Ketchum: Agency Business Report 2010

Mixing client retention, a commitment to creativity, and a strategic merger seems to have helped Ketchum weather the storm of 2009.

Principals: Ray Kotcher, CEO; Rob Flaherty, president
Ownership: Omnicom Group, as part of Diversified Agency Services
Subsidiary agencies: Access Communications, Concentric Communications, MMG, Stromberg Communications, Zocalo Group
Offices: 61 wholly/majority owned globally; 25 in the US
Revenue: Global: $300 million to $400 million; US: $100 million to $200 million
Headcount: Approximately 2,000 globally; US headcount undisclosed

Mixing client retention, a commitment to creativity, and a strategic merger seems to have helped Ketchum weather the storm of 2009. While its parent company Omnicom reported a 15% drop in revenue for its PR operations in 2009, CEO Ray Kotcher calls 2009 the agency's "second-best new-business year in history."
 
President Rob Flaherty says the firm brought in more than $60 million in new business in 2009, an impressive feat given the economy. New pieces of business included Applied Materials, Brink's Home Security, Centers for Medicare & Medicaid Services, City of Toronto, Digg, ECCO Biom, Mexican Hass Avocados Importers Association, Newell Rubbermaid, Philips (as part of OneVoice), and Telefonica. Flaherty notes that it was a particularly strong year for technology and consumer electronics.
 
Ketchum prides itself on client retention – in 2009 it was able to keep all of its top 50 clients for the fourth year in a row. "One barometer of success isn't just what's coming in, but also what's going out, so we were very pleased with that," Flaherty says.

Kotcher adds that retaining staff was an important goal for the agency, and it achieved an 83% employee retention rate. "In the end, it really is about talent," he says, adding that the agency offered 300 training courses to employees last year.

"We want to make sure our clients can partner with us to stay ahead of the changes that are roiling the media and business world," adds Flaherty, noting that clients expect "nothing less than work that is globally scaled, locally relevant, socially responsible, reality based, and precisely measured."
 
Expanded global scale

Perhaps the biggest news for the agency in 2009 was the steps it took to further that global scale – in June 2009, the agency merged with Pleon Worldwide.

The merger has expanded Ketchum's global footprint – including minority-owned firms and affiliates, Ketchum now has more than 100 offices in 70 countries.

Aside from its global growth, another focus has been building its digital practice. Though Chad Latz, SVP of digital strategy and client service, left to join Cohn & Wolfe, the firm bolstered Ketchum Digital's leadership with the hiring of Jonathan Kopp as global director. Joe Becker joined in early 2010 to assume Latz's responsibilities. The firm views digital as "integrated into everything we do," says Flaherty.

Recognizing that PR firms are being called on for more content creation, Ketchum took steps to increase its role in that as well, hiring Isaac Mark, a former producer for Howard Stern TV, as a VP and multimedia producer.
 
Client spending on the rise
Despite some 2009 challenges, Ketchum is optimistic about the year ahead, as it observes an uptick in client spending.

"Any time macro economics and consumer spending declines, our clients suffer and their budget abilities decline. We felt that just like everybody else," says Flaherty. "A lot of projects we had to put on hold are coming back now in Q1 2010. Clients are returning to spending as they become less afraid of the economy."

Still, the firm is proceeding with caution. "It's too early to say the industry is in an upturn," notes Kotcher. "We're in a wait-and-see period with the global economy. But morale is definitely strong."

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