Ad agencies' profits should signal better times for N.O. economy

If increased spending on advertising precedes a boom in the economy, things are looking up for New Orleans.

I think advertising is a pretty good barometer of the economy, said Mark Mayer, president of Peter A. Mayer Advertising in New Orleans. When corporations and businesses are feeling more optimistic about consumer spending patterns, they tend to fund their advertising budgets more aggressively.

That optimism help push revenues at Peter A. Mayer up 21.2 percent to $70.3 million in 2003 from $58 million in 2002. Much of the increase came from several new clients, including the New Orleans Zephyrs baseball team and food products manufacturer Zatarains, owned by Baltimore-based McCormick & Co. and still operated in Gretna.

We didn't lose anyone of significance during the year so it turned out to be a net positive, Mayer said. 2004 is probably not going to be as big in terms of growth as 2003 was, but I think it's going to be a very good year.

The biggest growth areas for the company, Mayer said, are in the public affairs division, followed by interactive media, including Web marketing and interactive CD-ROMs.

2003 was the best year on record for the Metairie-based Montalbano Group, which specializes in marketing for the automotive industry. 2003 revenues for the company were up 34.2 percent to $28.2 million from $21 million in 2002.

While I'm not expecting that kind of gain this year, I do see things on the upswing, said President Herb Montalbano. I anticipate that we will have another banner year.

The signing of Charlotte, N.C.-based Sonic Automotive, operator of more than 180 car dealerships around the country and the nation's second-largest automotive retailer, added to the record year. Sonic was one of eight new clients Montalbano landed last year.

Adding fuel to Montalbano's growth picture is the current cutthroat state of automotive retailing. Customers have learned to expect incentives such as zero-percent financing, Montalbano said.

Customers are so conditioned to these incentives, I just don't know how dealers are going to wean them off, Montalbano said. I just don't see it in the near future.

Zehnder Communications Inc. revenues jumped 23.9 percent in 2003 from $11.7 million to $14.5 million. Much of the increase came from new accounts with Popeye's Chicken & Biscuits and a rebranding campaign for the city of New Orleans.

We've seen tremendous increased activity in agency searches and even some new businesses moving into the market, said Jeffrey Zehnder, president and chief executive officer of Zehnder Communications. Business was still coming back from 2002, which was kind of an off year, especially in hospitality and tourism.

Zehnder has added four people to the company's staff within the past several months in anticipation of new business. The company has already landed several new accounts this year, Zehnder said.

2004 was a mixed year for Keating Magee Momentum Marketing of New Orleans. Revenues dropped 20.1 percent to $13.4 million from $16.2 million in 2002.

We restructured the agency a little bit to get leaner and meaner and focus on profitability, said Jennifer Magee, Keating Magee chief executive officer and founder. It was a year of focusing on the basics.

Keating Magee did pick up several new clients in 2003, including the House of Blues and Tulane University.

We've had a tremendous amount of activity in the first quarter, so I think things are definitely picking up, Magee said. We are looking for this year to be another strong growth year.

Copyright 2004 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.