Ad agency wins major client

McKinney gets Coldwell Banker account as it recovers from losses last year

Durham advertising agency McKinney, which is trying to replace two big accounts it lost last year, has landed a major new client: Coldwell Banker Real Estate Corp.

The national real residential estate brokerage account is the second significant client won by McKinney since it laid off 40 workers at the end of January, leaving it with 187 employees. Those cutbacks followed the loss of the Sony Electronics and Audi of America accounts.

Jeff Jones, McKinney's president, said that winning the Coldwell Banker account --and the account of cell-phone operator Virgin Mobile, which it snared at the end of February -- hasn't totally made up for the earlier losses.

"We're not back in hiring mode," he said. "We all still know there is more work to do."

Neither McKinney nor Coldwell Banker executives would discuss McKinney's compensation agreement.

Reji Puthenveetil, a partner in the Raleigh office of ABA Consulting, which helps companies select ad agencies, said the Coldwell Banker and Virgin Mobile account wins prove that McKinney remains "a strong agency. Other clients see them as having appeal."

"Any time an agency is able to score a series of wins," he continued, "it encourages other clients to look at them. They see the agency as having a momentum."

Jones said that McKinney recently won another account that it expects to announce soon. He declined to discuss the size of the account, instead describing it "a very interesting account."

Coldwell Banker, which has 3,800 residential real estate offices and 120,000 sales associates nationwide, spent $101 million on advertising last year, according to TNS Media Intelligence. Coldwell Banker Real Estate, which is based in New Jersey and owned by Realogy, focuses solely on residential real estate.

Ad spending numbers are usually a good indicator of agency compensation -- since revenue typically amounts to 10 percent of the ad budget -- but the $101 million figure has a couple of asterisks. It includes ad spending by local franchisees, which isn't being handled by McKinney. And although McKinney is the lead agency, Coldwell Banker also has a second agency for online advertising.

Charlie Young, senior vice president of marketing at Coldwell Banker, said the company will devote about 70 percent of this year's ad dollars to TV and radio advertising, with the rest going to online. Coldwell Banker doesn't do any significant print advertising.

McKinney had been in rapid-expansion mode until it announced job cuts in February. It peaked at 250 employees last year, up from 160 in October 2004.

Last year McKinney posted a record $38 million in revenue, up 5.5 percent from 2005, when its revenue surged 50 percent.