Edelman: Agency Business Report 2011

Edelman reports global revenues rose 18.1% to $531.6 million in 2010, a year in which the firm made four acquisitions, hired more than 450 new employees, and won key accounts across its corporate, consumer, tech, and public affairs practices.

Principals: Richard Edelman, president and CEO (l); Matt Harrington, US president and CEO (r)
Ownership: Independent
Subsidiary agencies: Blue, StrategyOne, DJE Science, Matter, Ruth
Offices: 57 wholly owned globally, 15 in the US
Revenue: Global: $531,566,266 (calendar year), $487,224,693 (fiscal year); US: $349,221,558 (calendar year), $321,373,954 (fiscal year)
Headcount: 3,676 global; 2,263 US

Edelman reports global revenues rose 18.1% to $531.6 million in 2010, a year in which the firm made four acquisitions, hired more than 450 new employees, and won key accounts across its corporate, consumer, tech, and public affairs practices.

 
"It's good to be independent," claims CEO Richard Edelman.
 
The agency, which had come off a flat year in 2009, reported double-digit growth in 2010 across all five of its regions in calendar year 2010. Its fiscal year ran from July 1, 2009, to June 30, 2010, where revenues were impacted by a still-struggling economy.
 
Global account wins include the Brazilian Ministry of Tourism, Harley-Davidson, MetLife, and Wrigley to support its global Benefits of Chewing program. Edelman says during 2010 more than one-third of his agency's clients were serviced across three or more countries.
 
The US generated $349.2 million in revenue in 2010, rising 21% compared to 2009, as it netted wins with Campbell's Soup, Best Buy, Levi Strauss, Genentech, Western Union, and Volkswagen.
 
Edelman saves some of his highest  praise for the San Francisco office, calling it "nothing short of spectacular" after reporting 60% growth over the prior year.
 
Digital in demand
The firm's digital practice, which is digital AOR for Ben & Jerry's and RIM, grew 121%, in part because digital is an integral component in almost every program at the agency. Edelman notes that a large part of the firm's growth, including its digital business, stems from existing clients.
 
"The big stories in the US are digital, where it's now between 12% and 15% of fees, and we're competing with digital firms," Edelman adds. "Increasingly, we're also finding we're doing both marketing and corporate for clients."
 
In 2010, Edelman supported the launch of Microsoft's Xbox Kinect in 30 countries. He also noted the firm's work with the Pepsi Refresh Project and its multimillion-dollar global AOR win with Hilton Worldwide in the first quarter of 2011.
 
"PR is definitely getting a higher share of whatever spend there is," says Edelman. And while consumer remains the largest part of its business, he adds corporate and public affairs are showing strong growth.
 
The firm stopped working with Bausch & Lomb – sister agency Zeno Group took over the vision-care business at the start of the year – and Getty Images in 2010.
 
Additions to the family
Edelman acquired firms in many key markets – The Centre in Brussels, Significa in Brazil, Texas' Vollmer PR, and Hinfelaar PR in The Netherlands. Total acquired revenue for 2010 was $6.5 million.
 
It also launched DJE Science, a science-based specialty offering, integrated marketing unit Ruth, and opened a Dubai office.
 
Hires included Carol Cone, MD of brand and corporate citizenship; Steve Schmidt, vice chair of public affairs; and Michael Slaby, EVP and global practice chair of the digital practice. JP Schuerman, GM of Los Angeles; Chris Deri, former EVP and director of global CSR and sustainability; and Ethan Rasiel, EVP and GM of the New York tech practice, left in 2010.

As for the coming year, Edelman says the agency is eyeing possible acquisitions outside of the US, notably niche technology or health firms in China and India and digital shops in Europe. He anticipates his firm's digital offering will report double-digit growth in 2011.

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