Ketchum: Agency Business Report 2014

Ketchum's global revenue increased in the high single digits.

Principals: Rob Flaherty, senior partner, CEO, and president (pictured); Ray Kotcher, senior partner and chairman
Ownership: Omnicom Group, as part of Diversified Agency Services division
Subsidiary agencies: Access Communications, Capstrat, Harrison & Shriftman, MMG, and Zócalo Group
Offices: Global: 78; US: 28
Revenue: Global: $450 million to $500 million; US: $300 million to $350 million
Headcount: Global: About 2,700; US: undisclosed

Ketchum’s global revenue increased in the high single digits, says CEO Rob Flaherty, a strong showing driven by acquisitions in light of parent company Omnicom’s 1.5% uptick in organic PR revenues in 2013.

Last year, Ketchum had three consecutive quarters of double-digit revenue growth that tapered a bit at year’s end. Flaherty called 2013 one of the best new business years in the firm’s history.

Always strong in the brand and food area, the agency saw a lot of wins in the corporate and public affairs space. It netted work with the United Nations High Commissioner for Refugees and the Department of Health and Human Services Centers for Medicare & Medicaid Services, among others.

"You are just starting to see Ketchum as more of a player in the corporate and public affairs sector," adds Flaherty.

Acquisitions last year in Seoul, South Korea, and Singapore – InComm Brodeur and ICON International Communications, respectively – are just the start of a "build-out" in Asia, explains Flaherty, with a goal to "be as strong in Asia as we are in Europe and North America." Bolstering the agency’s Asia network will take shape via acquisitions rather than through affiliates, he adds.

Top performances
Ketchum’s three top-performing areas were Brussels, Moscow, and Washington, DC. The firm’s work with the Russian Federation came into the spotlight in 2013.

Paul Cohen was relocated from New York to Brussels and named director of international corporate and institutional affairs in October 2013. That office landed big brands Cargill and Novartis.

The Moscow office benefited from work around the Sochi Olympics. Flaherty says he is proud of the work his agency did with Marina Maher Communications for Procter & Gamble at the Winter Games and will work with the CPG giant in Rio at the 2016 Summer Olympics.

Both the Brussels and Moscow offices posted double-digit growth. Revenue in the Washington, DC, location was driven by wins such as Clorox In-home Healthcare and Look Good Feel Better, a program benefiting cancer patients.

How the public affairs sector is evolving is on Flaherty’s mind following Ketchum’s acquisition of Capstrat at the start of 2013.

"It was not because we needed representation in as much as there’s a lot of business in the Northeast," he explains. "Capstrat [based in Raleigh, NC] is going from public affairs and PR to fully integrated marketing communications with paid advertising, social and digital capabilities, and content creation. It’s a harbinger of things to come."

Last year, Ketchum also acquired Brandzeichen in Germany, a 60-person brand marketing and social media firm.

Other notable wins were Whirlpool, Merck, StubHub, GlaxoSmithKline, Avocados from Mexico, and Welch’s. About 20% of accounts won were multinational in scope. Best Buy, a former top 50 client, took the majority of its work in-house and pharma company Shionogi selected Lippe Taylor as AOR for its Osphena brand. Ketchum was the incumbent on the account.

Headcount increased 7%. Abby Guthkelch joined as head of digital and social media in the UK; R.P. Kumar joined as EVP of international strategic planning, insights, and research based in New York; Bill Reihl joined from Weber Shandwick as MD of the global marketing practice; and former Ogilvy MD Eryn McVerry was named SVP of integrated marketing.

Departures included Dale Bornstein, former senior partner and director of global practices, who left in September to take the helm at M Booth. Global healthcare practice director Amanda Sefton left to open a winery, while Christiane Schulz, partner and MD of Ketchum Pleon, left for Weber to lead its German office. President and COO Rob Lorfink left to become CFO at holding group DAS in January 2014.

With the economy improving, Flaherty expects the slow recovery for business to continue. He adds that a strong February and March for Ketchum has him "optimistic about the rest of the year."

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