Edelman: Agency Business Report 2008

Digital became a focus in 2007, evidenced by the firm's decision to establish a global digital practice, merging its three separate entities - EIS (Edelman Interactive Solutions), the firm's digital strategy, design, and production team; Me2Revolution, the social media unit; and Edelman Mobile, which launched in fall 2007 - under a single umbrella housing 120 people.

Outlook
Digital became a focus in 2007, evidenced by the firm's decision to establish a global digital practice, merging its three separate entities - EIS (Edelman Interactive Solutions), the firm's digital strategy, design, and production team; Me2Revolution, the social media unit; and Edelman Mobile, which launched in fall 2007 - under a single umbrella housing 120 people.

"Integration becomes the mantra of a lot of the work we're doing going forward," Matt Harrington, currently the firm's Eastern region president, told PRWeek when his appointment to US CEO was announced in March.

Edelman also focused on CSR last year "With social responsibility in general, you make money by being good corporate citizens," says president and CEO Richard Edelman.
"We helped clients in the past year [gain] an understanding that there's real opportunity for partnerships with NGOs," adds Harrington.

The firm has also taken steps to "walk the walk" by releasing a CSR report last year and by seeking to make its LA office LEED (Leadership in Energy and Environmental Design) certified.

With acquisitions in far-flung places such as Indonesia, Edelman hopes to take a "leadership position" around the world. To that end, it's making use of opportunities like the Bali Climate Change Summit, where the agency called upon its people in Jakarta to play a role.

"We need to originate work from outside the US, because the fastest-growing parts of the world will continue to be the BRIC countries [Brazil, Russia, India, China]," says Edelman. "The goal of having a global network is to increasingly tie work together."

The agency launched or continued a number of programs to highlight its prestige, including the ninth edition of its Trust Barometer Survey, its StrategyOne-helmed Goodpurpose survey, and its Boomer marketing workshop.

While the firm attributes its success to factors such as new-media integration and reduced turnover among both clients and staffers, PR's enhanced role is also significant.

"The definition of PR used to be small box," says Edelman. "We can see from the work that we are now more often at the table, sometimes having the big idea, in strategy and execution mode. Call it big-box PR."

Staff

Edelman reports 1,711 staffers in the US and 3,117 globally, a 23% increase from the previous year. Key 2007 hires included Tony Blankley (former press secretary and advisor to Newt Gingrich), EVP of the global public affairs practice; Jerilan Greene, EVP of the change management and employee management practice; Dan Schnur (a political and media strategist who worked on four Presidential and three gubernatorial campaigns), MD of the public affairs practice; and Shellie Winkler, EVP of corporate health.

Promotions included Freda Colbourne, CEO, Canada; Chris Deri, head of the new global corporate social responsibility practice; Vic Malanga, worldwide CFO, Daniel J. Edelman Inc; and Tim Scerba, COO, Latin America.

Departures were vice chairman Michael Deaver (deceased) and Charles Fremes, chairman and CEO of Edelman Canada.

Structural changes

Edelman acquired four businesses last year: Imageland, a PR consultancy with about 100 staffers in Russia and Kiev and 2007 revenue of $6 million; Pegasus, a full-service marketing communications firm in China; Indo Pacific Public Relations (IPPR), a 100-plus shop based in Jakarta, Indonesia; and Karyo Communications, a Vancouver-based firm.

Regional performance

The US, which represents 66% of the firm's worldwide revenue, grew nearly 22%, while the next largest region, Europe, grew 24%. Edelman's fastest-growing regions are Canada and Latin America, which showed 44% growth in the past year, including the acquisition of Karyo.

Practice areas

There are six core practice areas: corporate, consumer marketing, digital, health, public affairs, and technology. Consumer sub-practices are food and beverage, travel and leisure, entertainment, sports, and multicultural. Health sub-practices are RX, corporate affairs, consumer, life sciences, health policy and public affairs, and medical education and publishing. Corporate sub-practices are corporate reputation, crisis and issues management, financial and IR, change management and employee engagement, and corporate social responsibility.

The largest revenue increase occurred in the technology practice with revenue growth at 82%, in part due to A&R Partners (now A&R Edelman) in 2006. Public affairs and consumer each grew by 23%, corporate by 17%, and health by 15%.

Accounts
Key account wins included Dow Jones & Company, Lehman Brothers, HP, the Business Roundtable, Novartis: Exjade, Washington Mutual, Waste Management, Wyeth: Premarin, Duke University, Dubai World/MGM Grand, Marsh & McLennan, BlueCross BlueShield, The Ad Council, Sherman & Sterling LLP, and AstraZeneca: AHA Start Movement.

Edelman established global client managers to support the growth of its top clients in the biggest regions. Its FY2007revenue from its top 40 clients grew 28%, accounting for 51% of its global revenue, up from 46% in 2006.

Financial performance

The agency reported US revenue of $262,885,026 last year, a 21.6% increase over 2006. Outside the US, revenue was $139,694,583 in 2007, up 19.9%. Worldwide revenue in 2007 came to $402,579,609, an increase of 22.7% from the previous year.

The firm doesn't differentiate between organic revenue and revenue from new business. However, Edelman's reported 23% growth exceeded expectations.


Principals: Richard Edelman, president and CEO (r), Matt Harrington, US president and CEO (effective July 1, 2008)

Ownership: Independent

Offices:
51 wholly owned offices: 13 in the US, 38 internationally

Revenue:
Global, $402,579,609, a 22.7% increase over the previous year; US, $262,885,026, a 21.6% increase from 2006

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in