Burson-Marsteller: Agency Business Report 2009

Despite the economic crisis, CEO Mark Penn points out that Burson-Marsteller had its strongest year ever in 2008, due in part to the firm's sturdy corporate and public affairs practices, as well as its new crisis and issues practice.

Outlook
Despite the economic crisis, CEO Mark Penn points out that Burson-Marsteller had its strongest year ever in 2008, due in part to the firm's sturdy corporate and public affairs practices, as well as its new crisis and issues practice.

"It was strong both in terms of its economics and in terms of its footprint in the industry," he says. "[We] continued to modernize the firm and continued to advise an even wider group of clients."

The agency also continued to make senior-level hires for its leading practice areas, both regional and global. In addition, it continued working with clients in the automotive, technology, and financial sectors.

"Burson has always had a reputation for being a firm that handles a great deal of crisis work," notes Penn when discussing the success the firm had in 2008. Some of that work came under fire from pundits, including the agency's work on behalf of AIG.

Penn predicts that strengths for 2009 will be the growing healthcare and energy practices, as well as corporate and public affairs, the agency's mainstays, as the US prepares for major changes both in Washington and in the healthcare industry.

"I think we are best equipped to come through these changing times," he adds. "I think we're going to see an uptick both in healthcare and in energy as those issues get considered."

The economy aside, Burson plans to maintain its company strategy, says Penn. This will include expanding its digital, integrated, global, and strategic offerings, as well as a focus on research and evidence-based services.

Says Penn: "We're not going to let the 2009 problems overcome the basic strategy of making sure that we continue to move forward, modernize, integrate our offerings, and unveil in 2009 what I would call state-of-the-industry, evidence-based techniques that I think would make our services even more on target."

Staff
The firm declined to provide staffing numbers, citing the Sarbanes-Oxley Act, but Penn notes that adding senior staffers and leaders has been a part of Burson's overall strategy since he was named CEO in 2005.

In 2008, the top US hires included Karen Hughes, vice chairman worldwide; Gail Cohen, global chair of the healthcare practice; Andrew Goldberg, chair of the US corporate and financial practice; Laurie Doyle Kelly, MD of the US technology practice; Pamela Keeton, MD of the US public affairs practice; and Christopher Cartwright, MD of corporate issues and technology.

The firm promoted Michael Lake to chair of the US public affairs practice, and Erin Byrne, chief digital strategist, to the firm's Global Leadership Team.

Exits included Rafael Casas-Don, regional healthcare director, and Jim Lake, chair of the US public affairs practice.

Structural changes
Burson acquired Asda'a PR and its 11 offices in Pakistan, Bangladesh, Sri Lanka, Nepal, and South Africa. In Australia, the Melbourne office merged into the Sydney location.

Regional performance
The firm reported double-digit growth as a result of new business efforts, "with all regions contributing."

Practice areas

Practice areas include digital communications, corporate and financial, public affairs, media relations, healthcare, tech, and brand marketing. Two practices areas – product integrity and issues and crisis – were added in 2008.

Specialty practice groups include US Hispanic marketing, multicultural, and CSR.

Business wins and hires brought growth to the brand marketing, technology, and public affairs practices, although corporate, public affairs, and technology were reported as the firm's largest practices.

Accounts
While the firm declined to name its new confidential clients, it did list Sony Ericsson Mobile, NutraSweet, Huawei, and Medtronic as new business wins in 2008.

The agency declined to divulge the names of any of the accounts it lost last year. However, the firm's loss of client Colombia during Penn's time with Hillary Clinton's presidential campaign was well publicized. As in 2007, about 10% to 15% of the agency's clients were on a retainer in 2008.

Penn notes that the firm won significant new business and has reported record growth for the past decade.

Financial performance
Burson cited the Sarbanes-Oxley Act when asked to disclose financial figures for 2008. It reported that US revenue falls between $100 million and $200 million, and global revenue between $300 million and $400 million.

The acquisition of Asda'a PR did not affect the firm's financial results last year, according to Burson.

Penn notes that some clients, facing the uncertainty of the current economy, have cut back budgets 10% to 15%.

"It's a challenge facing every agency," he says.

Key Facts
Principals: Mark Penn, worldwide president and CEO; Patrick Ford, US president and CEO

Ownership: WPP Group (as part of Young & Rubicam Brands)

Subsidiary agencies: Direct Impact, BKSH

Offices: 16 US wholly owned and 71 globally wholly owned, plus 58 global affiliates

Revenue: US, between $100 million and $200 million; global, between $300 million and $400 million

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