Principals: Matthew Freud, founder; Andrew McGuinness, CEO
Offices: UK 2
Revenues: UK £28.9m
Headcount: UK 223
Freuds had a strong 12 months for new business and will reap the benefits in 2016, claims global CEO Andrew McGuinness. The firm also reports strong growth in the bottom line in recent years.
The past year has seen Freuds win significant work for McCain’s, Amazon Prime, Lexus, HomeAway and EY, as well as providing strategic counsel to some fascinating new clients such as Uber and male tennis players’ association, the ATP.
Minimal client losses included the Pepsi Beverages UK corporate comms account, although Freuds continues to work for other parts of this longstanding client.
"We held on to our big clients in 2015 but also added a lot of new business," says McGuinness. "That revenue is now coming through in 2016 and it should mean growth in double digits this year."
McGuinness, appointed as CEO by founder, global chairman and all-round PR legend Matthew Freud in 2014, spent much of 2015 helping reinvent the 30-year-old agency. In October Freud was inducted into the PRWeek UK Hall of Fame in recognition of his achievements and innovation over the past three decades. At the time Freud said: "Our profession may not be rocket science or cancer curing, but increasingly it makes a difference in shaping attitudes and behaviour on key issues. We should be proud of what we do, or we shouldn’t do it."
McGuinness says: "Matthew has constantly reinvented Freuds, which is incredible. The aim is always to keep the agency at the forefront of this ever-changing industry. You have to anticipate the needs of clients in the future but ensure you are still serving these clients well right now in order to hold on to revenues. But this year the agency feels as fresh as a start-up. We are 31 years young."
How does he define this strategy of reinvention?
"We aim to be – as Freuds has always been – a modern, progressive PR business," he says. "But the opportunities are now being defined by new disciplines, such as content creation or creative storytelling. Unfortunately none of the labels is adequate to describe the progression of what we do."
Freuds’ headcount grew by only 10 people, to 223, in 2015, but this masks the subtle restructuring taking place. McGuinness explains that natural staff churn enables a realignment of skill sets and some significant hires without a big increase in employees.
2015 recruits included Eleanor Coates from Warner Music as strategy director, Seb Royce as chief creative officer, Giles Pocock as partnership director and Chloe Franses as director of talent partnerships and endorsement.
McGuinness says both consumer PR (approximately 60 per cent of Freuds’ business) and corporate work (now rebranded as The Brewery within Freuds) are changing dramatically in terms of the skills required and the campaigns run.
"We were once perceived as a business focused on celebrities and then one focused on brands. Today we are becoming a corporate agency and a consumer agency. There are similar dynamics and similar rates of growth in both," he says.
But Freuds’ "healthy balance sheet" gives it the cash to expand inorganically as well as organically. Last autumn the firm invested in Proud Robinson, a marketing, events, and content company, taking a 50 per cent stake. It also bought a UK business called Global Cause Consultancy (GCC) outright.
In November, Matthew Freud told PRWeek the firm was "independent and debt-free... [and] reasonably flush", adding: "There are opportunities to find like-minded businesses that don’t want to fold into a global group and don’t want to sell out to a private equity company."
He said the agency was "actively engaged in conversations with a number of businesses to explore what collaboration might look like".
Indeed at the beginning of 2016 Freuds purchased American tech PR firm Brew Media Relations, which has operations in Los Angeles, New York and San Francisco. Freuds took full ownership of Brew with immediate effect. Brew’s clients are primarily technology and digital media companies. The firm offers services including targeted media relations, brand marketing, business development and fundraising support.
It was a return to the US market for Freuds, which closed its failing New York operation in 2009 after only a few years of operation there.
With 20 staffers across the US, Brew continued with its existing operations and now reports to McGuinness. "The Brew opportunity is threefold," he explains. "To bring its clients to London; to help Brew grow further in the US; and to see if we can use Brew’s network and talent to service Freuds’ UK clients in America."
But is this just the first of several major acquisitions for newly cash-rich Freuds? "Possibly, but we are not growing for growth’s sake," replies McGuinness. "We will only buy where it works for us strategically and where we can take consultancies on to a whole new level."