Principals: Guillaume Herbette, CEO; Ron Guirguis, CEO, US; Jason Frank and James Parsons, joint UK CEOs, UK; Fabrice Fries, president, France; Pascal Beucler, chief strategy officer; Glenn Osaki, president, Asia
Ownership: Publicis Groupe
Group agencies: Kekst and Company, PBJS, Qorvis MSLGroup, and Salterbaxter MSLGroup
Offices: Global 100; US 15; UK 1; APAC 32 wholly owned, 15 partner
Revenues: Global $450m to $500m; US $150m to $200m; UK £29.5m (estimate); APAC $140m (estimate)
Headcount: Global 3,025; US 625; UK 225; APAC 1,200
It was another tumultuous year in 2015 at Publicis Groupe’s PR arm MSLGroup, especially in the U.S. In September, Edelman New York corporate and public affairs leader Ron Guirguis became the fourth person in just over three years to head MSLGroup’s U.S. operations.
Paul Newman, former North America president, left at the beginning of August after less than 18 months. CFO Peter Miller stepped in until Guirguis made the short hop from Edelman in downtown Manhattan. Miller subsequently transitioned to a new role at sister Publicis firm as CFO of DigitasLBi.
Guirguis reports to MSL’s global CEO Guillaume Herbette, who took on his role in August after serving as global vice chairman of operations at FleishmanHillard. Herbette had worked at Fleishman since 1998; Guirguis also spent 13 years at the Omnicom Group firm. Herbette succeeded Olivier Fleurot, who stepped into an SVP role at Publicis Groupe.
Herbette reports to Publicis Worldwide CEO Arthur Sadoun, who took on supervision of MSLGroup in 2015 and was subsequently named leader of Publicis Comms, part of a restructure of Publicis Groupe into four solutions hubs effective January 2, 2016. The unit also boasts Publicis Worldwide, Leo Burnett, Saatchi & Saatchi, BBH, Nurun, and Marcel.
Newman’s short-lived spell began when he took over from Renee Wilson, who herself only spent 18 months leading MSL North America. Wilson reverted to chief client officer on Newman’s appointment and left MSL in December after 12 years to head up the PR Council.
Other senior MSL departures in 2015 included global corporate and brand citizenship practice lead Scott Beaudoin; North America consumer practice director Denise Vitola; global social media and digital lead Stephanie Agresta; global digital and social strategy director Matt Dickman; digital practice leader Leslie Campisi; global tech practice director Bryan Scanlon; SVP of insights and analytics in North America Allan Dib; and chief communications officer Trudi Harris.
Overall U.S. staff turnover was about 25% and MSLGroup finally settled its longstanding gender discrimination lawsuit against the firm by more than 100 female employees.
Single-digit growth, despite problems
The agency still managed to grow 3% organically in the U.S., 5% globally. It won big with its contribution to Procter & Gamble’s Always #LikeAGirl activation and scored a second-successive Campaign of the Year award at the PRWeek Awards 2016 with Similac’s Sisterhood of Motherhood for Abbott.
Guirguis undertook a 90-day learning-and-listening tour to inform his strategy.
"MSL’s 2015 and first part of 2016 is a total transformation of the business," he says. "We have a new structure, American leadership, CEO, and investments in consumer, corporate, and integrated capabilities." He admits it was scary for some people: "There will be folks who decide it’s a little too much, or yet another step after several challenging years in the U.S. Some amazing talent has left and we’re sad to see them go."
Guirguis attempted to engage existing staff and give them something to believe in, borrowing the phrase "radical transparency" from former boss Richard Edelman. "I believe in hiring great people and treating them like adults," he explains. "Don’t B.S. them. Radical transparency is a great turn of phrase and an even more important belief system."
He resolved not to "sugarcoat" anything or "spin people who do PR for a living."
"This company has amazing bones," he notes. "Blue-chip clients from P&G to GM, Comcast, Microsoft, and Abbott, to Netflix, Home Depot, UTC, and Nestlé that our competitors would love to have."
He says initial signs are promising and 50 new associates have already signed on in the U.S., more than 15 at SVP or higher. Rema Vasan joined MSL’s consumer practice as global client engagement director this year from Pfizer. Danielle Dunne and Catherine Merritt came on from InVentiv Health and Olson, respectively. Other newcomers include former Cohn & Wolfe SVP Sacheen Cicero, Julie Jack-Preisman
from APCO, and Joe Crisci from Joele Frank. Last month, Danielle Wuschke joined from FleishmanHillard to run MSL Boston.
"It was an extraordinary last half of 2015," Guirguis adds. "We went into 2016 with the strongest pipeline we’ve ever had, a built-out leadership team, real investments, and capabilities across core offerings and new technologies."
New clients included the Alzheimer’s Association and Jenny Craig. P&G reviewed all PR support in 2015 and MSL was one of five firms into which work was consolidated. "We’re pleased as it significantly strengthened our relationship with P&G," he adds.
This year GM also reviews its PR, consolidating to one firm per brand. "We’re invited to pitch all of them once the RFPs come out," adds Guirguis. "There is a very strong value proposition with the alignment with [GM’s brands and Publicis’] creative agencies."
In March this year, Publicis merged MSLChicago with sister firm Leo Burnett’s reputation and comms practice to create a new integrated offer, one effect of Publicis Communications’ new integrated structure that excites Guirguis: "It’s already resulted in half a dozen seven-figure opportunities with our sister ad agencies and a big list of requests for conversations."
UK & EMEA
"A year of two halves," is MSLGroup chief executive Guillaume Herbette’s diluted summary of the EMEA performance of the PR network in 2015 – a year in which Asia and the Americas performed better, and grew faster.
Herbette explains: "The business was reorganised in the first quarter, so we had a significant decrease of revenue in the first half, but because the business was reorganised and with key hires in the second and the third quarters in some countries, the business had a big turnaround in the fourth quarter. 2015 was not as good as 2014 – the trend was first two quarters down, third quarter flat and fourth quarter up."
One of those key hires was Herbette himself. Following 17 years at FleishmanHillard, most recently as global vice-chairman of operations, Herbette joined MSLGroup in late August, succeeding Olivier Fleurot who had led it since 2009. Fleurot remains a Publicis SVP – and in 2015 MSLGroup's chief financial and chief talent officers also moved out on to Publicis roles. MSLGroup is now overseen by Arthur Sadoun, the Publicis Worldwide CEO who in a year-end reorganisation of the group was named leader of the Publicis Communications hub, which also includes the group’s ad firms.
Herbette picks out four markets that "we performed really well in" during 2015, with growth of more than 10 per cent – Germany, Poland, the Netherlands and Switzerland. He adds that Italy "had a great year" but fell just short of double-digit growth.
High-profile client wins included Uber in Germany, Instagram in Italy, Lockheed Martin and Amazon in Poland and Randstad in the Netherlands, the recruitment giant’s home market.
"The UK was challenging because we completely reorganised the business; the Nordics was reorganised later in the year, but it paid off in the last quarter," he says. However, he adds that the single "most exciting" bit of new business for the firm was expanding its work with EY in the UK, saying it is now the firm’s "most important" client in the country. The year also saw UK headcount drop from 250 to 225.
"We also managed to expand our Netflix work to more than 20 countries around the world including Italy, Germany, Spain, Portugal and the UK, while Orange was one of the largest wins of the year in France," says Herbette, explaining that France is counted as part of EMEA rather than its own region for the first time in 2015. Other major French wins included Michelin and Sanofi, while Herbette is particularly excited by the "big opportunity" of new client in France, Lidl.
"We didn’t lose significant accounts. In the UK we had some reductions from Samsung and McDonald’s – that revenue has decreased; and on the financial and public affairs side we used to work for Huawei but we lost that," he adds.
In sector terms, the reorganisation of CNC meant that financial and corporate PR "struggled a little bit in the first half of the year", Herbette says, while consumer – the division that executed the much-lauded and Cannes Grand Prix-winning Always #LikeAGirl campaign – "had a great year, particularly in Germany, Poland, the Netherlands and the UK".
"We also had a very good year on healthcare," Herbette says, pointing to further potential growth following the November hire of former Ketchum London CEO Avril Lee to lead EMEA health.
Other key hires highlighted by Herbette include Ben Curson, formerly of Instinctif and H+K, arriving as MD for CNC in the UK in September. At the end of the year it brought in new directors Blair Metcalfe and Sarah White, of Ogilvy PR and Halpern respectively. There were also new additions to 2014 acquisition SalterBaxter, which Herbette says is "a world leader in sustainability" and a "growth driver". In addition, Poland CEO Sebastian Hejnowski became CEO for the company's Central & Eastern Europe operations in September, and after chief comms officer Trudi Harris left to start her own business, she was replaced by internal hire Michael Echter.
Having only been in the role since late August, it will be in 2016 that Herbette can really stamp his mark on the business. Since the start of the year, EMEA president Anders Kempe has moved into a senior adviser role, although Herbette says this was a personal decision and unrelated to December’s integration moves by the parent company.
That integration – alongside the group’s new Conversation to Commerce tool, which translates earned media into revenue value – provides Herbette with opportunities. "If you look at the top 30 clients of Publicis Communications, we the PR network only work with eight of them, so that tells you something in terms of opportunity," he says, adding that this opportunity has given him the challenge of honing the firm’s new business capabilities.
Global expansion is another priority for 2016, following the February 2015 acquisition of Epic Communications in South Africa. The group is targeting Africa for further acquisitions, while Russia, Turkey and Dubai are also on Herbette’s hit list.
With growth mostly in double digits across all of MSLGroup’s practices in Asia, its no wonder APAC president Glenn Osaki is feeling good.
"We saw good growth globally, but Asia was our best performing region bar none," he says. "Revenue grew in every market we operate in, and all had significant margin improvements."
The agency is reticent about giving exact financials, but in Asia it says revenues were between US$100-150 million, and Osaki says more specifically "in the upper-most level of that range".
He is particularly pleased with the firm’s performance in Taiwan, which in 2015 was the Asia group’s fastest growing practice. Other strong markets also include China and Japan, while in India Osaki says the quality of the work and clients was impressive, including the likes of Uber and Coca-Cola.
Osaki is particularly keen on the stat that revenue per headcount at MSLGroup Asia increased by 17 percent, showing that across the board the agency is on a rapid upward trajectory.
Key to this, he says, is the firm’s ability to attract new clients. "If you’re going to grow like we have, you have to win new business," he explains, and the agency demonstrated this with a 33 percent hike in new account wins.
More significantly, the value of those wins was 89 percent higher than in 2014, illustrating MSLGroup’s growing portfolio of high-value clients. Notable wins last year include P&G, Alibaba, Allergan and Netflix, a brand MSLGroup was working with in Japan and then helped with its Asia-wide rollout.
"In some of our larger markets where we have many, many clients, we’ve been able to cut down on some of the smaller, local ones and focus more on the big, global or regional ones," he says, quickly adding that the agency "isn’t losing any important clients"; MSLGroup retained its top 14 clients in 2015.
Moreover, with the wider restructuring at Publicis Groupe that began in 2015, Osaki says the results have so far been positive for MSLGroup as the PR firm has gained access to clients from other agencies within the network.
"With the restructuring we’re working more closely with our sister agencies. Or example, for AXA we’ve taken on a significant amount of business across the region, Nestle, Airbus. These are Publicis clients, and we’re doing more work with them as part of our wider strategy to be more integrated."
The firm’s digital expansion has been the main driver of its growth in Asia, says Osaki.
"We’re seeing more and more that it’s a less traditional game here, it’s much more digital, social, mobile. That has probably been as significant a focus as any for MSLGroup in Asia."
The rewards are being reaped. Digital revenue grew by 35 percent in Asia, and MSLGroup has invested heavily in boosting the digital skills of its staff as part of its i3 methodology.
This included establishing two centres of excellence in Shanghai and Delhi that deliver insights and analytics capabilities across all offices in the region. Of the 462 instances in which the centres have supported MSLGroup teams in Asia, 70 percent were for new business pitches.
"The centres have been a game-changer and are being used by our Publicis sister agencies now," Osaki says. "They have allowed us to become more disciplined in what we do."
MSLGroup continues to enhance its digital offering in Asia and together with the centres of excellence, Osaki says 2015 saw the firm take big leaps forward in providing integrated comms solutions to clients.
"We’re developing tools and techniques based on insights to understand the consumer better. With data and analytics, our agency is becoming much smarter."
Osaki believes such development is critical for PR agencies in Asia, and globally, as the industry landscape continues to change and integrate with other comms disciplines.
"We need to provide better integrated solutions. More and more clients recognise that everyone can create content. There are so many different touchpoints converging," he says.
"This is both the biggest challenge and opportunity for the PR industry. We need to show that what we’re generating has the most value to the client. That’s the area that PR has always been playing in and we need to maintain that and tell great stories."
Conversely to almost all others in Asia, Osaki does not feel talent is as much of a challenge as it used to be. "I’ve noticed now that it’s becoming easier," he says.
He feels the industry has become more valued over time, and the growing trend of agencies recruiting from outside the media space means people with wide ranges of high-level expertise are now more available.
Looking ahead to 2016, Osaki is quietly very confident. MSLGroup already hit the ground running with its acquisition of Arc PR in Sri Lanka, and more is on the way.
"We did a lot of things in 2014 and 2015 to get us to where we are today," he says. "I’m very optimistic about 2016; it’s going to be really big."
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