Ketchum - 'real return' on investments

After a couple of transition years, the Omnicom firm sees solid growth and 'some real return on those investments'

Principals: Rob Flaherty, chairman and CEO (pictured); and Barri Rafferty, worldwide president
Ownership: Omnicom Group (part of Diversified Agency Services)
Subsidiaries: Access Emanate Communications, Capstrat, Daggerwing Group, and Harrison & Shriftman
Offices: Global: 76; U.S.: 30
Revenue: Global: $500 million to $550 million; U.S.: $350 million to $400 million
Headcount: Global: 2,635; U.S.: 1,735
U.K. revenue: £25 million to £50 million; Headcount: 220
Asia revenue: $15 million to $25 million; Headcount: 90

If 2014 and 2015 were years of transition for Ketchum, then chairman and CEO Rob Flaherty believes 2016 produced "some real return on those investments."

"We saw solid growth across existing clients and a record new business year," he says. "Of our 40 largest clients, 35 grew, and the ones that didn’t only declined a little — 15 grew by more than $1 million."

Ketchum parent Diversified Agency Services, the Omnicom unit containing its PR firms, recorded organic revenue growth of 2.8% in 2016 — a marked improvement on its 1.4% dip in 2015. The agency itself grew organically in the mid-single digits.

"The U.S. and some of our specialty units drove growth more than Europe, Asia, and Latin America," explains Flaherty. "Ketchum Digital grew double digits, as did Ketchum Sports & Entertainment and our Washington, DC, and New York offices."

The U.K. had "another solid year," up single digits in revenue, with strong performance in brand, healthcare, and corporate. Asia had another year in which Flaherty "would have liked to have seen more growth."

Of our 40 largest clients, 35 grew, and 15 of them grew by more than $1 million

Rob Flaherty

The firm reorganized its global leadership in 2016, moving from a six-person executive committee to a 19-person global leadership council, comprising 10 women and nine men. The firm transferred the global president role to Barri Rafferty, with Flaherty retaining CEO and taking on chairman duties. Mike Doyle and Hilary Hanson McKean became Ketchum’s first North America regional presidents this April.

In Europe this March, Omnicom merged its Ketchum, Fleishman, and Porter Novelli networks in France, Italy, the Netherlands, and Spain under the Karen van Bergen-led Omnicom PR Group structure.

"I’m working really well with Karen, and she’s attended a number of our leadership events," says Flaherty. "We’re working on acquisitions and have many milestones ahead. It’s great to have someone from our category talking about strategy with us."

Change management merger
Van Bergen facilitated Ketchum Change’s merger with Omnicom’s Los Angeles-based Daggerwing Group to create a combined change management offering under the latter branding. Ketchum Change president Tyler Durham left in November, a month before the merger. Daggerwing Group CEO Ewan Main leads the combined consultancy.

Ketchum appointed Mark Hume COO for Europe in August. Around the same time, agency partner and European CEO David Gallagher became OPRG international president for growth and development.

In July, the agency consolidated its three German brands — Ketchum Pleon, Brandzeichen, and Emanate — under the Ketchum Germany banner. Dirk Popp, partner and CEO of Pleon, left the company and Victoria Wagner, CEO of Brandzeichen, stepped up to lead all Ketchum’s German operations.

In the U.S., Ketchum’s MMG health shop was moved into the newly created Omnicom Health Group in January 2017 to align more closely with other network health firms.

"We’re working to be as strong in corporate as we are in brand," says Flaherty. "It’s the largest practice in our New York office, and the largest users of our real-time content marketing StoryWorks offering are corporate clients."

Flaherty cites H&R Block as a great example, for which Ketchum promotes the company around tax season, but also creates visibility for CEO Bill Cobb, using real-time engagement in current events. StoryWorks hubs will be in all offices by the end of 2017.

In Europe, the Ketchum Maslansky research joint venture was broken up when Gallagher moved into his new group role and Keith Yazmir returned to the U.S. Agency partner Julie Schumacher Ciardiello, director of Ketchum’s North American food and beverage practice, transferred to Omnicom sibling Porter Novelli in November as New York MD.

Evolution of PR landscape
Account-wise, Ketchum won Ulta Beauty in Chicago from sister firm FleishmanHillard. Sweetener brand Splenda brought on Ketchum as PR AOR at the end of July following a competitive review.

In Europe, Ketchum was appointed to provide PR support to Rome’s bid to host the 2024 Olympic and Paralympic Games after an "international bid" process involving five agencies.

Last fall, the firm expanded its North American PR remit for Hyundai following a pitch process. It retained its corporate and product brief and also won assignments for the automaker’s Hispanic outreach and Genesis luxury brand. In Asia, Singapore Economic Development Board came on as a client.

To fight an opoid epidemic gripping the nation, Adapt Pharma partnered with Ketchum to Redefine Narcan, a life-saving antidote that many Americans did not even know about. The campaign took home the 2017 PRWeek Award for Best in Healthcare.

In November, Ketchum lost its consumer and media relations brief for National Grape Cooperative processing and marketing subsidiary Welch’s to Padilla. It lost Fruit of the Loom to Cohn & Wolfe in April.

The comms and content landscape has evolved greatly since Flaherty became CEO in 2012, witnessed by the launch of new service offerings including Ketchum VR, GenZennials, and Ketchum Influencer.

"We’re increasingly going to market as an ecosystem of partners and Ketchum," says Flaherty. "We’ve partnered with the likes of Tap Influence, Traackr software, Tubular Labs, and Brandwatch and Zignal for social listening and measurement."

See also: Special guest and Ketchum CEO Rob Flaherty stopped by The PR Week to discuss his agency's 2016, changes at IBM, and more

On the people front, WE Communications’ Lisa Sullivan joined Ketchum last March as EVP and director of the agency’s North American tech practice. Makovsky’s Tom Jones boomeranged to Ketchum as director of the firm’s New York healthcare practice.

Dave Chapman transitioned from director of Ketchum West to become partner, environmental reputation — 19-year agency veteran Melissa Kinch assumed Chapman’s former role.

Emmy Award-winning producer Michelle Carney joined Ketchum Sports & Entertainment in October as VP, original content and branded entertainment.

Annalise Carol came on at Ketchum New York in March 2016 as SVP, issues and crisis, having previously worked at Brunswick. North American client development director Michael O’Brien became chief client officer in October.

Karen Albritton, CEO and president of Ketchum’s Capstrat subsidiary, is leaving the firm in June. Agency chairman and cofounder Ken Eudy departed at the end of last year. Global corporate practice lead Rod Cartwright leaves Ketchum in May.

Former PMK-BNC executive Rick McCabe joined Ketchum Sports & Entertainment last March as SVP of sports, leaving eight months later. Kelley Skoloda, partner and director, marketing to women, and senior brand practice counselor at Ketchum Midwest, left in April 2017. Overall staff turnover was 27%.

"We are a fully integrated comms firm using every technology platform available, but still emphasizing earned at the core," says Flaherty, "accelerated and amplified by the full PESO spectrum."

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