Edelman: Agency Business Report 2010

Edelman used 2009 to streamline its long-term strategy and focus on client retention.

Edelman: Agency Business Report 2010

Principals: Richard Edelman (r), president and CEO; Matt Harrington (l), US president and CEO
Ownership: Independent
Subsidiary agencies: Blue (advertising); Strategy One (research)
Offices: 52 wholly owned globally, 14 in the US
Revenue: Global: $440,110,332; US: $288,504,585
Headcount: 3,203 global; 1,715 US

Edelman used 2009 to streamline its long-term strategy and focus on client retention. President and CEO Richard Edelman attributes much of the firm's stability in 2010 to its longstanding independence plus its aggressive strategy of taking clients into global markets. At the same time, he says snagging budgets traditionally reserved for domestic advertising and digital efforts has been key.
"Companies that in the past would have sliced budgets because they faced challenges, in fact, took money from other areas and put it into PR," he notes. "That's a very big vote of confidence for our industry."
While the agency cited less than 1% growth in total global/US revenue, Edelman notes the firm's revenues in the second half of 2009 were 6% to 7% higher, triggering a growth pattern that in February 2010 provided the firm its best numbers since June 2008. Growth came primarily from corporate, consumer, and tech practices.
Client losses included Nissan and Palm, as well as the consumer portion of the Wal-Mart account. The lost project work was estimated to be worth between $1 million and $2 million annually, says Edelman.
"I'd rather not have lost it," he adds. "We're going to try to get it back."
Edelman says the firm made up the difference, citing its win with Jim Beam and expanded account work with Unilever.
Domestically, the firm added Sara  Lee and Qualcomm to its client roster. It also acquired Grassroots Enterprise, an online grassroots and public affairs shop in Washington.
Showcasing new offerings
"There's a lot of growth in the consumer business, if we're going to take share from the ad guys," says Edelman.
He cites the firm's work with GlaxoSmithKline in 2009 and its announcement of a feature-length film about obesity and eating habits, developed with the Creative Coalition. Edelman works on Alli, the pharma company's weight loss product.
"That is a classic one that would have traditionally been done by an ad agency," says Edelman. "We've taken that budget because we had a great idea and we can do that."
Globally, 2009 acted as a true test for the industry's push into new global markets as the firm opened its first office in Abu Dhabi.
PepsiCo hired Edelman in seven markets, while Microsoft expanded its work with the firm into 25 markets. It also picked up global accounts with Bausch & Lomb, eBay, Kraft Foods, Quaker Oats, and Suzlon Energy.
"The globalization is really significant," says Edelman. "In the developing world, it's all about market share in a fast-growing segment. So, we've got to build out our classic businesses of consumer, health, tech, corporate, and public affairs."
Staff expansion
While the firm underwent a handful of executive-level layoffs in Chicago, its global headcount rose by 78 during 2009.
Key hires included Richard Sambrook as chief content officer; Mark Hass as president in China; Christina Smedley as global chair of consumer; Pete Pedersen as global chair of technology; and Carol Cone as an advisor for CSR and stakeholder engagement. Departures included Mike Kan and David Dunne.
Edelman points to the hires of Sambrook and Cone as examples of where the firm is going, citing Sambrook's role in developing the firm into a true content provider.

"We're going to compete aggressively to have a broader mandate," says Edelman.

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