Waggener Edstrom: Agency Business Report 2011

The roots of Waggener Edstrom's performance last year lay in investments it was able to make in 2009, says president and CEO Melissa Waggener Zorkin.

Principal: Melissa Waggener Zorkin, president and CEO
Ownership: Independent
Subsidiary agencies: Maloney & Fox
Offices: 18 wholly owned globally; 8 in the US
Revenue: Global: $111,910,000; US: $99,786,000
Headcount: 845 globally; 659 in the US

The roots of Waggener Edstrom's performance last year lay in investments it was able to make in 2009, says president and CEO Melissa Waggener Zorkin.
 
 
"In 2009, our independence enabled us to invest and ramp up when others were scaling down, so 2010 became a very good year," she explains. "Our business plan was on target; the practice groups we invested in during 2009, such as healthcare and Studio D, showed a return on that investment."
 
Senior management also systematically went office by office to identify where they needed to beef up resource. This led to key 2010 hires, including Michele Clark as SVP, corporate practice lead in New York, and Lisa Allen as SVP, tech practice GM in San Francisco. Jenny Moede was promoted to EVP, North America region and Jennifer Houston became president and global lead of the WE Studio D digital group.
 
Torod Neptune, SVP and global public affairs leader, left to join Verizon, and Michelle Herman, SVP and global tech and practice leader in San Francisco, left to lead Bite's North American business.
 
2010 was a huge hiring year for the firm, especially Studio D, where revenue grew 17%. Staff turnover in 2010 was 5%, up slightly from the prior year. Global headcount was up 69 on 2009, with 31 of that increase in the US. US revenue was up 5% in 2010, from $94,599,000 to $99,786,000; global revenue was up a bit more at 5.9%.
 
Much more than Microsoft
Microsoft is clearly a vital component of the firm's business, but Zorkin refutes charges of overreliance on it by explaining it is rather "a series of accounts nested together with a common vision of where we stand on marketing." Waggener Edstrom is global AOR for Microsoft and does corporate work for it, but Zorkin says when an RFP was issued for the healthcare division, her firm had to pitch like any other, though it did win anyway.
 
Other 2010 wins for the firm included Toshiba America Info Systems, Kingston Technology, and Brookfield Properties.
 
"Diversification is a very healthy goal for us," Zorkin says. "But if you examine the mightiness of the Microsoft account, it means that even if you grow diversification by 20% to 40%, it's still going to take a long time to catch up with one of the largest marketing powerhouses on the planet."
 
She is watching the situation closely at another agency client, T-Mobile, which is the subject of an acquisition bid by AT&T, but for now it is business as usual. Waggener Edstrom claims not to have lost any major accounts in the US, though it reduced its work with GlaxoSmithKline in the UK.
 
A champion of independence
Zorkin is pleased to see more firms valuing independence and leaving agency holding groups. "I'd like a bigger universe of CEOs who run independent companies," she says. "Our independence had a lot to do with our success in 2010."
 
Her one area of disappointment was a lack of blue sky dreaming. "What are the big moves? We need to spend more time thinking about ‘What if?'" she says. "We opened up in South Africa and India last year when everyone else was hunkering down – and we are going to make some bold moves geographically in 2011."

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