Burson-Marsteller - an optimistic view

After another 'less buoyant' year, CEO Baer proffers an optimistic view with high-profile recruits tasked to deliver an integrated offering

Principals: Don Baer, CEO and worldwide chair (pictured); Kevin Bell, worldwide president; Mike Fernandez, U.S. CEO; and Margaret Key, CEO, Asia-Pacific
Ownership: WPP (part of Young & Rubicam Group)
Subsidiaries: Benenson Strategy Group, BWR, Direct Impact, North of Nine Communications, Pallisades Media Ventures, Penn Schoen Berland, and Prime Policy Group
Offices: Global: 77; U.S.: 13
Revenue: Global: $400 million to $450 million; U.S.: $200 million to $250 million
Headcount: Global: 2,700; U.S.: 930;
U.K. revenue: £15.5 million; Headcount: 120
Asia Revenue: $58 million; Headcount: 850

Burson-Marsteller experienced another year of transition in 2016, and in his full-year financial results statement, WPP group CEO Martin Sorrell once again characterized the Don Baer-helmed agency’s performance as "less buoyant" than its sister firms Cohn & Wolfe, Ogilvy, and Hill+Knowlton Strategies.

WPP’s overall PR and public affairs division posted organic growth of 2.5% across the calendar year, but Burson was flat in the 12-month period.

"We’re pushing the firm through a lot of change and it’s still a time of major transformation," explains CEO and worldwide chair Baer. "We held steady in 2016, but did not grow overall. We had strong performance in Asia, and good performance in EMEA, especially the Middle East, and Latin America.

"In the U.S., we grew in sectors such as technology, healthcare, and corporate, but didn’t grow the way we would have liked in public affairs, or across the region, which is our biggest. When the U.S. doesn’t grow, it levels things out overall."

Certain key clients saw budget cuts, although others grew nicely. "Some test market work with one large client ended, but the work shifted into a more strategic area [with lower billings]," notes Baer.

Consumer-related work with at least one large client shifted within WPP from Burson to Cohn & Wolfe. "Other firms are better at some things than we are, so if we have to shift work elsewhere within WPP, we do that," explains Baer.

Burson-Marsteller worked with Bank of America on the Cutting Through the Clutter - elevating Bank of America to the industry Fintech Leader campaign. The yearlong brand-repositioning effort won a 2017 PRWeek Award for Best Corporate Branding.

Burson’s transition process included some eye-catching hires, promotions, and leavers in 2016 and Q1 2017. Former U.S. CEO Michael Law became worldwide EVP when Mike Fernandez stepped up to the U.S. CEO role in January 2017 after four months at the WPP agency, which he joined from the client side at Cargill, initially as chair of the firm’s global corporate and financial practice.

Law and Fernandez both report to Kevin Bell, who moved across the pond from the U.K., where he was global public affairs practice chair, to become worldwide president of Burson in December 2016.

Implementing organizational change
Other senior hires included former Saatchi & Saatchi and Framestore creative Tom Eslinger, who came on board in January 2017 as the firm’s first global chief creative officer, and Katie Boehret as senior director, core services in November.

"We need to own and drive the changes that are happening rapidly in our traditional stock: integration, digital and social, and content development and creation," explains Baer. "It’s about how we approach the consumerization of corporate reputation; how we deal with crises in new ways; and a range of other things that is the direction for everyone [in the industry]."

Effective May 2, Ramiro Prudencio will be CEO of the firm’s EMEA region replacing Jeremy Galbraith, who stepped down in March after 22 years at the agency. Francisco Carvalho, who had been CEO of Burson-Marsteller Brazil, succeeds Prudencio as CEO of the Latin America region. Prudencio is based in London and Carvalho in São Paulo.

U.S. COO Nicole Cornish exited the firm in January 2017. "We think very highly of her and we’re glad she’s still working with us on a couple of our most significant clients," says Baer.

We need to own and drive the changes that are happening rapidly in our traditional stock

Don Baer

Also in March, Targeted Victory, a Republican-leaning digital marketing firm, brought on Burson subsidiary Direct Impact’s CEO Connie Partoyan as president. This year, EVP Erica Swerdlow also left to become CEO of Wye Communications, jointly owned by former Burson CEO Mark Penn’s Stagwell Group and Finn Partners. U.S. public affairs and crisis practice chair Ann Davison left in July, and U.S. healthcare practice chair David Zitlow moved to Spectrum Science Communications in June. "We needed people with more energy, ideas, and engagement than they were prepared to give at that point," explains Baer. Overall staff turnover was 31%.

Henry Engleka replaced Zitlow as health leader in October 2016; and Helaine Klasky replaced Davison leading public affairs and crisis in January 2017. Kyle Farnham came over from MSLGroup as chair of the firm’s U.S. consumer and brand marketing practice in February 2017. Hillary Clinton’s 2016 chief campaign strategist Joel Benenson became worldwide vice chair, also in January 2017, after his research company Benenson Strategy Group was moved within Burson from elsewhere in WPP in May.

In 2016, Burson acquired Swiss firm TSE Consulting and Effect PR in Turkey. TSE specializes in sports, particularly the Olympics, and international athletics. Effect is a longtime Burson affiliate.

New business-wise, Burson is starting to work on Walgreens Boots Alliance, following WPP’s win of a Team WBA $600 million integrated marketing, advertising, and communications brief across the global retail and wholesale pharmacy business.

See also: PRWeek staff talk with Don Baer about Sean Spicer, the restructuring at Ogilvy, and more

Burson worked hard to reignite its public sector work in the U.S. in 2016, having been "out of it for a number of years," spearheaded by worldwide EVP Chris Foster, who specialized in this type of work while at Booz Allen Hamilton.

New assignments arrived from the U.S. Department of Labor and Veterans Administration, plus more ongoing work with the U.S. Census Bureau.

"We’re seeing a flow of new business, especially in Q1 2017, that is related to our new approach to corporate affairs, crisis, and change management," says Baer, citing ongoing and growing work with existing clients Nestlé Waters, Microsoft, Pitney Bowes, and Qualcomm, and new accounts such as a repositioning assignment at high-tech manufacturer Flextronic, and pre-crisis work with Princeton University and the University of North Carolina.

In the U.S., Burson stopped working with California Pizza Kitchen, New Mexico Health Insurance Exchange, and UnitedHealth Group.

Increased demand in APAC region
China was Burson’s fastest-growing office in 2016, with the firm’s Beijing, Shanghai, and Hong Kong outposts growing "incredibly quickly," driven by demand for integrated digital and social from well-known, longtime clients, as well as new assignments such as Continental Tire and L’Oréal. "[China CEO] Ruby Fu and [APAC CEO] Margaret Key have brought a lot of energy and activity into the region," notes Baer.

The U.K. "grew nicely," especially in the public affairs sphere, driven by the country’s decision to leave the European Union — Brexit — which stimulated work from June onward as clients appraised the scene and looked to seize opportunities made available. Wins included Avaya and British Sugar.

"Overall, there’s some real momentum here [because of] the people we have in place, the way we’re selling differently, and what we’re out there telling clients they need to do, which includes a very integrated approach in our ability to deliver," concludes Baer.

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