2005 Agency Business Report: Fleishman-Hillard

Owned by Omnicom (part of Diversified Agency Services group)

Owned by Omnicom (part of Diversified Agency Services group)

John Graham, CEO

Number of offices: 36 in the US; 79 globally.

Senior hires: 74 hires at VP level or above, including Rich Jernstedt, EVP, Chicago, formerly chairman of Golin Harris; David Krawitz, SVP, Los Angeles, formerly a partner at California Communications; and Kevin McGuirk, SVP, San Francisco, formerly BEA VP of corporate communications.

Senior departures: Three general managers: Doug Dowie, Los Angeles; Ron Arp, Portland; Scott Clark, London.

New US offices: Raleigh-Durham, NC; BlueCurrent, Dallas, a spin-off boutique agency.

Other office changes: CPR, GPC, and Herald in Europe were rebranded and united with Fleishman-Hillard Europe. In San Francisco, UpStart was absorbed into the Fleishman brand.

Mergers and acquisitions: Acquired Stratacomm with offices in Washington, DC and Detroit. Additionally, Mercury Public Affairs with offices in Albany, Buffalo, New York and Washington, DC, became part of the Fleishman family.

Number of practice areas: 19 - b-to-b marketing, multicultural; b-to-c marketing; FH Hispania; corporate reputation management; energy; FH Out Front; financial communications; food & agribusiness; healthcare; public affairs; homeland security; social impact; marketing; innovation; technology; interactive; transportation internal communications; travel and tourism; litigation support.

Which are new? FH Out Front (gay, lesbian, bisexual and transgender practice group), energy, transportation, innovation, and active marketing.

Which areas were strong? Public affairs, healthcare, marketing communications, corporate, and technology.

Which were weak? The Litigation practice has not been as robust as in past years. Also, the financial practice lagged throughout the year but picked up in late 2004 and the beginning of 2005 due to increased merger activity.

Distribution of accounts across practice areas? 90% of Fleishman's accounts are served by more than one practice area. Additionally, Fleishman's 50 largest clients are served by an average of 17 different offices.

Key account wins: Visa USA, Oracle, Masterfoods, Kos Pharmaceuticals, Mirassou Winery, Serono, various political campaigns.

Key account losses: Resigned Los Angeles Department of Water and Power.

Accounts expanded into new markets: Several, including AARP; Kos Pharmaceuticals; Masterfoods; Cingular; Daimler Chrysler; Novartis; Procter & Gamble; SBC; Sun Microsystems (pulled out of Sun's review in March 2005); Gatorade; VISA USA; Wal-Mart Stores.

Did financial performance meet expectations? Revenue growth exceeded our expectations. Fleishman experienced both top-line and bottom-line growth which also exceeded expectations.

Outlook: Though the firm's problems in LA are still unresolved, Fleishman's leadership reports strong growth. The agency formalized its client relationship manager role last year. "We began to realize something that we'd known for a long time - that much of the growth was coming from existing clients," says CEO John Graham. The new-business win rate was said to be 75%, and the firm's confidence in its European potential was underscored by the integration of five acquired agencies under the Fleishman brand.

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