Burson-Marsteller: Agency Business Report 2010

Despite its moves to branch out aggressively into other areas, Burson-Marsteller's reputation rests largely on its track record of working with corporate and crisis clients.

Principals: Mark Penn, worldwide CEO (pictured); Patrick Ford, US president and CEO
Ownership: WPP Group (as part of Young & Rubicam Brands)
Subsidiary agencies: Direct Impact, Prime Policy Group
Offices: 69 wholly owned globally; 13 in the US
Revenue: Global: between $300 million and $400 million; US: between $100 million and $200 million

Despite its moves to branch out aggressively into other areas, Burson-Marsteller's reputation rests largely on its track record of working with corporate and crisis clients. And, despite a slow first half, the agency strengthened its presence in the global PR market in the second half of 2009, due in part to that flagship issues and crisis work – especially for companies affected by the economic downturn.
 
Revenue was down for the year, says worldwide CEO Mark Penn, but overall decline was reportedly in the low single digits. According to the agency, there was no growth in profit.
 
The firm's advertising operation, Penn adds, which makes up about 5% of the business, was the cause for most of that decline as clients cut back on paid media budgets. Parent company WPP Group reported that revenue fell 7% for its PR and public affairs division for the year.
 
Entering new territory
"In a year when many people were cutting back, some [opted] to embark upon major new efforts because of what was happening," says Penn. "That was a critical part of where we were able to be successful."
 
He cites Ford and AIG as examples of global clients for which Burson handled issues and crisis work in 2009.
 
Another area of ongoing growth has been the firm's Washington operation, says Penn. It reports significant wins and work with Microsoft, Coca-Cola, and the Federal Communications Commission. Other new clients include Discover Financial Services and Colgate-Palmolive. Losses in 2009 included Century 21.
 
"Things picked up strongly from Labor Day on, so the net was a much smaller decline," he says. "It was middle, smaller clients, actually, that came back significantly. Those are a lot of the ones that we're seeing come back now."
 
Burson-Marsteller, included in a WPP-wide hiring freeze through year's end, reported the departures of Gail Cohen, global chair of healthcare; Chris Foster, US chair of healthcare; and Brian Lott, MD and the account lead for enterprise software leader SAP.
 
Key hires included Helene Ellison as global chair of healthcare, Bob Pickard to lead operations in Asia-Pacific, as well as Julie Vallese as MD of the agency's product integrity practice.
 
"Last year we upgraded talent," says Penn. "We had a small decline in our net headcount. This year, we're hoping to resume growth."
 
Looking forward
The WPP agency's leadership plans to expand and strengthen both its global network, which includes Asia-Pacific and South America, and its digital operation, which was formalized under the Proof Integrated Communications brand in 2009.
 
Even so, retaining its reputation as the leader in crisis and issues work is a key objective for the firm.

"That's been critical," says Penn. "In a time when the unexpected became the expected for so many companies, an important part of what we were able to do is to be ‘the' agency, the go-to in that area."

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