FleishmanHillard: Agency Business Report 2010

Two decades ago, John Graham set in motion a plan to turn St. Louis-based Fleishman-Hillard into a global PR player.

Principals: Dave Senay, president and CEO (pictured); John Graham, chairman
Ownership: Omnicom Group, as part of the Diversified Agency Services group
Subsidiary agencies: Blue Current PR, CCW, GMMB, High Road Communications, Lois Paul & Partners, MobileBehavior, Paul Wilmot Communications, Stratacomm, TogoRun, VOX Global
Offices: 80 wholly/majority-owned globally; 34 in the US
Revenue: Global: more than $400 million; US: $200 million-$300 million

Two decades ago, John Graham set in motion a plan to turn St. Louis-based Fleishman-Hillard into a global PR player. Today, it uses that global network to drive growth through new accounts, such as British Airways (EMEA & APAC), and widen its reach to existing clients such as Eli Lilly.
 
President and CEO Dave Senay says global growth still outpaces domestic. He adds that two-thirds of its top 200 clients ask for service on at least two continents. "And most of these firms aren't coming out of North America, but India, the Middle East, and Indonesia," he explains.
 
In the past year, the agency opened new offices in Jakarta, New Delhi, Abu Dhabi, and Cairo. It has 39 affiliates in 37 countries.
 
Since its sale to Omnicom in 1997, it's leveraged its access to non-PR firms to win clients with an integrated solution. Last year, that gained the firm business with Philips (as part of the Omnicom-wide OneVoice proposal) and Bayer HealthCare.
 
But the recession was not kind. Fleishman-Hillard laid off 100 people worldwide amid a hiring freeze. Senay says global revenues decreased less than 5%, but declined to give an amount. Estimates point to a slip from slightly above $500 million in 2008 to the high $400 million range in 2009. He says public affairs, digital, and marcomms propelled the firm; healthcare "held pretty steady;" and tech went into "hibernation."
 
The domestic story
US revenue fell from $400 million-plus to the $200 million-$300 million range in 2009. It closed two Dallas offices: Allyn & Co. and BlueCurrent PR, whose founders left to form a new firm. Newly acquired Paul Wilmot Communications closed its Los Angeles office due to poor performance.
 
Long-running US-based clients including AT&T, Hallmark, and the US government still comprise the bulk of its business – between 55% and 70%, says Senay. But the US, with a deeper impact on the firm's bottom line, was also its hardest-hit region. It lost accounts with ConocoPhillips, the Obama campaign, NFL Enterprises, and VMWare. Work with Motorola and PepsiCo was scaled back. It added Chevrolet and Match.com.
 
Some critics suggest the firm has placed too much emphasis on global expansion to the detriment of its US base. It is still seeking a New York GM following the promotion of agency veteran Nancy Seliger to EVP of global client relations, and it has struggled to find permanent leadership for its flagship Kansas City office. Paul Johnson, vice chairman, also departed last year. However, Senay says he has "immense confidence" in the firm's US strategy.
 
Fleishman-Hillard is known for solid, steady service. Most 2009 business came from existing clients – at a rate of 60% organic growth. Asked if it is becoming sluggish on adding new accounts, Senay touts the firm's 60% win rate for accounts above $250,000. "I keep score. It's meaningful to me," he says. "It keeps our tools sharp."
 
New offerings such as MobileBehavior, FHX experiential, and Convergent Marketing help the firm retain its edge, he adds.

"2010 will be the year where everything Fleishman has been preparing for will come to fruition – digital, integrated, global – to keep us on top," Senay predicts.

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