Cone: Agency Business Report 2007

As evidenced by its A-list clients and double-digit growth, Cone's specialist focus serves it well. Expansion into CSR draws from, and builds upon, its core strengths.

As evidenced by its A-list clients and double-digit growth, Cone's specialist focus serves it well. Expansion into CSR draws from, and builds upon, its core strengths.

"We've purposely taken a relatively narrow focus [and] business model strategy," Jens Bang, president and CEO, says. "We're uniquely positioned because our four disciplines are interrelated. We try to develop depth of talent that allows us to compete at the highest level. We go narrower and deep so we can attract that kind of client base."

Principal: Jens Bang, president/CEO
Ownership: Member of Diversified Agency Services, a division of Omnicom Group
Offices: One, in Boston

Staff
To support new business, staff has risen 20% over the past two years and currently is at 80. Jeff Terry joined from Whirlpool as VP of cause branding. Henk Campher, former director of corporate policy and practices at the International Business Leaders Forum and Oxfam Great Britain policy advisor, became VP of corporate responsibility. Other hires include Brian Reich, new media director, and Jill Tobacco in the brand marketing practice.

Practice areas
Areas include brand marketing, cause branding, corporate responsibility, and crisis prevention and management. All four areas grew, with cause branding and crisis management showing significant improvement. The new corporate responsibility practice, headed by EVP Mike Lawrence, was a "natural evolution" for the agency, a pioneer in cause branding.

Accounts
Cone retained all its clients. New business includes eBay, Toyota, The Home Depot, Pfizer, Western Union, Wal-Mart, Wonka Candy, Deloitte, Mattel, T-Mobile, and OrthoLite. Work with client Starbucks expanded, and Cone launched five cause programs for T-Mobile, CVS/pharmacy, American Heart Association, Highmark, and Gillette.

Financial performance
Cone's revenue is in the under-$50 million bracket, and it experienced more than 20% growth in both revenue and profit. Organic growth was key. "It was probably the best financial year [for] the agency in its history," Bang says. "We believe corporate responsibility will be a business imperative in the future."

Agency's full questionnaire follows below:

Name of parent division/company
Cone is a member of Diversified Agency Services, a division of The Omnicom Group

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)
Jens Bang,
president and CEO

Name of person, if any, the most senior person named above reports to
Thomas Harrison, president and chairman, Diversified Agency Services

What is your current headcount?
80

How has your headcount changed since FY 2005?
While we are not allowed to give specific numbers, our headcount has increased over 20% over the last two years to support our new business growth.

Did you make any senior hires in 2006 (VP and higher)? Please state name, title (and unique responsibilities, if applicable), and previous company
Jeff Terry, VP, Cause Branding
Jeff brings great experience not just in signature cause program development but ultimately in how a company begins with a values driven, philanthropic relationship and cultivates and builds an integrated, multi-functional cause-branded program that is tied to business objectives and results.  Jeff came from the Whirlpool Corporation, where he served as the Director of Corporate Commitment and Strategic Relationships. While there, Jeff strategically envisioned, built and directed Whirlpool's global partnership with Habitat for Humanity International.

Henk Campher, VP, Corporate Responsibility
Henk is the former Director of Corporate Policy and Practices at the International Business Leaders Forum (IBLF) and Oxfam Great Britain policy advisor. He brings more than ten years of experience helping companies in the United States, Europe, Asia, and Africa develop CR strategies.  At the International Business Leaders Forum, a London based non-profit that develops CR policy and strategy solutions for many of the world's leading companies, he worked with corporations including Nestlé, Unilever, Shell, Microsoft, Coca-Cola, Pfizer, Rio Tinto, Diageo, and SABMiller to develop innovative policies and programs in areas such as workforce issues, product responsibility, supply chains, social investment, public policy and stakeholder engagement. 

Brian Reich, director, New Media
Brian works with account teams to develop new media strategies and programs for Cone clients.  Reich will also play a key role in the development of proprietary Cone products and services. Before joining Cone, he was Senior Strategic Consultant and Director of Boston Operations for Mindshare Interactive Campaigns, where he helped many of the leading corporations, nonprofits and government entities leverage the communications opportunities created by technology. He also served as Vice President Gore's Briefing Director in the White House and during his 2000 presidential campaign.

Jill Tobacco, director, Brand Marketing
Jill is a registered dietitian and specializes in food, nutrition and health communications. Her expertise is in creating and implementing strategic campaigns targeting consumers, key influencers, food/beverage industry and health professionals. Prior to Cone, she was a group manager at Weber Shandwick, leading national and market-specific product and health/wellness campaigns for clients including Odwalla, Hormel, The Coca-Cola Company, Eggland's Best Eggs, Ocean Spray and Novartis.

What senior staff have departed the firm? Please state name and previous title
We did not have any senior staff depart over the past year.

Please list any other senior management changes, including restructures and significant, senior-level promotions
No senior management changes or senior level promotions over the past year. In terms of restructuring for future growth, we strengthened our New Media capabilities, created a fourth practice area - Corporate Responsibility and formalized the work we do around cause branding for nonprofits.  Details on these are highlighted below.

Have you made any acquisitions in the past year, or merged with another agency?
Cone did not have any acquisitions or mergers in 2006.

How many wholly owned offices do you have globally? Please list with agency names and cities under the following headings.
We service a national and international client base form our home base in Boston, MA.

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

Practice areas

How many practice areas do you have? Please list.
Cone has four practice areas - Brand Marketing, Cause Branding, Corporate Responsibility and Crisis Prevention & Management.

Which ones are new?
Corporate Responsibility (CR) is the newest addition to the agency and is headed up by Cone EVP Mike Lawrence. He has been with Cone for nearly 10 years and is an award-winning former business journalist with 25 years of news experience and a decade of crisis and issues management work, advising clients on areas including governance, human rights, stakeholder engagement, and communication.

Establishing a Corporate Responsibility practice was a natural evolution for the agency. Cone pioneered the concept of Cause Branding, and has more than a quarter century of experience linking companies and social issues. The agency also has extensive experience in marketing communications and issues/crisis management, all of which have provided a foundation for CR work. The discipline was tailored to help companies integrate corporate responsibility and communications strategies to build business value and reputation. The services are structured to provide multiple paths for a company to get involved with CR at a critical time for business.

Cone believes CR is about opportunities and business benefits-not merely compliance or obligations. It can affect operational concerns including governance, environment, and supply chain, as well as employee, customer, and community relations. CR helps companies create innovative solutions, ranging from the creation of new products to ensuring license to operate.  Cone's approach of combining CR strategy and communications enables clients to manage and improve their impact and align corporate values and behavior with the expectations and needs of stakeholders, including employees, activities, communities, and investors. All of this is done in a way that builds both business returns and relationships.    

Of those, which ones are part of the core strategy of the agency?
Our business strategy is narrowly focused by design and we offer a unique mix of core disciplines that are inner-related and critical to our growth plan.  Rather than being everything to everyone in terms of offering a multitude of capabilities, we have focused on four key competencies.  Our sweet spot is helping organizations build trust among all of their stakeholder groups and we remain committed to our steadfast mission of enhancing a client's reputation, helping to build their brand equity and ensuring their success in an increasingly savvy and complex marketplace.

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

What practice areas showed the most growth?
Our Cause Branding discipline continued to show significant growth but all four of our practice areas experienced growth over the last year.

Brand Marketing:  
Cone's Brand Marketing practice has been part of Cone's DNA since its inception more than 25 years ago.  Over the past two years, the practice has experienced double digit growth.  Last year, the group launched major national product introductions and campaigns such as Nestlé Waters North America's new Aquapod bottle to US consumers.  We also developed an integrated program to help Lindt USA build its leadership position in the premium chocolate category and reinforce its Swiss heritage and expertise.

The Brand Marketing Group also continues to build its influencer marketing capability. We completed our first successful year of proprietary influencer marketing for Nestlé Waters North America and developed and launched a proprietary influencer marketing fulfillment website for Contrex (a Nestlé Waters product).  In addition, our newly dedicated New Media practice, headed up by Brian Reich, leverages emerging trends in new stakeholder communication vehicles such as user-generated media, influencer marketing, social networking and viral communications.

Cause Branding:
Cone is widely viewed as the thought leader in the world of cause marketing.  Our groundbreaking research, conducted over the past decade, has shed light on consumer perceptions, corporate attitudes and non-profit positions regarding Cause Branding and its impact on consumer and employee behavior.  Our staff is widely sought after to lecture across the country (29 speaking engagements in 2006) and even overseas, educating executives about the power and importance of cause marketing.

Last year, we launched the 2006 Cone Millennial Cause Study. This first in-depth study of its kind showed that 61% of Millennials, born between 1979 - 2001, feel personally responsible for making a difference in the world.  This civic-minded generation, 78 million strong, not only believes it is their responsibility to make the world a better place, they (78%) believe that companies have a responsibility to join them in this effort. 

In addition, we formally announced the expansion of our Cause Branding for Nonprofit services.  We have been providing counsel and developing signature programs for nonprofits, such as the American Heart Association, for a number of years but we now offer nonprofits an enhanced menu of customized short- and long-term strategy-based and integrated marketing service solutions including brand positioning and communications; fundraising initiatives; social awareness campaigns; and corporate partnership development and outreach.

In 2006 we launched five signature cause programs:

  • T-Mobile: Huddle Up
  • CVS/pharmacy: All Kids Can
  • American Heart Association: Start!
  • Highmark: Healthy High 5
  • Gillette: Prostate Cancer Challenge

Corporate Responsibility:
As noted earlier, this is our newest practice area.  CR is a critical part of our overall growth strategy. Over the last six months the practice area has done significant CR account work for Starbucks (stakeholder engagement and human rights strategies); a CR report for Mattel; CR and reputation strategies for The Home Depot; and CR strategy and communications for Nestlé Waters North America. The practice is also launching "Activating Responsibility," a blog designed to provide a platform for voicing ideas and fostering dialogue with others passionate about CR. (Activating Responsibility can be found at: http://www.activatingresponsibility.com/blog/.)

Crisis Prevention and Management: 
Cone has partnered with diverse nationwide clients to plan for and manage challenging issues and breaking crisis events since the agency's inception. Our momentum spiked in 2006 and our growth continued with clients retaining us as agency-of-record as well as approaching us for project work. The practice has also experienced growth by client cross-selling through existing Cone clients.  New business wins in this practice included: Outward Bound, CVS/pharmacy, Bird's Eye Foods and others.

Accounts

What key account wins did you have in 2006? If based outside the US, or are global, please state regions.
Key account wins in 2006 included the following:
ebay
Toyota
The Home Depot
Pfizer
Western Union
Wal-Mart
Wonka Candy
Deloitte
Mattel
T-Mobile
OrthoLite
Aquapod (Nestlé Waters North America)
Safe Horizon
Sodexho
Starbucks (expanded work into another practice area)

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.
Cone did not lose any accounts in 2006.

What proportion of your clients are on a retainer?
Unfortunately, we are not allowed to answer this question.

Performance

If you are unable to supply exact revenue, please indicate which range your US revenue falls into:
Cone's revenue falls into the less than $50 million category.

Did you experience top-line or bottom-line growth in the past year, or both? How did your performance, in terms of revenue and growth, meet expectations you had for the year?  
While we are not allowed to disclose specifics, we are able to say that we experienced solid financial performance in 2006 with significant revenue and profit growth in the double digits.  Key to this has been our success with organic growth. We are also forecasting double-digit growth again this 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.
Staff development/training is critical at Cone and "Continuous Learning" is one of our core values.  Some of our initiatives include the following:
Staff Development

Cone College

Cone College is a structured training program for all employees that offers a year-round schedule of mandatory and elective courses.  It is designed to inculcate our staff with the highest level of knowledge and expertise so they are able to consistently deliver results that surpass our clients' expectations.  The courses are taught both by in-house experts and external professionals.  In a given year, 13 or more core curriculum courses and as many as 15 electives are offered.   Course topics can range from "Branding 101" to "Knowing Client Objectives" to "Running a Crisis Drill" or even "Power Pitching the Media." 

 

Lunch and Learn

Lunch and Learn is a program developed to supplement our internal training program.  Lunch and Learn sessions are a chance to share information about account work throughout the organization.  Each session showcases a recent client work for information sharing and learning.  

Giving Back

Hours for Good

Providing a culture for our employees that is in alignment with our values is critical for Cone.  We accomplish this in several ways: First, in our dedication to living our values every day in the way we work with each other; and second, in our offering an extensive and structured employee volunteer program that we call "Hours for Good."

"Hours for Good" is our active commitment to strengthen our communities and enhance the capacity of nonprofit organizations to achieve their social missions. Through "Hours for Good," Cone employees apply their expertise and lend resources to our communities in the following ways:

  • Hour Time - Each Cone employee is encouraged to spend up to four hours a month volunteering for a personal project on company time - one of the industry's most robust volunteerism policies
  • Hour Teams in Action - Cone regularly undertakes a company-wide community service project to meet a local need
  • Hour Counsel - Throughout the year, Cone team members provide professional counsel to select nonprofits, lending their Cause Branding and marketing communications expertise for key issues or small projects
  • Hour Goods - On a regular basis, Cone collects office supplies and donates them to a recycling center for Boston public schools
  • Hour Voice - Each year, Cone shares its research and expertise with nonprofit and business audiences in Boston and around the world, guiding them to action.
  • Hour Connections - Cone maintains memberships and relationships with leading community service organizations, including President Bush's Business Strengthening America (BSA), Business for Social Responsibility (of which Cone is a founding member), Boston College Center for Corporate Citizenship, and the Corporate Volunteer Council of Greater Boston (CVCGB)

Over the years, we have participated in large-scale company-wide volunteer efforts as a way to make significant contributions to our community and as team-building activities within Cone. 

Among the projects we have undertaken, we:

  • Financially sponsored and helped to build a Habitat for Humanity house in a Boston community
  • Donated nearly $60,000 in staff time to help Cradles to Crayons, a nonprofit dedicated to homeless and low-income children, raising over $1 million through an event with President Bill Clinton
  • Spent a day working in a community farm and an elementary school in one of Boston's poorest neighborhoods

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