GolinHarris: Agency Business Report 2007

With its 50th anniversary in 2006, Golin is "firing on all cylinders right now," Fred Cook, president and CEO, says, citing defining 2006 achievements including securing the Dow account, launching Nintendo's Wii, and winning PRWeek's Large Agency of the Year honor.

With its 50th anniversary in 2006, Golin is "firing on all cylinders right now," Fred Cook, president and CEO, says, citing defining 2006 achievements including securing the Dow account, launching Nintendo's Wii, and winning PRWeek's Large Agency of the Year honor.

Golin also last year positioned itself as a leader in the CSR/social marketing arena. As well as added work for existing clients, Cook says, in 2006, "the firm secured a number of new clients [for whom] we only do corporate-citizen work."

According to Cook, the year ahead offers "a lot of interesting work in aligning clients with appropriate NGOs," via the firm's recently launched activism-issue management offering, Engage.

Key facts

Principal: Fred Cook, president and CEO
Ownership: Interpublic Group, as part of CMG
Offices: 12 wholly owned US, 18 rest of the world. Three affiliates in Latin America

Staff
Golin has 550 employees worldwide, up from 490 in 2005. Particular investment was made in "intellectual capital with deep research capabilities and marketing skills in multicultural marketing, Internet, and employee communications," says Cook.

Key hires in 2006 included Jeff Burnett, EVP, healthcare, from Fleishman-Hillard; Idil Cakim, VP, new media, and Hertha Meyer, SVP, research, both from Burson-Marsteller; and Rich Williams, SVP, consumer brands, from MS&L. From GCI, Greg Sendi joined as EVP, corporate communications. Golin also added new MDs in Shanghai, Beijing, Taipei, Southeast Asia, and Greater China.

Regional performance
The firm reports "top-line growth in every office and significant margin improvement in every region." In 2006, it acquired the staff and clients of Panache Communications, a San Francisco-based boutique catering to Asian and Asian-related audiences. The firm also expanded its presence in Southeast Asia, opening a Jakarta office.

Practice areas
Golin has seven core areas, most of which saw growth in 2006, the firm reports. Corporate communications, healthcare, marketing and brand strategy, and CSR/social marketing grew the most. Public affairs and tech grew "at a more modest rate."

Golin's InsideEdge internal communications offering, launched in 2005, has not only seen "impressive growth" within the firm, but has also been extended to other IPG agencies' clients. Golin last year formalized nine new product offerings, ranging from consumer connectivity and integrated media to mainstream multicultural outreach and aging opportunities.

Accounts
Wins included Dow Chemical, Corbis, Good Humor-Breyers, GoTV, and GlaxoSmithKline. The firm parted ways with SC Johnson - a global account - but it reports that existing relationships with State Farm grew by 62%, and BP by 53%. Golin also reports noteworthy organic growth with Toyota, NestlŽ, Cisco, and McDonald's.

Financial performance
Golin states that in terms of both revenue and profit, 2006 numbers were up - a 13% year-on-year revenue rise from 2005. The year's performance, the agency says, was the strongest it's had in the recent past.

Agency's full questionnaire follows below:

Name of parent division/company (enter both where applicable)
The Interpublic Group of Companies

Name of subsidiary companies
None

Has your ownership status changed in the past year? If yes, please explain
No

Name of global CEO and US CEO (or most senior equivalent)
Fred Cook, president and CEO

Name of person, if any, the most senior person named above reports to
Harris Diamond, CEO, CMG Group

What is your current headcount?
550 employees worldwide

How has your headcount changed since FY 2005?
We reported 490 employees worldwide in FY 2005.

What was the percentage of staff turnover in 2006?
We cannot disclose turnover numbers.

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
Jeff Burnett, EVP, Healthcare Group, Chicago - from Fleishman-Hillard
Idil Cakim, VP, New Media, New York - from Burson-Marsteller
Anne Isenhower, SVP, Media Relations Director, New York - from the American Cancer Society
Anouk Jacob, director, Paris
Lydia Lee, managing director, Shanghai and Guangzhou
Nikki Lin, managing director, Beijing
Hertha Meyer, SVP, Research Director - from Burson-Marsteller
Greg Sendi, SVP, Corporate Communications Group, Chicago - from GCI
Sharon Sim-Krause, EVP, San Francisco
Tracy Weisman, EVP, Consumer Brands Group, Chicago
Rich Williams, SVP, Consumer Brands Group, Chicago - from Manning Selvage & Lee

What senior staff have departed the firm? Please state name and previous title
Diane Wu
, managing director, Shanghai
Valerie Amant, director, Paris
Jules Boasberg, SVP, New Business Development

Please list any other senior management changes, including restructures and significant, senior-level promotions
Scott Farrell, promoted to co-regional managing director, U.S. Central Region
Stanley Liu, promoted to managing director, Taipei
John Morgan, promoted to managing director for Greater China
Ginger Porter, promoted to managing director, Texas
Chitra Rajaram, promoted to managing director for Southeast Asia
Gary Rudnick, promoted to co-regional managing director, U.S. Central Region

Have you made any acquisitions in the past year, or merged with another agency?
In 2006 GolinHarris brought on board the staff and clients of San Francisco-based Panache Communications, an award-winning boutique serving Asian and Asian-related companies, and with a particular expertise in technology.

How many wholly owned offices do you have globally? Please list with agency names and cities under the following headings. Add majority-owned offices in parentheses.

North America - 13
Atlanta, Baltimore, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Orange County, San Francisco, Seattle, Toronto, and Washington, DC

Europe - 7
Brussels, Frankfurt, Geneva, Madrid, Milan, London, The Hague

Middle East - 1
Dubai

Asia Pacific - 9
Beijing, Guangzhou, Hong Kong, Jakarta, Shanghai, Singapore, Sydney, Taipei and Tokyo.

How many partly owned offices or affiliates do you operate globally? Please list agency names and cities under the following headings.

Latin America
Zimat Consultores, Mexico City, Mexico
Publicom, Sao Paolo and Rio de Janiero, Brazil
Nueva Comunicación, Buenos Aires, Argentina

Europe
Comunica, Moscow, Russia
Munz Alenius, Stockholm, Sweden
Ciszewski PR, Warsaw, Poland
Consensus PR, Riga, Lativa
Action PR, Various Eastern Europe

Africa
Gillian Gamsy International, Houghton, South Africa

Asia Pacific
Grape PR, Seoul, Korea

What offices opened in 2006 or early 2007? (State when)
In 2006 we opened offices in Jakarta, expanding our reach in Southeast Asia.

What offices closed in 2006 or early 2007? (State when)
None

Which regions, US and globally, are growing, and why?
The US is off to a strong start in Q1 and is tracking towards significant growth over last year. London is growing fast with a nine-for-nine new business performance in early 2007.

Practice areas

How many practice areas do you have? Please list.
We have seven primary practices:

  • Marketing and Brand Strategy
  • Corporate Communications
  • Healthcare
  • Technology
  • Public Affairs / Government Relations
  • Employee Communications
  • CSR / Social Marketing

Which ones are new?
In 2006, GolinHarris formalized seven new practices and products that address the trends and issues shaping the future of our industry:

  • Anthrographics: Consumer Segmentation
  • Brandgauge: Strategic Analysis and Planning
  • Dialogue: Integrated Media Engine
  • Engage: Activist Issues Management
  • Gadget: Consumer Connectivity
  • Integration: Mainstream Multicultural Communications
  • Longevity: Aging Issues and Opportunities

Of those, which ones are part of the core strategy of the agency?
All practices are part of the core strategy of the agency.

Which practice areas have been phased out in the past year?
None of our practices have been phased out.

What practice areas showed the most growth? Please elucidate.
We saw growth across most practices last year, including corporate, healthcare, marketing and our CSR Change practice. Insidedge, our award winning employee communications practice, also saw impressive growth.

Which practice areas showed the least growth? Please elucidate.
Public affairs and technology grew, but at a more modest rate.

What is the distribution of accounts across practice areas?
It is difficult to break down business by practice, as our client engagements cut across a number of practice areas, but an estimate is as follows:

Corporate Communications 20%, CSR/Social Marketing 8%, Healthcare 12%, Internal Communications 10%, Marketing and Brand Strategy 30%, Public Affairs 10% and Technology 10%

Accounts

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
2006 was a great new business year for GH. Here is a list of some of the key client account wins:

U.S.: AAAA, Alcon, America on the Move, Corbis, Cord Blood Registry, DermaCare, DHR State of Georgia, Dow Chemical Company, Good Humor - Breyers, GoTV, GlaxoSmithKline, Killian's Beer, Las Vegas Sands Corp., Miami Museum of Science, National Turkey Federation, Red Rock Hotel, Seibel Foundation, Shire Pharmaceuticals, Society of Actuaries, TransUnion and among others.
Asia: China Light & Power, IKEA, Wei Chuan Food Ltd, Toys R Us.
EMEA: emusic, NEC, Orange.

Of your 2006 wins, how many were across three or more countries?
Dow Chemical Company, TransUnion

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
SC Johnson (global), SAS (UK)

Did you expand any existing accounts into new domestic or international markets or sectors? Please elucidate.
In 2006 our top tier clients provided a significant amount of our growth over 2005. We expanded relationships with major clients, including BP, Toyota, McDonald's, Nestle, and Cisco.

What proportion of your clients are on a retainer?
On average, 20% of our clients are on retainer.

Has this changed over the past year?
No. This proportion has remained fairly consistent.

Performance

What was your 2006 global (including US) revenue?
We cannot disclose this information.

What was the % change over 2005 global revenue
We cannot disclose this information.

What was your global profit margin in 2006?
We cannot disclose this information.

What was your 2006 US revenue?
We cannot disclose this information.

What was the % change over 2005 US revenue
We cannot disclose this information.

What was your US profit margin in 2006?
We cannot disclose this information.

Did you experience top-line or bottom-line growth in the past year, or both? Please elucidate.
Both revenue and profit were up significantly over 2005, with double-digit top-line growth and profit growth even stronger.

How much of your growth was organic, and how much was due to new business won?
Growth for the year was roughly equal between organic growth and new business wins.

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
2006 saw the strongest performance we have had in the past several years and was in line with expectations, with top-line growth in every office and significant margin improvement in every region.

Please briefly outline any initiatives undertaken in 2006 that add to your agency's story, such as staff development/training, fundraising/charitable initiatives, community programs, business partnerships, etc.
Staff Initiatives
-- We are consistently named one of the best agencies to work for by leading PR organizations and media that recognize our commitment to our talent-oriented culture. But the endorsement we really care about is that of our people. Our 2006 staff survey shows continued improvement despite huge increases in positive responses last year. Eighty-six percent of our global staff says the agency is headed in the right direction, up from 83 percent last year and 64 percent in 2004.

"I think GH is changing for the better due mostly to some of the recent forward-thinking vision that encourages new ideas, unique ways of approaching challenges and striving to anticipate future trends," said one GH employee.

Business Partnerships -- We are committed to working together to develop and advance the PR industry. We are active members of Council of PR Firms, Arthur W. Page Society, Conference Board, PRSA, IABC, Counselors Academy, Black Public Relations Society, WOMMA, among others. We are also a proud sponsor of the PRSA 2006 International Conference.

Community Programs -- GolinHarris believes in doing well by doing good. Our offices support a wide range of charitable organizations, and also encourage employees to get involved in issues and activities that make a difference in the causes that matter to them. In commemoration of our 50th anniversary, GolinHarris decided to give-back with a global volunteer initiative. In October/November 2006 every office will take one business day to volunteer to local charity/cause of their choosing, from Dubai's pro-bono work for All As One, an organization benefiting orphaned children in Sierra Leone, to the clean-up of Hermosa Beach in Los Angeles, to the painting of a Chicago YMCA facility.

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