Weber Shandwick: Agency Business Report 2008

CEO Harris Diamond and president Andy Polansky say the agency is currently seeing robust hiring and historically unprecedented revenue growth. The firm's revenue figures reflect its growth in technology and healthcare last year.

Outlook
CEO Harris Diamond and president Andy Polansky say the agency is currently seeing robust hiring and historically unprecedented revenue growth. The firm's revenue figures reflect its growth in technology and healthcare last year.

It is too soon to say whether a troubled economy will allow for as much success this year. Even though it suffered major losses like Pfizer, Cisco, and Century 21, the agency last year implemented many initiatives to set the foundation for continued growth and resilience.

The firm points out that its push to offer specialization beyond practice areas helped set it apart at a time when economic uncertainty looms for the PR industry. This means that agency teams working on a healthcare account need to understand not only healthcare, but the intricate makeup of the particular healthcare sector, such as oncology or radiology, Polansky notes. He adds that the many specialty areas that the agency introduced this year are a testament to its commitment to offering more sector knowledge than what has traditionally been expected from PR professionals.

The PR industry continues to learn how to use social media effectively. Though large agencies have developed a reputation for lagging in this space, WS has made efforts to tackle social media through its specialization initiatives.

Additionally, the firm has made a commitment to attracting and maintaining top talent through training and leadership forums and global exchange opportunities.

Staff

Weber Shandwick declined to provide staff numbers, but it says finding talent was last year's biggest challenge. Even so, the firm made several senior-level hires in 2007, including Peter Carson as EVP of public affairs from Ogilvy PR, Steven Johnson as SVP of consumer practice and youth marketing in Minneapolis from MS&L, John Isaf as SVP of financial communications from Arnold Worldwide, Ovidio Torres as EVP of healthcare, Chicago from Edelman, and David Ryan Shane as SVP, LA from International Creative Management.

WS experienced a handful of high-level exits, such as Renay San Miguel, SVP in Seattle; and Bryan Specht, SVP of Chicago. "Turnover has been down the last two years," says Diamond. He adds that the tightest markets for recruiting talent are Boston, New York, and Chicago. "The biggest areas where we are looking for people [are still] technology and healthcare," he adds. "It's easier to find business than it is to get the best people."

The firm declined to give its turnover rate, but Diamond says retention was especially high for senior-level positions.

"When you're growing at the rate we're growing, we can give more people growth opportunities," he says, noting that the agency encourages staffers to expand their skill set by working in new sectors or regions around the world.

Regional performance
The agency's core business in North America grew more than 15% last year, and also recorded strong growth in Europe and Asia-Pacific, with some regions reporting more than 40% growth. The biggest domestic growth markets were Chicago, New York, and Boston, with booms across all the major practice areas in those regions, says Polansky.

Among the solid-performing regions over the last year, the Midwest topped the list, followed by the East Coast, adds Polansky. While Southern California was slower than the rest of the country, increased business in the corporate and entertainment sectors can very well lead to a boost for that market in 2008.

Practice areas
The agency says it experienced double-digit growth across practices ranging from corporate and public affairs to technology, healthcare, and consumer.

The firm's practice sectors include 27 areas that encompass both core marketing and specialties, such as healthcare, technology, public affairs, and travel and lifestyle brands. Additionally, WS deploys specialist teams that home into key market areas, demographics, or communications niches.

Last year, WS launched several new expertise areas, including Screengrab, for digital and social media specialties; Planet 2050, which focuses on CSR; Recall Response, to assist companies during reputation-damaging recalls; a youth marketing niche; and an education sector specialty. Over time, the agency shifted from regional specialties to training talent to have a deep understanding of a particular sector or industry.

The majority of the agency's accounts are in consumer marketing (33%), followed by technology (21%), corporate (15%), healthcare (14%), financial services (10%), and public affairs (4%).

Accounts

The firm won 26 key accounts in 2007, including Nortel, Amdocs, National September 11 Memorial & Museum, Ace Hardware, and VeriSign.

It also lost five key accounts, including Cisco and Century 21 because both companies reorganized their PR function. Pfizer pulling Exubera from the market also caused an account loss.

Even so, many established clients expanded their relationship with the agency, including Pfizer, Unilever, Genentech, Microsoft, Susan G. Komen for the Cure, GM, MasterCard Worldwide, Johnson & Johnson, CVS, Staples, and the US Army.

Financial performance
Though WS declined to reveal its financial information, it says it recorded the best year in its history, registering double-digit revenue growth. Additionally, the agency says this year was stellar for its organic growth, which included capitalizing on a trend towards more global business and a 30% growth among its top 40 clients.

Key facts
Principals: Harris Diamond, CEO; Andy Polansky, president; Jack Leslie, chairman (l-r)

Ownership: Interpublic Group, as part of CMG

Offices: 83 wholly owned offices globally, including 20 in the US; 47 partly owned offices globally

Revenue:
Would not reveal a range, but did say it registered double-digit revenue growth, with 30% growth among its top 40 clients

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