Ogilvy Public Relations Worldwide: Agency Business Report 2007

Ogilvy PR is one of the few agencies that has a meaningful presence in every global region, and multi-region wins for the firm in 2006 show that its wayfarer spirit is providing great returns.

Ogilvy PR is one of the few agencies that has a meaningful presence in every global region, and multi-region wins for the firm in 2006 show that its wayfarer spirit is providing great returns.

Another 2006 highlight, Marcia Silverman, global CEO of Ogilvy, says, was her firm's much closer alignment with sister companies Ogilvy & Mather and OgilvyOne on about 20% of its business.

"The big brands seem to be interested in integrated work, which is exciting," she says. "That doesn't mean we've left anyone behind. Those that want [that integrated offering, can] participate. When they don't, they don't have to."

Silverman concedes that the 35% turnover rate in 2006 is high, though she asserts it's typical for a firm its size. Still, Ogilvy is trying to curb turnover through new training programs, like its Core Curriculum course that all entry- and junior-level associates in DC and New York must take. Ogilvy's two-day Managing for Performance program trained about 60 EVPs, SVPs, and VPs during 2006.

Public affairs has continued to benefit from the 2005 acquisition of what is now called Ogilvy Government Relations. Also, the new, Democratic-controlled Congress has been very active in government oversight hearings, creating new opportunities for public affairs firms in representing corporate clients called to testify on Capitol Hill. Ogilvy has also sought to expand in the digital realm with 360 Degree Digital Influence helping reach target audiences and manage brands online.

The healthcare communications boom has helped Ogilvy, most dramatically with a recent three-year, $9 million award from the US Department of Health and Human Services for communications preparedness for pandemic flu. While social marketing showed the slowest growth among the firm's practice areas in 2006, along with its corporate practice, work on pandemic flu communications and other issues will help Ogilvy reinvigorate both business areas.

"I sound optimistic - and I am," Silverman says.

KEY FACTS

Principals: Marcia Silverman, global CEO; Paul Hicks, regional CEO, the Americas

Ownership: WPP Group

Subsidiary Agencies: Ogilvy Government Relations, Feinstein Kean Healthcare, BWR

Offices: 8 US, 46 wholly owned rest of the world; plus 5 majority owned; 13 part-owned

Revenue: US between $100m-$200m, global between $200m-$300m*

*Agencies were requested to check a revenue bracket

Staff
Ogilvy PR globally has a staff of 1,573, up about 20% from 2005. Turnover was 35%. Senior hires during 2006 included MD Chris John, former member of Congress; MD of insights and research Jennifer Scott, previously with Strategy One; a new MD of PR and public affairs in Brussels, Natalie Sarkic-Todd, formerly with public affairs agency EPPA; SVP of media strategies and executive positioning Louise Kehoe, a former Silicon Valley bureau chief for the Financial Times; a new CEO of Ogilvy PR EMEA, Martin Liptrot, who was previously MD of global communications for FedEx; Ogilvy PR Japan president Orlando Camargo, previously VP and director of corporate communications at Goldman Sachs in Japan; and MD of healthcare, strategy, and planning Michael Durand, previously with Porter Novelli. Senior staff who departed included Kate Childress, Matt DellaCroce, Henry Eshelman, Chris Atkins, Sherry Pudloski, and Susan Stillings. Major promotions included John Bell, who was named MD and executive creative director of Ogilvy's Creative Studio unit.

Regional performance
Ogilvy is an agency truly known for its genuine and broad global reach. It opened new offices this year in Sao Paulo and Mexico City, and will soon open in Argentina and Rio. In Asia, it boasts of being twice as large as the next firm. Accounts there include Amex and IBM, its largest. Ogilvy is also doing a lot of Olympics work for clients, especially Adidas.

"In Europe, for the first time in a [while], we are showing strength," says Silverman. "We're growing, particularly in the UK. In France, [our] new office is doing great work. In Germany, we bought a firm last year in DŸsseldorf, and it's spectacular." Russia is growing, too, with a new Kiev office complementing ones in St. Petersburg and Moscow. In the US, strong performance is cited in DC and New York.

Practice areas
Ogilvy PR has practice areas in public affairs, healthcare, entertainment and consumer marketing, corporate, and tech. In the digital realm, it is placing a lot of emphasis on its Creative Studio unit, which develops strategic communications campaigns such as an effort in LA to curb street litter. Also part of its emphasis on online communications is the 360 Degree Digital Influence team, which is part of Creative Studio.

Other units include DC-based Ogilvy Government Relations, which until recently was called the Federalist Group; Cambridge, MA-based Feinstein Kean Healthcare, which works in biotech, pharma, and molecular medicine; and Beverly Hills, CA-based BWR Public Relations, which does work related to movies, TV, consumer products, and more.

Accounts
Key wins in 2006 included Lenovo, Intel, PepsiCo, and Motorola, while NIAID was the biggest loss for the firm in DC. Lenovo, Intel, and Motorola appointed Ogilvy across three or more countries. Existing accounts that expanded into new markets included Johnson & Johnson, Unilever, and DuPont. About 25% of its clients work on retainer.

Financial performance
Ogilvy didn't provide 2006 figures, but did say global revenue fell between $200 million and $300 million, with domestic revenue in the $100 million to $200 million range.

Agency's full questionnaire follows:

Name of parent division/company (enter both where applicable)
Ogilvy, WPP

Name of subsidiary companies

  • Ogilvy Government Relations (government relations)
  • Feinstein Kean Healthcare (biotechnology)
  • BWR (entertainment)

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)
Marcia Silverman, Global CEO
Paul Hicks, Regional CEO, The Americas

What is your current headcount?
Agency declined to give information.

How has your headcount changed since FY 2005?
Agency declined to give information.

What was the percentage of staff turnover in 2006?
35%

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
Chris John, MD (in Congress)
Jennifer Scott, Managing Director Insights & Research StrategyOne)
Peter Gawrychowski, Chief Financial Officer (Ogilvy WW Finance)
Michael Durand, MD healthcare, strategy & planning (Porter Novelli)

What senior staff have departed the firm? Please state name and previous title
Kate Childress (relocate)
Matt DellaCroce (relocate)
Henry Eshelman (own business)
Chris Atkins (client side)
Jeff Hershkowitz (deceased)
Sherry Pudloski ; MD, Health & Medical (client side)
Susan Stillings (Edelman)

Please list any other senior management changes, including restructures and significant, senior-level promotions
None

Have you made any acquisitions in the past year, or merged with another agency?
No

How many wholly owned offices do you have globally?
The Americas

  • Atlanta
  • Boston
  • Brasilia (majority-owned)
  • Chicago
  • Los Angeles
  • Mexico City (majority-owned)
  • New York
  • Rio de Janeiro (majority-owned)
  • Sacramento
  • San Francisco
  • Sao Paulo (majority-owned)
  • Washington, D.C.

Europe

  • Barcelona
  • Brussels
  • Bucharest
  • Dublin
  • Dusseldorf
  • Frankfurt
  • Istanbul
  • Ireland (majority owned)
  • Kiev
  • Lisbon
  • London
  • Madrid
  • Milan
  • Paris
  • Prague
  • Seville
  • Stockholm
  • Vienna
  • Warsaw
  • Zurich

Africa

  • Casablanca
  • Johannesburg
  • Nairobi
  • Senegal

Middle East

  • Amman
  • Beirut

Asia Pacific

  • Auckland (majority-owned)
  • Bangalore
  • Bangkok
  • Beijing
  • Canberra
  • Chennai
  • Guangzhou
  • Hanoi
  • Ho Chi Minh City
  • Hong Kong
  • Jakarta
  • Karachi
  • Kuala Lumpur
  • Manila
  • Mumbai
  • New Dehli
  • Seoul
  • Shanghai
  • Sydney
  • Singapore
  • Taipei
  • Tokyo
  • Wellington (majority-owned)

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

  • Europe - Athens, Moscow, St. Petersberg, Helsinki
  • Middle East - Bahrain, Dubai, Jeddah, Kuwait City, Riyadh, Cairo, Jordan
  • Asia Pacific - Auckland, Canberra Aust.

What offices opened in 2006 or early 2007? (State when)
Sao Paulo, Brazil - February 2007; Mexico City - March 2007

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

Which regions, US and globally, are growing, and why?
All regions, new client wins and organic business growth

How many practice areas do you have? Please list.
Seven practice areas: Public Affairs, Corporate, Healthcare, Social Marketing, Consumer Marketing and Entertainment, Technology

Which ones are new?
None

Of those, which ones are part of the core strategy of the agency?
N/A

Which practice areas have been phased out in the past year?
N/A

What practice areas showed the most growth? Please elucidate.
Public Affairs, Healthcare, Entertainment, & Consumer Marketing, Technology

Which practice areas showed the least growth? Please elucidate.
Corporate & Social Marketing

What is the distribution of accounts across practice areas?
N/A

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
Lenovo, Intel, Pepsico, Motorola

Of your 2006 wins, how many were across three or more countries?
Lenovo, Intel, Motorola

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
NIAID was the biggest loss for DC

Did you expand any existing accounts into new domestic or international markets or sectors?
J&J, Unilever, Nestle, BP, Ford, DuPont

What proportion of your clients are on a retainer?
Approx. 25%.

Has this changed over the past year?
Minimal change.

Performance

What was your 2006 global (including US) revenue?
$200 million - < $300 million

What was the % change over 2005 global revenue
Global revenue increased by more than 10%

What was your global profit margin in 2006?
Agency declined to give information.

What was your 2006 US revenue?
$100 million - < $200 million

What was the % change over 2005 US revenue?
Approximately 10%

What was your US profit margin in 2006?
Agency declined to give information.

Did you experience top-line or bottom-line growth in the past year, or both? Please elucidate.
Both top-line and bottom-line growth domestically and globally.

How much of your growth was organic, and how much was due to new business won?
N/A

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
We exceeded our expectations/budgets.

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.
Our agency continues its emphasis of ongoing core curriculum training along with management training. We also offer continuing professional education run both internally and externally.

Managing for Performance:
Employees from all U.S. offices are eligible to participate in the corporate administered "Managing for Performance" program. This is a two-day intensive program that trains managers how to do the "right" things, while doing things right in their roles as people managers. In 2006 we conducted three sessions and approximately 60 managers at the EVP, SVP and VP levels completed the program.

Core Curriculum
Washington DC and New York require all entry-level and junior level associates (account coordinator, assistant account executive and account executives) to complete a series of Core Curriculum courses. Other U.S. offices teach several components of Core Curriculum but not each individual course.

Fundraising - We are a sponsor for the LaGrant Foundation's career development in 2008.

2007 Agency Business Report

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