Freuds: Agency Business Report 2015

The independent invested in key areas and boosted its corporate side in order to capitalise on new opportunities across all platforms

Andrew McGuinness: CEO, Freuds
Andrew McGuinness: CEO, Freuds

Principals: Matthew Freud, founder; Andrew McGuinness, CEO
Ownership: Independent
Office: UK 1
Revenues: UK £28.4m
Headcount: UK 213

Matthew Freud dug deep into his pockets in 2014. In July, he acquired a three per cent stake in the floundering Huntsworth Group in a deal thought to be worth around £4m. The investment came as Huntsworth shares traded between 39p and 45p following profit warnings, plummeting from 70p in April 2014.

In the same week, Freud took a minority stake in Seven Dials, the PR agency set up by ex-editor of The Independent Simon Kelner and former adman Andrew McGuinness.

The move saw McGuinness take over the leadership of Freuds from Nicola Howson. The former CEO of TBWA\London and founding partner of Beattie McGuinness Bungay took the reins at Freuds in September 2014.

The agency had a relatively flat year, with fee income growing by just one per cent. McGuinness acknowledges "we’re never happy with a flat year", but adds: "With the pressures in the market at the moment we can live with it. We will be looking for growth from here on in."

The past five years have been "tough for the industry", McGuinness says, and he points out that work is more hotly contested as barriers between marketing, advertising, digital, media and PR agencies blur and ownership of digital, social and content remains up for grabs. "It’s a big focus for us and presents massive opportunities and a threat.

"If you have a good offering, then you get to work in areas that previously wouldn’t be open to you, and we have been able to pick up work in new fields. But it’s the same for everybody and there are definitely more agencies from different disciplines competing for the same work."

McGuinness points to a piece of video content Freuds created in Dubai last year featuring an eagle that was aired on BBC News and got around 250 million views. "You wouldn’t have had that kind of work created by a PR agency just a few years ago," he says.

The small amount of growth Freuds did experience last year came primarily from the agency’s corporate practice, which remains the lesser-known side of the business compared with the agency’s work for big-name consumer and celebrity clients. "We’re well known for our consumer practice but corporate is increasingly big business for us," says McGuinness, adding that the agency’s split of work is now around 35 per cent corporate and 65 per cent consumer.

Big wins for the agency’s corporate practice in 2014 included Cisco, Pearson and global professional services organisation EY. The agency also picked up more work from existing client Diageo and retained its contract with Public Health England for government work including anti-obesity campaign Change4Life. The most significant loss for the agency in 2014 was RBS.

Key hires included former Mischief MD Ben Brooks-Dutton in the newly created role of creative strategy director. McGuinness describes him as "a class act", adding: "Ben has the pedigree and talent to reinforce our reputation for generating breakthrough ideas."

Former CEO Howson remains a consultant to the agency and McGuinness describes their relationship as "very amicable".

Elsewhere, Freuds lost senior creative Steve Strickland to M&C Saatchi PR, while former employee Jo Livingston, who left to work as comms director for Gordon Ramsay, returned.

Looking ahead, McGuinness says the signs are positive for 2015, with new business wins and growth beginning to come through in both corporate and consumer practices. So far the agency has picked up high-profile work for Warburtons Bakery with a campaign featuring Hollywood actor Sylvester Stallone, and been appointed by celebrity chef Heston Blumenthal’s Fat Duck Group to manage external comms and crises.

It also came under fire for promoting fast-food giants Mars, KFC and PepsiCo while retaining the Government’s anti-obesity drive, a situation upon which the agency declined to comment.

Freud himself hit the headlines in October last year when it emerged he and wife of 13 years, Elisabeth Murdoch, were to divorce. Newspapers covered the high-profile split extensively with many focusing on the allegedly turbulent relationship between Freud and father-in-law Rupert Murdoch. Neither Freud nor Murdoch were quoted but most papers reported a line from a "family friend" that "no couple could survive" the pressures they were under.

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