Edelman: Agency Business Report 2014

Edelman crossed the threshold of employing more than 5,000 people in 2013 and continued on its global growth path.

Principal: Richard Edelman, president & CEO
Ownership: DJE Holdings
Subsidiary agencies: Blue, Edelman Berland, BioScience Communications, Matter, Krispr, Edible, and Assembly
Offices: Global: 67 wholly owned; US: 14
Revenue: Global: $740,874,796 (CY’13), $702,535,685 (FY’13); US: $450,349,686 (CY’2013), $429,932,210 (FY’13)
Headcount: Global: 5,175; US: 2,443

Edelman crossed the threshold of employing more than 5,000 people in 2013 and continued on its global growth path, increasing 11.4% organically from $665 million in 2012 to just more than $740 million in 2013. Profit margin was approximately 14% and the US was up 10.9% year over year to $450.3 million.

"We have benefited greatly from a complete integration of our digital and PR businesses," says CEO Richard Edelman.

Edelman’s top 10 global clients are Samsung, Microsoft Xbox, Unilever, HP, Shell, Johnson & Johnson, eBay, Novartis, Starbucks, and Adobe.

"The top 17 global clients now account for 35% of our business," he adds. "If I had looked down this list five years ago, the bulk of clients would be American, but now the only main US ones are Energizer, Humana, and Dairy Management. We have really succeeded in globalizing the business."

During the year, Edelman won accounts including Newell Rubbermaid, Heineken, Tsinghua University in Beijing, and Microsoft stores in China and elsewhere.

Significant organic growth
The agency achieved significant organic growth with Kellogg, Royal Dutch Shell, and SC Johnson. Kellogg was absorbed back into the main Edelman agency from conflict shop Krispr when Quaker Oats transferred to sister firm Zeno.

This January, Edelman launched Edible, a food-and-beverage-focused subsidiary helmed by Kathy Krenger, who previously ran Krispr.

"In technology, the HP account moved from being a tech-marketing client to being a tech-corporate client, and also grew in digital," says Edelman. "Tech is the number one industry for us, followed by health and pharma, then consumer."

In terms of practice areas, corporate was up 38.7%, digital 27%.

While Edelman is "getting good at paid [media]" under the auspices of Chris Paul, hired from VivaKi as global director of paid media, it still only accounts for a small percentage of revenue.

Edelman acquired long-term South Africa-based affiliate Baird’s Renaissance and renamed it Edelman South Africa – founder Francois Baird became chair of Edelman Africa. Staff turnover at the largest PR firm in the world was 19.7%, down from 25% in the prior year. Key hires in the last 12 months include Glenn Engler as director of corporate strategy and global chief of staff replacing Katie Burke, who moved to be global chair of public affairs in June last year, subsequently leaving the agency to join Nielsen in January 2014.

Former head of H+K’s technology practice Joe Paluska came on as global chair, technology, replacing Pete Pedersen; Michael Stewart moved from McKinsey to become CEO of Europe and CIS region replacing Robert Phillips; former DeVries Global CEO Stephanie Smirnov joined as MD of consumer marketing replacing Adrienne Hayes, who moved to Motorola Mobility; and Brian Ellner came on as EVP and group head of public affairs in New York, replacing David Vermillion.

Amanda Glasgow, former global manager on the P&G account at MSLGroup, joined as western region director, consumer; and former mayor of Los Angeles Antonio Villaraigosa came on as a senior adviser, public affairs. Rick Murray, president of the Chicago office, left to be replaced by Jay Porter, EVP and global client relationship manager for the Starbucks account.

In March 2014, GolinHarris tapped Edelman executive creative director Caroline Dettman to run its G4 structure. San Francisco GM Mike Kuczkowski departed in December. Both Edelman’s parents died in 2013. Richard’s eldest daughter Margot, a VP in research at Edelman Berland, rejoined the firm in 2013 after a stint at business school. She works across clients such as Hearst and New York City FC’s Major League Soccer team. Tory Edelman started in fall 2013 as an account executive in New York working on Starbucks and Dove.

"We have really set our camp to compete in a broader space," says [Richard] Edelman. "We recognize that at our size and scale, we have a right to be at the table and can compete with the big ad agencies."

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