WE Communications - Turning the corner

After years of revenue decline, firm turns the corner and plans to build on 2016's growth

Principals: Melissa Waggener Zorkin, CEO and cofounder (pictured); Kass Sells, president, North America; and Alan VanderMolen, president, international
Offices: Global: 18; U.S.: 6
Revenue: Global: $101,783,000; U.S.: $83,787,000
Headcount: Global: 716; U.S.: 477

Last year was a rebound period for WE — but the bounce wasn’t as big as CEO Melissa Waggener Zorkin would have liked. After a challenging 2015, the Bellevue, Washington-based firm saw 4.2% revenue growth on a constant currency basis last year to $101.7 million.

"It was a very good year for us, a very solid year where all the things we put into motion in the last half of 2014 and 2015 started to pay off," she explains.

Fresh off its rebranding from Waggener Edstrom Communications the year prior, WE’s North American businesses saw 5% revenue growth last year, with the technology and consumer sectors leading the way.

The firm also reported 20% growth in social and digital revenue from U.S. clients. However, WE had a tougher time outside the U.S. While its Chinese business grew by a double-digit rate in terms of revenue, it declined in other markets in the Asia-Pacific region, where it added two offices last year via its acquisition of Buchan Communications in Australia.

It acquired Singapore-based Watatawa and Shanghai’s Red Bridge Communications in March this year. The latter merged with WE China and rebranded as WE Red Bridge.

European markets were also difficult, with the London and Munich offices recording lower year-over-year revenue. WE found its fastest-growing office close to home, with its Seattle location seeing 21% growth.

Dearth of integrated AOR accounts
The number of retained clients held steady at 107, and it brought on 14 new project-based clients from the prior year. The firm’s key wins in 2016 included the AOR account for wine brand Chateau Ste Michelle in North America and Apptio, bolstering its respective consumer and technology sectors. In Asia, the firm won work for Etihad Airways and MetLife. Work for clients including F5 Networks, Aruba Networks, and Brightcove expanded into new regions.

It lost accounts including North American work for Allrecipes.com, Biogen, and Gamestop, as well as accounts supporting Bloomberg and Hootsuite in Asia-Pacific and FedEx in EMEA.

Waggener Zorkin notes she saw fewer new business pitches for all-encompassing AOR accounts up for grabs in 2016 and early 2017. "A lot of businesses are doing fixed monthly or other contracts, and a lot are doing more work in-house and balancing what they use an agency for," she says.

One significant account WE did pitch for — and secure — came in Q2 2017 when CA Technologies brought on the firm to handle product solutions comms and the bulk of its corporate PR work. The agency will work within an initial $1.2 million budget. Edelman was the incumbent on the account.

It was a very good year for us, a very solid year where all the things we put into motion in the last half of 2014 and 2015 started to pay off

Melissa Waggener Zorkin

CA Technologies does not use the "AOR" term, but WE is handling the majority of its communications work, explains Darlan Monterisi, SVP of global corporate comms.

Dawn Beauparlant was elevated to chief client officer in March 2017, adding to her head of technology duties. The firm also brought on some industry veterans for top positions, while boosting overall headcount by 50 from the year prior. In 2016, WE hired former FleishmanHillard CMO Stephanie Marchesi as president, health sector and Eastern region; Catherine Allen, Matt Ashworth, and Steve Kerns in GM roles; and David Hunt and Jeremy Seow as MDs for China and Singapore, respectively. The agency also divested its ownership stake in Seoul-based agency Shout Korea last year.

Among notable departures were GMs Chris Talago, who went to Oracle, Lisa Sullivan, and Madhuri Sen. EVPs Caroline Sanderson and Caroline Boren left the firm, as did a host of VP-level staffers.

Waggener Zorkin called the firm’s work for longtime top client Microsoft "outstanding," noting major business model and executive changes at the company in recent years. "A lot of these things we don’t get credit for," she adds, "but we are in partnership [with Microsoft], and it challenges us all the time."

Waggener Zorkin notes the firm is well positioned to take advantage of the trend of more businesses becoming socially conscious, and she hints more acquisitions are on the way in 2017.

In March, Pam Edstrom, cofounder of WE Communications, passed away, aged 71. Edstrom spent much of her career at the agency to which she lent her name, working alongside Waggener Zorkin in a relationship that spanned more than three decades.

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