for a total of 225, earning it the No. 1 spot on the San Fernando Valley Business Journal’s list. The company saw revenues inch up slightly to $431 million in 2010, up 2 percent from 2009, according to data submitted by the firm. This year it expects revenues to top $500 million. “The online advertising space continues to grow,” said CEO Jim Zarley. “We have had quite a few new hires for at least the past year.” Van Nuys-based Icon Media Direct Inc. has adapted to the changing media environment by using its print and television ads “as a catalyst for driving online sales for companies across the country,” and by scooping up excess media time at discounted rates, said CEO Nancy Lazkani. The company was the Valley’s second largest advertising, public relations or marketing firm when ranked by employees in the area, according to data submitted by the firm. The company, which specializes in planning and buying television and print ads, saw its employee count in the Valley rise from 85 in 2010 to 90 this year. Revenue grew nearly 10 percent this year compared with last year, Lazkani said, although she declined to be more specific. The Internet has “has grown exponentially over the last three years,” said Lazkani, whose firm counts TeleBrands – the “As Seen On TV” company – as a major client. Today, customer orders are now mostly done online instead of by phone, she said. Online advertising is a bright spot in the otherwise grim U.S. economy. Online ad spending grew 23% in the first half of this year totaling nearly $15 billion, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers. “Despite the slow economy, online advertising is benefiting from a shift in media as more consumers spend more of their time online,” said Doreen Shanahan, professor of marketing at Pepperdine University’s Graziado School of Business. “It’s all driven by the changing technology, smart-phones and tablet computers,” she said, in addition to social media. Search advertising is still king in the online world with nearly 50% of total spending, but other areas within online advertising are growing fast, including online video advertising, which saw $1.42 billion in spending in 2010, according to researcher eMarketer, and is expected to grow to $7.11 billion by 2015. Demand for banner advertising remains solid with $6.23 billion spent in 2010, a figure that eMarketer expects will jump to $11.7 billion by 2015. By contrast, e-mail marketing is on the decline. Much of the increase in online advertising is at the expense of traditional media. Even as online advertising grew, traditional media budgets have remained stagnant, said Shanahan. According to the most recent Nielsen report, traditional media budgets were expected to decline in 2011 to $121.3 billion from $125.7 billion in 2010 Other top companies on the List included Encino’s Inter/Media Group of Companies and Advertise.com, Inc. of Sherman Oaks. Inter/Media Group of Companies has 83 employees in the Valley, earning it the No. 3 spot. That’s up seven employees from last year, CEO Robert Yallen said. Revenue jumped 11 percent last year to $500 million when compared with 2009. This year, the company expects to see its revenue inch up slightly, despite a struggling economy, Yallen said. The marketing and media company has been able grow by increasing its online presence, and venturing into new businesses such as a service to deliver television ads directly through its own network. Having a balanced portfolio of clients that includes those that tend to do well in a down economy – gold sellers, for example – has also helped Inter/Media thrive in the Valley, Yallen said. Advertise.com added five employees in the Valley this year, earning the No. 4 spot with 40 workers. The Sherman Oaks firm provides online advertising, including pay-per-click search ads, banner ads and e-mail marketing. Edge Communications, Inc.— based in Encino – was the fifth largest Valley firm on the list, with 17 employees, although its revenue dipped 5 percent to $716,000 in 2010. Both Chatsworth’s Drizen-Dohs Corporate Communications, Inc. and SSA Public Relations in Sherman Oaks have 13 employees in the Valley, making the local firms the 6th and 7th largest, respectively. In Focus Advertising, with 11 employees in the Valley, was able to boost revenues by 20 percent last year to $15 million. The Agoura Hills company was eighth on the Journal’s list. CEO Jason Bender said he has a good “pulse” on the economy because he can see how consumers and clients are impacted through his company’s campaigns. “It does not seem the same as 2009 when the sky was falling,” Bender said. “People are more accustomed to the new reality.” Despite the growing online ad world, Bender said traditional media is still better for companies to build their brands, although In Focus has an online division. If the economy holds, which Bender expects it to, he plans to increase his workforce by 10-20 percent. Judy Temes contributed to this report. Download the 2011 SFV’s LARGEST ADVERTISING, PUBLIC RELATIONS, MARKETING FIRMS list (pdf)