Assuming that the state of the communications market is best defined by its participants, then 2019 was definitely a "dynamic" year. This was the word most cited by nearly 60 of Bulgaria's largest communications agencies. In a period free of surprises or market shocks, the agencies gained another year in which to transform and prepare for a potential economic crisis.
The big ten
All seems rather rosy in their business to judge from the financial results of the biggest market participants. The total revenue of the ten most dominant communications companies, those offering a full range of market and media services, grew by double digits in 2019. They even breached the 300 million levs figure for the first time. What´s more, their total 318 million levs in revenue represents two-thirds of the volume of Bulgaria's communications business. The main engine of this growth continues to be media agencies that manage the multi-million advertising budgets of their clients, but don´t necessarily earn very much themselves.
Traditionally, the first five spots go to companies that are part of an international holding. The 2019 leader is once again Ogilvy Group Bulgaria with a revenue of 65.6 million levs, which is 10 million levs ahead of second-placed DDB Group. Third place goes to Publicis Groupe Bulgaria for the second year in a row with 48 million levs.
Aegis Network Bulgaria with 45.9 million levs and BBDO Group with 37.7 million levs switched positions in the ranking, occupying spots four and five.
The second half of the ranking contains mainly Bulgarian agencies that have expanded their businesses over the years to take in a full range of services. Without big changes, sixth place is taken by Direct Media Group Bulgaria with 25.3 million levs. The only international presence in the bottom half is Havas Group Bulgaria with 17.1 million levs. All Channels Communication Group climbed one spot from 2017 with 9.6 million levs for 2018. The transformation of New Moment New Ideas' business has bumped them one spot down to the ninth place with 7 million levs, or 26% less than in 2017. With a small difference (6.5 million levs), the group forming around The Smarts takes the tenth position.
The companies have expanded their service portfolios with the aim of capturing new clients. In 2019, for instance, Ogilvy Group Bulgaria acquired the marketing agency Knoway, while a new PR department was developed as part of DDB Group. The All Channels group established a media unit, whereas The Smarts added the branding company Enthusiasm to their portfolio.
There were changes at New Moment New Ideas as well. The group's media wing MediaS was merged, while at the international level Havas Group Bulgaria was purchased by the Vivendi group, to which Universal Music, Gameloft and Canal+ belong. The companies BBDO Group, Publicis Groupe Bulgaria and Dentsu Aegis Network invested in acquiring and developing new technologies that focus on data and consumer behaviour analysis. Direct Media Group Bulgaria expanded its business through servicing regional organizations and in 2019 it operated on three foreign new markets with the Organization for Security and Co-operation in Europe.
Individual players
Many of the independent agencies on the market, responding to clients' demands for a full-service package, also bet on the expertise expansion strategy. Most of them avoid labelling themselves as a particular type of agency and opt for the "full communication services agency" tag. Hence 2019's ranking of the largest independent companies comprises entities with an artistic, digital and BTL profile that are expanding their services and businesses.
Aiming to meet the increasing demand for communications services, the agency eTel has, for example, created a new company to cater for its e-commerce clients. Knoway's managing director Emil Petkov explained that new services, mainly related to the creation of video content, have been added to the agency's portfolio. Netpeak's focus continues to be the development and automation of effective advertising and SEO services.
The media world
The country's largest media agencies are represented in a separate ranking. Apart from their business continuing to be narrowly focused, the large accumulation of revenue from managing their clients' media budgets makes their volume incomparable to the other market participants. The combined revenues of the Top 10 media agencies total 114 million levs in 2018, or 20 million levs more than the revenue of nearly 30 of Bulgaria's most successful communications services companies.
The absence of a dramatic change in the marketing investments of advertisers is borne out by the total revenues of media agencies, which had a yearly growth of less than 1%. This explains why some of them have added digital management to their services. "We restructured our team, acquired the digital agency All Digital, and this now allows us to offer a full spectrum of digital services," said Simona Tencheva, operations director at Argent. Similar steps were also taken by Zenith Advertising & Communications (ZAC), who has invested in the specialized agency Digital ID offering a full portfolio of digital services.
The managing director of Universal Media Bulgaria and Initiative agencies, Mariana Kovachevich, also described 2019 as dynamic. "The ownership changes at the two largest TV channels in Bulgaria (Nova and bTV) made a lot of noise in the industry, even though they were not a surprise." (The BTV deal, yet to be finalized, is expected in mid-2020.)
The different PR agencies
The largest PR agencies in Bulgaria have a separate ranking as well. Even though ten years ago their business was at a crossroads, they managed to adapt to the changing market environment and drastically expanded their services. They placed consulting at the core of their services and worked for the creation of a long-term vision for their clients, both inside and outside the firm. Hence the Top 10 PR agencies in Bulgaria reported double-digit revenue growth for 2018 as well. They earned over 4 million levs more than the year before and their total revenue was 19 million levs.
Client expectations in the PR industry are also on the rise and according to Kamelia Dimitrova, executive director at PR Play, they have been ever more discerning and in search of integrated solutions. In order to meet that demand, Broks Visiоn JSC has also expanded their digital services portfolio.
Although they have a different focus, the services of advertising, PR, digital and BTL agencies are increasingly overlapping. Even as competitors, they must often work together in the service of the same client and achieve a synergy of communication. "The best campaigns happen when different communication agencies and departments inside a company work in sync, meaning that less ego and more creativity, common sense and joint effort equal a better result," says Olga Lozanova, a partner at OT-DO Consult. The executive director of M3 Communications Group, Maxim Behar, believes that in a few years the agencies will merge into large companies under the aegis of PR business that creates content.
Assuming that the state of the communications market is best defined by its participants, then 2019 was definitely a "dynamic" year. This was the word most cited by nearly 60 of Bulgaria's largest communications agencies. In a period free of surprises or market shocks, the agencies gained another year in which to transform and prepare for a potential economic crisis.
