Cohn & Wolfe: Agency Business Report 2007

Donna Imperato's leadership appears to continue apace, and with GCI now reporting up through her, she now has a stronger still portfolio with which to work.

Donna Imperato's leadership appears to continue apace, and with GCI now reporting up through her, she now has a stronger still portfolio with which to work.

C&W continues to balance organic growth with new business, and while healthcare remains a strength, the firm is more diverse than before.

Imperato, CEO of Cohn & Wolfe and chair of GCI Group, says the agency hopes to continue to show organic growth in 2007, and is excited about the new Shanghai office's potential to strengthen the global footprint, as well as rolling the green practice throughout global offices.

Principal: Donna Imperato, CEO Cohn & Wolfe, chair of GCI Group

Ownership: WPP Group

Offices: Four US, 10 wholly owned rest of the world, plus two partly owned offices

Staff
Global headcount is at 450. Senior hires include Sally Barton, EVP and head of healthcare North America; Andrew Sharkey, MD of corporate affairs in London; and Geoff Bettie, MD in London. No departures stated.

Regional performance
In 2006, the agency opened an office in Shanghai, which has gotten off to a promising start. C&W cited strong growth in all regions within the US over the past four years. In Europe, London is particularly strong.

Practice areas
The agency has practice areas in consumer, healthcare, technology, corporate, and green - the latter of which will be rolled out across more regions this year. Healthcare represents 35% of the firm's global business, consumer 30%, and 35% is distributed in corporate and technology. C&W showed strong growth in the latter two practice areas.

Accounts
Key 2006 wins for the agency included Panasonic, Hill's Pet Nutrition, Oneida, Merck, Elan Pharmaceuticals, American Express, Asti Spumanti, Piczo, Deutche Bank in Milan, AstraZeneca, and Audi. Five of the account wins span three or more regions.

Agency's full questionnaire follows below:

Name of agency:
Cohn & Wolfe

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

Name of subsidiary companies
None stated

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

Name of global CEO (or most senior equivalent):
Donna Imperato

Name of person, if any, the most senior person named above reports to:
Martin Sorrell

What is your current headcount?
450

How has your headcount changed since FY 2005?
Increased 10%

What was the percentage of staff turnover in 2006?
23%

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company.
Sally Barton, EVP, Head of Healthcare, North America, formerly of Hill & Knowlton; Andrew Sharkey, Managing Director Corporate Affairs/London; Geoff Beattie, Managing Director/London.

What senior staff have departed the firm? Please state name and previous title?
None stated.

Please list any other senior management changes, including restructures and significant, senior-level promotions:
Jeremy Baka, promoted to Chief Creative Catalyst.

Have you made any acquisitions in the past year, or merged with another agency?
Opened an office in Shanghai.

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:
New York, Chicago, San Francisco, Los Angeles, Toronto
Latin America: Mexico
Europe: (Denmark), Frankfurt, Geneva, Hamburg, London, Madrid, Milan, Paris, (Sweden)
Asia Pacific: Shanghai

How many partly owned offices or affiliates do you operate globally? Please list agency names and cities under the following headings.
None stated

What offices opened in 2006 or early 2007? (State when):
Shanghai opened in 2006.

What offices closed in 2006 or early 2007? (State when)
Agency declined to give information

Which regions, US and globally, are growing, and why?
In 2006, all of our regions showed growth. In Europe, we've grown and outperformed in markets such as London, thanks to a very talented pool of professionals. Our business in China has grown because it was a start-up. The US offices have been growing significantly for the past four years.

Practice areas

How many practice areas do you have? Please list.
Consumer, Healthcare, Technology, Corporate and Green.

Which ones are new?
The Green Practice will be launched globally this year.

Of those, which ones are part of the core strategy of the agency?
All practice areas fall into our core strategy of creating, building and protecting client brands.

Which practice areas have been phased out in the past year?
None

What practice areas showed the most growth? Please elucidate.
Our Consumer and Technology practices have grown the most in 2006. Technology has grown most significantly in the US, due in large part, to our talented teams in New York and San Francisco. The Consumer group in New York has added new clients and our Corporate work in Europe has shown tremendous growth, particularly in London.

Which practice areas showed the least growth? Please elucidate.
All our practice areas have grown nicely in 2006.

What is the distribution of accounts across practice areas?
Healthcare represents 35 percent of our business globally, Consumer is about 30 percent and 35 percent is distributed in Corporate and Technology.

Accounts

What key account wins did you have in 2006? If based outside the US, or are global, please state regions. Panasonic, Hill's Pet Nutrition, Oneida, Merck, Elan Pharmaceuticals, American Express, Asti Spumanti (Global), Piczo (Global) Deutsche Bank (Milan), Astra Zeneca (Pan-European), Audi (Germany), Joost (NY and London), Vaseline, Barclays (London), UK Trade & Investment (Geneva), Arlington Real Estate, Astra-Zeneca, Neinver (Madrid).

Of your 2006 wins, how many were across three or more countries?
We've had five new pieces of business spread across three or more countries.

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.
N/A

Did you expand any existing accounts into new domestic or international markets or sectors? Please elucidate. We have expanded our US Hilton business into Mexico, Europe and Asia. We've expanded our US Ford business into China; we've expanded our US Colgate business into Europe; we've expanded our US Interwoven business into London.

What proportion of your clients are on a retainer?
About 20 percent of our clients are on retainer.

Has this changed over the past year?
No

Performance

What was your 2006 global (including US) revenue?
Between 50 and 100 million.

What was the % change over 2005 global revenue?
N/A

What was your global profit margin in 2006?
N/A

What was your 2006 US revenue?
Less than$50 million

What was the % change over 2005 US revenue?
N/A

What was your US profit margin in 2006?
N/A

Did you experience top-line or bottom-line growth in the past year, or both? Please elucidate.
We experienced both top and bottom line growth of more than 10 percent.

How much of your growth was organic, and how much was due to new business won?
Growth was equally organic and new business generated.

How did your performance, in terms of revenue and growth, meet expectations you had for the year? Please answer this even if you have not submitted revenue figures, including any information that characterizes your 2006 performance.
Both top and bottom line growth exceeded our budgeted financials for the year.

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.:
Cohn & Wolfe implemented a global creative training program called The Creative Catalyst Network. It has enhanced our existing and new business efforts by bringing fresh thinking across practices and across offices internationally. We continue to build our social marketing expertise and now implement new media programming in more than 70 percent of our client plans. This has generated new income among existing clients.

GCI Group

GCI says 2006 was its best year in the past five , and the second half in particular was good for new business. Jeff Hunt, CEO, says that he expects to carry that momentum into 2007 and record another strong year.

"There's always risk that a new leader will not get the traction they need," he adds, "but we [had] momentum [in] the second half of the year. I expect that to continue."

News that GCI is not on P&G's list of five preferred PR providers, a key barrier to a merger with C&W (who has a longstanding relationship with Colgate-Palmolive) is perhaps a sign that the agencies consolidating is not as remote a possibility as once thought, in spite of WPP's famous reticence to combine brands.

Principal: Jeff Hunt, CEO, GCI Group

Ownership: WPP Group

Offices: Five wholly owned in the US, 32 rest of the world, plus 25 affiliates

Staff
Staff totals 250 in the US, 750 worldwide, with no significant change over last year. Senior hires included Joel Babbit, president and chief creative officer; Mark Cater, president, GCI London; Donna Fleishman, president, GCI Atlanta; and Stephanie Marchesi, president, GCI New York. Significant departures include Don Bartholomew, EVP, measurement; Anna Maria DeSalva, EVP, healthcare; Jennifer Cohan, New York president, and Ray Kerins, EVP of media relations.

Regional performance
GCI reported growth throughout its US regions. Internationally, the agency reports particular strength in the Nordic region and in Germany.

Practice areas
Practices include healthcare (40% of business), consumer marketing (20%), corporate (20%), media relations, and digital media. Healthcare remains GCI's strongest force.

Accounts
Key wins include Darden Restaurants, Nike, MetLife, Genentech, Citigroup, Morgenthaler Partners, Georgia Tech, Zest, and Garmin. Losses include Intercontinental Hotels and Intel.

Agency's full questionnaire follows below:

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

Name of subsidiary companies
N/A

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)
Jeff Hunt
is GCI's Worldwide CEO

Name of person, if any, the most senior person named above reports to
Jeff Hunt
reports into WPP through Donna Imperato, Chair of GCI and Cohn & Wolfe

What is your current headcount?
United States: 250
Worldwide: 750

How has your headcount changed since FY 2005?
Our headcount has not seen any significant change in the past year.

Did you make any senior hires in 2006 (VP and higher)? Please state name, title, and previous company

  • Joel Babbit, president, Chief Creative Officer, GCI Group, formerly with Grey Worldwide
  • Mark Cater, president, GCI London - formerly with Ketchum
  • Donna Fleischman, president, GCI Atlanta - formely with Fletcher Martin
  • Stephanie Marchesi, president, GCI New York - formerly with MS&L
  • Andrew Silver, EVP, Consumer Practice - formerly with Ogilvy Public Relations
  • Rachelle Spero, SVP, Digital Media, GCI New York, formerly with Digital Influence Group
  • Paul Walker, EVP, Digital Media, former CEO of an e-commerce company following 10 years with Accenture
  • Elinore White, SVP, Healthcare, formerly with MS&L
  • Kiersten Zweibaum, EVP, Corporate Practice - formerly of Ketchum

What senior staff have departed the firm? Please state name and previous title.

  • Don Bartholomew, Executive Vice President, Measurement
  • Anna Maria DeSalva, EVP, GCI Healthcare
  • Ellen Golden, EVP, Consumer Marketing Practice Head
  • Jennifer Cohan, president, GCI New York
  • Ray Kerins, EVP, Media Relations

Please list any other senior management changes, including restructures and significant, senior-level promotions

  • Jill Dosik promoted to EVP, New York Healthcare Practice Leader
  • Bill Crane promoted to Senior Vice President, Media relations Practice Head
  • Bill Martin promoted to EVP, North American Healthcare Practice Leader
  • Lynne Skinner, promoted to president, GCI Read Poland

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

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

 

Agency Location

Relationship

Atlanta - GCI Group

Wholly Owned

Chicago - GCI Group

Wholly Owned

Los Angeles - GCI Group

Wholly Owned

New York - GCI Group

Wholly Owned

Austin - GCI Read Poland

Wholly Owned

Canada - GCI Toronto

Wholly Owned

 

 

Latin America

 

Agency Location

Relationship

Argentina - Consultores Del Plata

Affiliate

Brazil - Gaspar & Associados

Affiliate

Chile - GCI Strategies

Wholly Owned

Colombia - Strategic PR Group

Affiliate

Ecuador - GCI Ecuador-Guayaquill

Wholly Owned

Mexico - GCI Mexico

Wholly Owned

Peru - Grey Communications Group

Affiliate

Puerto Rico - Wing Latino Group

Wholly Owned

Venezuela - Strategic PR Group

Affiliate

 

 

Asia-Pacific

 

Agency Location

Relationship

Australia - Blackie McDonald (Melbourne)

Affiliate

Australia - Blackie McDonald (Sydney)

Affiliate

India - GCI India

Wholly Owned

Japan - GCI Sun Pub

Affiliate

Korea - Shinhwa Communications

Affiliate

Malaysia - GCI Malaysia

Wholly Owned

Singapore-Blackie McDonald

Affiliate

 

 

Europe

 

Agency Location

Relationship

Belgium - PRP Public relations Partners

Affiliate

Czech Republic - GCI Prague

Wholly Owned

Croatia - GCI Zagreb

Wholly Owned

Denmark - GCI Mannov (Aarhus)

Partner

Denmark - GCI Mannov (Copenhagen)

Partner

Estonia - Inorek & Grey AS

Affiliate

Finland - GCI Finland (Helsinki)

Wholly Owned

France - GCI Groupe Grey (Paris)

Wholly Owned

Germany - Hering Schuppener (Dusseldorf)

Affiliate

Germany - Hering Schuppener (Frankfurt)

Affiliate

Greece - GCI Athens

Wholly Owned

Hungary - GCI Budapest

Wholly Owned

Iceland - GCI Iceland (Reykjavik)

 

Ireland - CARR Communications (Dublin)

Affiliate

Ireland - GH Communications (Dublin)

Affiliate

Italy - Cohn & Wolfe (Milan)

Affilliate

Latvia - Havera PR (Riga)

Affiliate

Lithuania - Havera UAB (Vilnius)

Affiliate

Netherlands - GCI Holland (Amsterdam)

Wholly Owned

Norway - GCI Monsen (Oslo)

Wholly Owned

Portugal - Grey Lisboa

Wholly Owned

Portugal - YoungNetwork Marketing e Comunicação

Affiliate

Poland - GCI Warsaw

Wholly Owned

Romania - Grey Worldwide Romania

Affiliate

Spain - Cohn & Wolfe (Madrid)

Affiliate

Slovakia - Media in PR

Affiliate

Slovenia - GCI Ljubljana

Wholly Owned

Sweden - GCI Stockholm

Wholly Owned

Sweden - GCI Gothenburg

Wholly Owned

Sweden - GCI Mannov Malmo

Partner

Switzerland - Cohn & Wolfe (Geneva)

Affiliate

Turkey - GCI Istanbul

Wholly Owned

Ukraine - GCI Kiev

Wholly Owned

United Kingdom - GCI London

Wholly Owned

 

 

Africa

 

Agency Location

Relationship

Nigeria - The Quadrant Company (Lagos)

Affilliate

South Africa - GCI Africa

Partner

 

 

Middle East

 

Agency Location

Relationship

Israel - Stern-Ariely PR (Tel-Aviv)

Affiliate

Lebanon - Grey Beirut

Affiliate

Saudi Arabia - Attariq Communications (Riyadh)

Affiliate

United Arab Emirates - Headline PR (Dubai)

Affiliate

What offices opened in 2006 or early 2007? (State when)
N/A

What offices closed in 2006 or early 2007? (State when)
N/A

Which regions, US and globally, are growing, and why?
We saw growth throughout the US fueled by a strong leadership team already comprised of several GCI veterans including Jake Drake, President, GCI California (13 years), Jill Dosik, EVP, GCI Healthcare (13 years), Jeff Hunt, CEO, (six years), John Pyne, CFO (six years), and Susan Pagano, SVP, Marketing/New Business (six years). The injection of new and diverse star talent brought great depth to the team including ad agency legend and former senior executive at Chiat/Day and McCann Erickson, Joel Babbit, as Chief Creative Officer; 17-year agency veteran, Stephanie Marchesi, as President, GCI New York; Donna Fleishman, the PR wiz behind the launch of the Georgia Aquarium as President, GCI Atlanta; 15 year-agency veteran and former Ketchum executive, Kiersten Zweibaum, EVP, Corporate, former Edelman and Ogilvy executive, Andrew Silver, EVP, Consumer Practice; and former e-commerce company CEO and ten-year veteran of Accenture, Paul Walker, EVP, Digital Media.

We continue to have one of the most robust and talented European networks under the leadership of European Chairman, Steffen Luders, a long-standing veteran of GCI. Specifically, we are market leaders in the Nordics as well as Germany. Our London office continues its revitalization under the leadership of Mark Cater, appointed president following a distinguished career with Ketchum.

We continued to invest in our commitment to digital media with the global expansion of the practice, which has resulted in significant incremental growth with such clients as Dell, Merck, RadioShack, Pringles and Whole Foods. We formalized a global network of creative experts, referred to as the Imagination Board, who are enhancing our approach to creative ideation without media parameters. What we call "media neutrality." We also launched Interactive Entertainment, Sports Marketing and Sustainability specialties to capitalize on our expertise and client experience in these areas.

All of these moves resulted in strong momentum with existing clients and notable key new business wins including Darden Restaurant Group, Nike, Seventh Generation, Garmin, Genentech and Berlex

Practice areas

How many practice areas do you have? Please list.
Healthcare, Consumer Marketing, Corporate, Media Relations and Digital Media

Which ones are new?
None

Of those, which ones are part of the core strategy of the agency?
Every single one of our practices is integral to our growth strategy which focuses on four key priorities:

  • Delivering big ideas
  • Managing the digital media evolution
  • Staying brilliant with the basics
  • Making a measurable impact on our clients business

Which practice areas have been phased out in the past year?
None

What practice areas showed the most growth?
GCI healthcare remains one of the most competitive and leading edge practices of healthcare in the public relations industry with marquee clients such as Merck, Genentech, Forest Labs, Boehringer Ingelheim and Medtronic.

We saw consistent levels of growth across all our practices reflected in some of the most highly contested new business wins in the industry - Nike, Darden Restaurant Group (Red Lobster, Smokey Bones, Seasons 52, Bahama Breeze and Olive Garden), Seventh Generation, Genentech, and Berlex. We infused our digital offering into virtually every client engagement and brought a new breed of creativity that recognizes no boundaries for big news ideas.

What is the distribution of accounts across practice areas?
Healthcare - 40%
Corporate - 20%
Consumer - 20%
Other - 20%

Accounts

27) What key account wins did you have in 2006? If based outside the US, or are global, please state regions.

  • Darden Restaurants (Red Lobster, Smokey Bones, Seasons 52, Bahama Breeze and Olive Garden)
  • Nike
  • MetLife
  • Genentech
  • Berlex
  • Global 360
  • Citigroup
  • Morgenthaler Partners
  • NetSpend Network
  • Georgia Tech
  • Zest
  • Garmin
  • Mr. Gatti's Pizza

Of your 2006 wins, how many were across three or more countries?
N/A

What key accounts did you lose in 2006? If based outside the US, or are global, please state regions.\

  • InterContinental Hotels Group
  • Cingular - result of ATT acquisition of Bellsouth
  • Intel - lost due to a planned consolidation within WPP family

Did you expand any existing accounts into new domestic or international markets or sectors?
None stated

What proportion of your clients are on a retainer?
N/A

Has this changed over the past year?
No

Performance

What was your 2006 global (including US) revenue?
Agency declined to give information

What was the % change over 2005 global revenue?
Agency declined to give information

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

If you are unable to supply exact revenue, please indicate which range your global revenue falls into:
In keeping with the financial disclosure policies of our parent company we are uable to disclose this information.

What was your 2006 US revenue?
Agency declined to give information

What was the % change over 2005 US revenue
Agency declined to give information

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?
GCI experienced both top and bottom line growth that fully met our expectations.

How much of your growth was organic, and how much was due to new business won?
We proudly acknowledge the impact of our long-term and still growing client relationships with Boehringer Ingelheim (eight years), Forest Labs (14 years), Eli Lilly (4 years), Pioneer (eight years), RadioShack (seven years), Dell (six years), Starbucks (six years), Shell (four years) and Payless ShoeSource (five years).

In additional to strong organic growth, our new business wins were among the most contested and sought after wins in the industry. Included among them is all the consolidated business of Darden Restaurant Group as well as Nike and Genentech.

How did your performance, in terms of revenue and growth, meet expectations you had for the year?
2006 brought the most substantial growth for GCI in the past 5 years in large part due to our continued focus on delivering measureable impact, worldclass creative, and digital media expertise. Key hires in the areas of digital media and creativity and the cohesiveness of our senior management team were also contributing factors. GCI continues to be recognized as having one of the most collaborative and collegial cultures in the business.

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.
2006 marked GCI's first full year under the leadership of Jeff Hunt and the firm's position within the WPP family. The momentum generated over the course of the year reflects the seamlessness of both these transitions. It is also speaks to the ability of GCI's senior leadership team to drive its four strategic priorities for growth and a commitment to developing a culture of high performance and collegiality.

GCI held its bi-annual GCI Global Forum in April and brought together 100+ leaders from around the world for a customized professional development program about navigating change. GCI European network leaders gathered for their annual Best Practices Fair, designed to further the agency knowledge sharing practices. GCI continues to recognize individual performance excellence through its annual, global Spirit Award program and throughout the GCI network there is a common thread of local community service ranging from individual employee volunteerism to office-wide community service activities.

GCI delievered on average 50 hours per employee of professional development, using both internal and external resources. We maintain a robust internship program that includes substantial outreach to major universities in every market and approximately 60% of our entry level hires come through some form of internships.

In summary, GCI's strong leadership, defined strategy and collegial culture are the foundation upon which great work and great client service is executed every day around the world.

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