2005 Agency Business Report: Burson-Marsteller

Owned by WPP Group

Owned by WPP Group

Tom Nides, CEO

Number of offices: 13 in the US; 45 globally

Current headcount: Figures not supplied; Burson reports that headcount is up

Staff turnover: Held steady at 18%

Senior hires: More than 400 hires globally. Key hires include Tom Nides as president & CEO, worldwide, from Credit Suisse First Boston; Richard Meade, director at BKSH, from the House Budget Committee; Christine Cimko, managing director, public affairs, from Edelman; Robert Finlayson, president and CEO, Northern California, also from Edelman Senior departures: US departures included Chris Komisarjevsky, president & CEO, worldwide, retired; |Chet Burchett, president & CEO, US, went to Reed Exhibitions North America; Andy Hopson, market leader, New York, started his own company.

Offices opened: Richmond, VA

Offices closed: Harrisburg, PA

What region is growing? All regions grew in 2004. In terms of worldwide revenue, Burson saw 1.1% growth, which has led to margins/improvement over 2003. The fastest growing region is Latin America, where revenue grew more than 10%.

Number of practice areas: Global practices are corporate/financial, healthcare, public affairs and technology. Specialty practice groups include Direct Impact (grassroots), BKSH (lobbying), US Hispanic marketing, advertising (Marsteller), crisis management, and corporate responsibility.

What practice areas were strong? In the US, where Burson reports by a practice structure, corporate/financial, healthcare, technology, media, and BKSH grew their top lines and maintained the strongest margins.

What is the distribution of accounts across practice areas? Thirty-five percent of Burson's business crosses most of its practices. The public affairs, lobbying (BKS&H) and grassroots (Direct Impact) practices represent the lion's share of the business across the USA, followed by the corporate/financial practice

Key account wins: Includes Old Navy, Moscow 2012 Olympic Bid, MBNA, Quest Diagnostics, Johnson & Johnson ASP, National Council on Alcoholism & Drug Dependency

Key account losses: Burson reports not losing any major client.

Accounts expanded into new markets: Includes Pfizer (expanded into regional Asia, regional Latin America, Singapore, Australia and Japan); AstraZeneca (expanded work into regional Latin America with a new program to support CRESTOR, its cholesterol-lowering agent; and HP (expanded work as regional lead for Enterprise in Asia Pacific.)

Proportion of your clients on a retainer: Estimated at less than 10%.

How did revenues meet expectations? According to John Maltese, CFO: "We saw a resurgence in our brand that lead us to be cautiously optimistic in our budgeting for revenue growth in 2004. We exceeded our expectations. Revenue growth combined with our continuing effort to control across-the-board expense growth, translated into profit growth which exceeded our expectations."

Outlook: Burson's US business led the firm last year. CEO Tom Nides aims to have 50% of the firm's revenues generated in the US, and 50% overseas. "The difference between us and most of our competitors is we have real operations in these countries with real Burson people," Nides says. Management restructuring in 2004 was prompted in part by several key departures.

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