Concentric partner and COO Ken Begasse, Jr. describes 2008 as “pivotal.” The agency opened a London office, grew senior leadership and moved New York City headquarters to a new space. It successfully faced a multitude of challenges, including stalled launches, suspended budgets and mergers, and continued a five-year roll of double-digit growth, ending the year up 20% to $11.5 million.
“The economy and a dramatic decrease in FDA approvals was a challenge for all clients—big and small,” says Begasse.
“A number of specialty pharma companies either didn't get FDA approval or the economy squeezed them so much that they couldn't go ahead,” he continues. “For a startup, it's almost a death wish. A lot of what we won in 2007 had some challenge, and that affects us quite a bit because we make a major investment when we win a new account.”
Professional promotion and DTP work accounts for about three-quarters of the agency's business, with training, corporate identity, managed care and consulting rounding out the mix. Six new assignments came in last year, including global AOR for Genentech's Avastin, which the London office landed.
This year's wins include Salix Pharmaceuticals and Oceana Therapeutics—both of which Begasse calls “very promising with multiple indications and launches.”
The London office opened last August. It's led by Mike Taylor, Dr. David Ingram and Liz Maclaren. Taylor serves as strategic director; Ingram is medical director; and Maclaren helms creative. Taylor and Maclaren are both veterans of Grey Healthcare and Saatchi & Saatchi. The two offices share strategic processes, team-building approaches and capabilities.
The US crew moved into a new, custom-designed 17,000-plus square-foot space in downtown Manhattan last September. London headcount has grown rapidly to 13, while headcount in New York is down about 10 to 52.
Begasse explains that the agency “did some right sizing” at the beginning of this year mostly as a result of client spending freezes. He adds that he's currently looking to hire two people, as client commitments have solidified over the last few months.
“For a long time the talent pool was very shallow, you paid an extraordinarily high price for talent,” says Begasse. “It's unfair to the employer and the employee. It becomes a vicious cycle. Margins are getting considerably thinner.”
Senior leadership significantly increased in the US office last year. Added were two new managing partner EVPs—Michael Banner (director of client services) and Michael Rutstein (also director of customer integration)—and two new creative director SVPs —Adam Cohen (art) and Chris Runge (copy).
The first quarter has been slow, but Begasse has seen a lot of RFPs and RFIs.
“It's a mixed bag,” he explains. “There's a lot of opportunity. A lot of clients are looking for new blood and fresh ideas. Current business is little depressed. We're going to ride it out.”
Begasse adds that Concentric is focused on being a great partner and delivering strong, measurable results for clients as they face unprecedented budget pressure.
“We're giving current clients ideas that help their reduced budgets perform,” he says. “For new clients, we're opening their eyes to what a boutique, midsize agency can provide from a value standpoint. Clients get senior level people and a lot of interaction from partners on daily basis.”