Edelman: Agency Business Report 2009

Last year, all of Edelman's operations grew - in particular its US offices, which exceeded expectations.

Outlook
Last year, all of Edelman's operations grew – in particular its US offices, which exceeded expectations. In explaining the agency's thriving business in 2008's toiling economy, worldwide CEO Richard Edelman notes the importance of his firm's independent ownership.

"It's allowed us to define PR in the broadest possible sense," says Edelman, who stresses the firm's internal capabilities and its lack of dependence on sister agencies for services, like digital or branding.

Business wins in 2008, such as the HP and Symantec accounts, were attributed to the firm's global network and "seamless" team.

"We're bringing in a cross-pollinated team. The clients are really benefitting and it's resonating well," says Matt Harrington, US CEO. "We have the benefit of having very talented folks [who work together across practices]... and we're able to draw on all the intelligence from our digital division."

While Edelman created its global digital practice in 2007, 2009 sees the agency moving forward, seeking to "build our team to handle multinational business that is going to be hubbed in the Middle East: HP, Microsoft and some of our big clients," says Edelman.

The firm opened an office in Abu Dhabi with nine staffers in the past year. It is also seeking growth in the "fast-growing" emerging markets of India, China, and Russia.

This leadership position in Russia was attributed to the Q1 acquisition of Imageland, which handles healthcare, consumer products, and tech.

Another successful acquisition for the agency was the digital operation, Spook Media, in London.

These acquisitions aligned with the agency's fastest growing practice areas of consumer and technology.

Even the slowest growth found in its corporate practice "has been consistently steady over the course of the first [part] of the year in terms of opportunity," says Harrington, who has seen companies' "dollars being pulled from other parts of the organization to ensure corporate communications is communicating with all of its audiences."

Moving forward, the mantra for the agency will be "helping clients navigate uncertain times," he adds.

"We delivered on last year's integration emphasis," Harrington points out. "We're just ensuring that [now] we're doing it in a way that delivers real ROI for our clients because every dollar is so much more valuable at the moment."

Staff
Edelman reports a current global headcount of 3,178, having added 112 staff since FY 2007. Among the senior hires were Susan T. Borra, EVP and MD of nutrition, food and wellness; JP Schuerman, GM of the Los Angeles office; and Emily Rupp, US CFO.

No senior staffers departed in 2008, but Catherine Ogilvie, GM of San Francisco, left in February 2009. Edelman declined to provide the 2008 percentage of its staff turnover.

Promotions included Matt Harrington, US president and CEO; Nancy Ruscheinski, US COO; Kevin Cook and Caroline Dettman, MDs of the Chicago office; Mark Shadle and Janet Cabot, presidents of the Central region; and Russell Dubner, president of the New York office.

Structural changes
Edelman acquired former affiliate, Imageland, the largest PR firm in Russia, in January of 2009. It also acquired digital agency Spook Media.

Regional performance
The US operation grew by 9%, while Edelman saw a 12% increase globally, of which Asia-Pacific saw the most growth. Reportedly, all of the agency's offices saw growth.

Practice areas
Edelman has six global practice areas – consumer, corporate, digital, health, public affairs, and technology. Consumer sub-practices include food and beverage, technology, health, retail, entertainment (Matter), multicultural, sports, and travel and leisure. Health sub-practices are RX, corporate affairs, consumer, life sciences, policy and public affairs, public health, and education and publishing (bioscience). Corporate sub-practices are corporate reputation, crisis and issues, financial and IR, employee engagement and change management, and CSR.

Due to the agency's integrated model, clients are supported by a number of practices. However, the overall account distribution by practice is 33% consumer, 31% health, 16% technology, 13% public affairs, and 13% corporate.

Accounts
Key account wins included HP, Humana, Quaker Oats, Symantec, AstraZeneca/Symbicort, and Amtrak. Both HP and Symantec were accounts across three or more countries.

Edelman expanded nearly all of its large accounts, such as Starbucks, Unilever, and Microsoft. Approximately 30% of its clients hired the agency on a retainer basis, with a noted trend toward more projects.

Financial performance
The agency reported US revenue of $287,469,596, last year, with a 9% increase. Globally, revenue was $450,562,247, with a 12% increase over the previous year. The agency declined to disclose details about its profit margin.

Key facts
Principals: Richard Edelman, worldwide president and CEO; Matt Harrington, US president and CEO

Ownership: Independent

Subsidiary agencies: Blue (advertising); Strategy One (research)

Offices: 16 US; 58 wholly owned globally, plus 45 global affiliates

Revenue: Global, $450,562,247; US, $287,469,596

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