Burson-Marsteller: Agency Business Report 2014

Burson-Marsteller's revenue was flat in the US and globally in 2013, but the firm found many reasons for optimism.

Principals: Don Baer, CEO and worldwide chair (pictured); Dave DenHerder, US CEO
Ownership: WPP (part of Young & Rubicam Group)
Subsidiaries: BWR, Direct Impact, North of Nine Communications, Penn Schoen Berland, Prime Policy Group, and Proof Integrated Communications
Offices: Global: 72 wholly owned; US: 14
Revenue: Global: $400 million to $450 million; US: $200 million to $250 million
Headcount: Global: More than 2,300; US: undisclosed

Burson-Marsteller’s revenue was flat in the US and globally in 2013, but the firm found many reasons for optimism, whether it was expanded work with major companies, taking on assignments for Target, or seeing budgets kick in from existing work. The WPP Group firm said it is noticing momentum carry into this year and expects a strong 2014 based on that.

According to CEO and worldwide chair Don Baer, the agency’s 2013 revenue numbers were also adversely affected by an unfavorable comparison to 2012, when it carried out a multimillion-dollar project for congressional Republicans linked to the US presidential election, although it only produced "low single-digit growth" year over year in 2012.

"With big new clients, we might have won them in Q2 or Q3, but a lot of that did not kick in until the second part of the year," explains Baer. "For example, Peabody was a win in September, but we didn’t see a lot of that come into play until the latter part of the year."

Burson’s hallmark account win from 2013 was a vast expansion of its work with Bank of America, which resulted in the financial institution moving up close to the top of the firm’s client list in terms of billings. It also won accounts from TGI Fridays, Monsanto, Dick’s Sporting Goods, the city of Dallas, and New York City’s Transportation Department. More recent blue-chip wins include Amazon on the company’s corporate reputation efforts, Comcast and NBCUniversal on corporate reputation, and handling crisis communications for Target after the major data breach that severely affected the retailer during the 2013 holiday shopping season and beyond.

Consumer and brand marketing, creative services, and healthcare were areas that showed the most growth last year. Burson also merged its issues and crisis group into the public affairs practice.

The firm achieved mixed revenue results around the globe. In Latin America, Burson saw mid single-digit growth, while posting a small decline in revenue, year over year, in EMEA. The Asia-Pacific region reported low single-digit growth in 2013.

After an acquisition spree in 2012 that saw it buy digital management and advocacy firm Crowdverb through its Direct Impact subsidiary, among others around the globe, Burson was quiet on the M&A front in 2013, not buying or selling any firms. Crowdverb was merged into Direct Impact.

Burson shrunk the number of US offices from 15 to 14 after closing a small operation in Houston and merged its Kuala Lumpur office into Malaysian affiliate Essence Burson-Marsteller.

Major hires included US chief strategy officer Thomas Gensemer, who previously worked at fellow WPP firm Blue State Digital; San Francisco-based US president Michael Law, formerly of Ogilvy PR; and West Coast market leader Bill Orr.

The agency also brought on Alan Sexton as its New York market leader and Kevin Bell was named chair of the firm’s global public affairs practice, based in London.

Significant departures included chief global digital strategist Dallas Lawrence, who went to Mattel; global technology chair Lisa Poulson; global brand and consumer marketing practice chair Lisa Travatello; and UK CEO Matt Carter. China CEO Chris Deri and Tony Telloni, New York market leader, also left the agency.

Restructured team
Burson restructured its leadership team in the Asia-Pacific region, naming Pat Ford as regional chairman and Matt Stafford as CEO of Greater China. Christine Jones was appointed Australia CEO and market leader.

Coming off the firm’s 60th anniversary, for which it introduced its Being More global positioning, the agency is also prioritizing investment in staff, especially in the rapidly changing digital and social media areas. Its focus is on bolstering creativity, improving staffers’ digital and social chops, and investing in talent.

"All the old walls are falling down. What used to be the work of ad and marketing agencies that was separated is now difficult to distinguish," says Baer. "There are many kinds of tools and approaches to how we now carry out campaigns. This is a whole different world to understand."

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