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Valley Advertising, PR Firms Expand Services

Europe’s woes may be slowing global advertising spend, but that’s not stopping Valley advertising and public relations agencies from expanding their footprint and adding new services, especially in digital. Topping the San Fernando Valley Business Journal’s Largest Advertising and Public Relations Agencies List is Westlake Village-based-based ValueClick Inc., which saw employment climb 33 percent in the past year to 1,462. The company, with 227 local employees, expects second-quarter revenues to reach the high end of its previous estimate of $155 million to $160 million, which would represent a 25 percent increase, and earnings in range of $46 million to $48 million, which if realized would mean a 76 percent increase over the same period a year ago. Those gains are being driven largely by technology-enabled digital advertising such as the company’s Dotomi unit, which uses consumer purchase data to deliver display advertising specific to a customer’s unique interests. Purchased last summer, Dotomi is expected to contribute $135 million to revenues for the full year 2012, a growth of 50 percent over $90 million in 2011, company spokesman Gary Fuges said. Woodland Hills-based ReachLocal Inc. was the Valley’s second-largest firm with 1,800 employees and a staff of 160 in the Valley. The company that helps small and medium-sized businesses shift their advertising dollars online has seen huge volatility in its share price, but analysts believe the company’s international push will fuel revenue growth, and perhaps help the company, which went public in 2010, reach profitability this year. ReachLocal’s international expansion remains critical to that goal, said George Sutton, senior research analyst with Craig-Hallum Capital Group LLC. International business is growing 60 percent a year and accounts for 25 percent of current revenues, which were $104 million in the quarter ended March 31. The goal is to push that to 40 percent within two to three years, said Michael Kline, ReachLocal’s chief strategy officer and president of local commerce. To get there, the company is reaching even further into new international markets. Under a franchise agreement announced July 9, ReachLocal will expand into five Eastern European markets, including Slovakia, the Czech Republic, Hungary, Poland and Russia. The franchise agreement with Oxata SMB BV allows ReachLocal to deploy a sales force that already exists in the region without the risk of recruiting and training brand new employees, Kline said. Under a three-part deal, Oxata will pay ReachLocal for its digital marketing technology platform, and ReachLocal will provide Oxata with debt financing to expand; and finally, ReachLocal will retain the right to buy Oxata at a future date. Global advertising spend of $502 billion is growing at a rate of 4.3 percent this year, according to market research group Zenith Optimedia. The growth rate is a bit slower than the company’s previous projection, as it has been hurt by Europe’s financial crisis. In the 17-member Euro-zone, advertising spend is actually shrinking 1.1 percent a year, Zenith said. However, when it comes to online advertising, growth remains robust, especially in the emerging Eastern European markets, Zenith said, noting online advertising accounts for more than 50 percent of new ad spending. Valley public relations firms, meanwhile, are counting on the U.S. economic rebound to drive business this year. After watching its revenues slide by about 25 percent starting 2009, fifth-ranked JMPR Public Relations of Woodland Hills is now growing “hotter than a pistol,” in the words of President Joseph Molina. “I have not seen action like this in 10 years,” said the owner of the firm that specializes in helping luxury auto brands such as Bentley and Bugatti with their publicity efforts. Molina said requests for proposals are pouring in and that the firm is already ahead by four major clients this year, including Coker Tire, the largest supplier of collector car tires, Omix-Ada, a maker of replacement parts for Jeep, and Barrett-Jackson Auction Company, which organizes classic car shows. He said the new clients will add $600,000 to $700,000 in new revenues to the company’s 2011 figures of $1.985 million. “Maybe it’s just my niche, but I think people are rolling the dice and seeing the glass as half full this year,” Molina said, adding that personal relationships have once again become more important in landing new business. Forging personal relationships with clients also has helped Marketing Maven Public Relations Inc., No. 8 on the List. The firm, headed by 29-year-old Lindsey Carnett, said the firm doubled its fees to $501,000 in 2011 and is on track to grow 50 percent to $750,000 in revenue this year. With clients such as the Online Trading Academy and Ontario-based Babytrend.com, the Camarillo-based firm is adding three people to its staff of 10 this year and opening an office in New York. The firm is benefitting from its founder’s social media savvy. Marketing Maven helps Babytrend.com with its Facebook presence, writes blogs, produces short videos and runs online contests that drive consumer engagement with its clients’ products. “What we try to do is dominate the whole first page on Google,” Carnett said. Download the 2012 VALLEY’S LARGEST ADVERTISING and PUBLIC RELATIONS AGENCIES list (pdf)

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