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Karmarama (UK)

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Karmarama is a leading creative agency based in London. After a comparatively slow start, growth was rapid after 2007, especially following the arrival of skilled account handler Nicola Mendelsohn (until her departure in 2013 for Facebook). As a result, Karmarama became one of the UK's biggest independent shops, breaking into Campaign's Top 30 rankings for the first time in 2009, and climbing into the Top 20 in 2015. Creative output varies widely according to the demands of individual clients, but has become increasingly sophisticated. At the end of 2016, the agency was acquired by Accenture.

Clients

Click here for a Karmarama client listing from Adbrands Account Assignments

Competitors

See Leading UK Agencies

Brands & Activities

Karmarama has expanded dramatically in recent years, widening its offering from traditional advertising to include other below the line services. In addition to the main advertising agency, the group has spun out several more specialised units, including PR agency Kaper and production company Kream.

In summer 2011, Karmarama's directors sold a sizeable minority stake to investment fund Phoenix Equity Partners in order to raise funding for further expansion. That led to the creation of umbrella company Karma Communications Group, and the acquisition at the beginning of 2012 of Crayon, an integrated marketing agency also based in London (and previously known as Hicklin Slade & Partners). Crayon brought with it several satellite units including teams involved in data management and software development. In summer 2012, Crayon was absorbed into the main Karmarama business. In 2013, the group expanded further with the acquisition of social media agency Grape Digital. That too was absorbed into the main agency along with Nice Agency, acquired in 2015.

In 2012 the group scored its biggest ever account win with the capture of DIY giant B&Q. However the gain was short-lived - the account went into review at the end of 2013 and was lost. Nielsen (in Campaign) estimated billings of £88m for 2015.

In November 2016, the agency was acquired by Accenture for an undisclosed sum. It will become part of that group's Accenture Interactive resource, but will retain its existing brand and management team. The UK office of Accenture, along with digital agency Fjord, are expected to move into the same building at Karmarama during 2017.

Financials

For the year to April 2016, Karma Communications Holdings reported turnover (billings) of £39.2m, and revenues of £25.2m, up 6%. EBITDA rose 14% to £1.8m. However, the group has significant debt arising from the merger with Crayon and office relocation, resulting in large interest payments as well as depreciation and amortisation. This has led to net losses each year since 2011. Net loss for ye 2016 was £5.7m. There were 240 staff during the year.

Background

Karmarama was founded in 2000 by creative partners Dave Buonaguidi and Naresh Ramchandani. The pair had first teamed up at HHCL in the early 90s, before joining Chiat Day's fledgling London presence in 1993. Following that shop's acquisition by TBWA, they were the senior creatives in the team that broke away to launch St Luke's. However, both eventually drifted away from St Luke's - Buonagidi left in 1998 to launch Channel 4's inhouse unit 4creative; Ramchandani spent some time at design agency Wolff Olins in 1999 - before joining forces again in 2000 to launch Karmarama. Like St Luke's (though not perhaps to quite the same extent), the new agency established a reputation for standing apart from the rest of the London advertising industry, with unconventional attitudes and working practices. It got off to a reasonably strong start, helped along by key client Ikea, but its determinedly isolationist stance won it few friends elsewhere in the industry. The departure of Ikea in 2005 was a blow, and Ramchandani left the agency later the same year.

Over the next couple of years, Buonoguidi made a determined attempt to improve the agency's standoffish reputation (although he has maintained an absolute refusal to take part in awards ceremonies). In something of a surprise appointment, the agency was hired by David Cameron's Conservative Party in 2006, but the key development was the capture of the Nintendo account the following year. That catapulted billings from just £8m in 2006 to more than £30m. Another breakthrough was the arrival in 2008 of Nicola Mendelsohn, one of London's best-connected ad executives and former deputy chairman of Grey. She was instrumental in raising the agency's profile, and oversaw an aggressive new business strategy up until her departure in 2013.

Last full revision 21st February 2017

* Archive page for historical reference only. This profile is no longer being actively updated. See active page here *


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