Waggener Edstrom: Agency Business Report 2014

Waggener Edstrom had a challenging year.

CEO and president Melissa Waggener Zorkin
CEO and president Melissa Waggener Zorkin

Principal: Melissa Waggener Zorkin, president, CEO, and cofounder
Ownership: Independent
Offices: Global: 19; US: 7
Revenue: Global: $117,608,000; US: $98,270,000
Headcount: Global: 828; US: 567

Waggener Edstrom Communications had a challenging year with its US revenue dropping 3% compared with 2012 and global revenue decreasing 0.7% from the previous year. Those numbers were down from 2012 when it grew by 2.3%, but missed its financial metrics.

CEO Melissa Waggener Zorkin described 2013 as "a tough learning year" as the agency worked to further diversify offerings in terms of client base and the geographies it operates in. The firm is focused on "building a resilient machine that is not dependent on any two or three things to be successful," according to its CEO.

The agency, which Waggener Zorkin says is "fiercely holding on to its independence," has four global practice areas: consumer, healthcare, social innovation, and technology, with its longtime core strength of technology showing the most growth in 2013.

She called the firm’s history in tech communications a strength, saying it helps when working with clients across various industry sectors.

"I’m not sure there is a product out there now that does not have some sort of technology in it," says Waggener Zorkin. "There are other areas where we have very good business, such as healthcare, and we are doing more thought leadership to get known in those areas," she explains. "It’s fair to say technology is one of the big foundations and growth drivers for us, and we continue to diversify in other areas."

During the year, the firm expanded its work for Microsoft to the Skype business unit, working across North America, EMEA, and Asia-Pacific. It also won accounts from Akamai Technologies in the Asia-Pacific region and Dutch online security company AVG in North America and Europe. Autonet Mobile, which provides auto manufacturers with in-car Wi-Fi hot spots, named WE as its PR AOR in November.

Key losses during 2013 included Canadian Solar’s account in EMEA, Complete Genomics work in North America, and the Seattle Children’s Hospital. WE lost HTC’s PR AOR account in the US to GolinHarris in January 2014. Five-year client T-Mobile also said in February of this year it is reviewing its PR AOR account. Eighty-nine percent of the agency’s clients are on retainer.

The firm brought on a marquee name in the auto sector early this year as WE started working with Volvo as its first AOR, handling lifestyle, brand, corporate, and product communications.

In terms of regional growth, EMEA led the way with a 15% increase, due to strong results in the UK and South Africa, while the firm recorded 11% growth in Asia-Pacific, led by strong business activity in its Hong Kong and China markets. The agency expects to see positive growth for full-year 2014 by this time next year.

High staff turnover
Staff turnover was 31.3% during 2013, with key departures including former chief client officer Claire Lematta; SVP, corporate comms, Scott McLaughlin; editor-in-chief David Patton; Washington, DC, GM Ben Finzel; SVP Annemiek Hamelinck; and healthcare practice co-lead Colleen Beauregard. The number of US staff fell from 675 in 2012 to 567 last year, as the firm laid off 5% of its workforce in October, with most of the 43 job cuts taking place in the Pacific Northwest region.

While the staff eliminations were due in part to reorganizations at longtime client Microsoft, Waggener Zorkin stresses the firm has a "strong set of relationships" with the tech giant and it plans to "walk with them through changes at the company."

In terms of staff turnover, she says voluntary levels are "still better than the industry average."

"When you hire someone, it is about flexibility, responsibility, and accountability," she explains.

The firm trimmed the number of offices in the US from eight to seven – and 20 to 19 globally – when it consolidated the former Maloney & Fox’s New York presence into its own after folding the shop in late 2012. It also made an incremental equity investment in Buchan Consulting in Australia, though it did not make any acquisitions last year.

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