FleishmanHillard: Agency Business Report 2009

Fleishman president and CEO Dave Senay now considers 2008 to have been a "landmark year" for PR in general, and for his firm in particular.

Outlook
Fleishman president and CEO Dave Senay now considers 2008 to have been a "landmark year" for PR in general, and for his firm in particular.

"I think 2008 was a watershed year that marks a shifting in the balance of power in the communications industry to those who have PR principles in their roots" he says. "Spending patterns reflect that."

The firm's ad subsidiaries worked with both presidential candidates – President Obama and Sen. John McCain (R-AZ) – work that Senay thinks is "emblematic of the near wholesale move of clients' appreciation for our industry as the rightful heirs of the creation of power and influence."

The election notwithstanding, it's the digital, global, and innovation practice areas that he highlights as the "driving forces" of the firm and the industry. New hires were brought on board to aid with social media strategy. FH.EDU was launched to help employees understand the applications of digital media. Globally, the firm saw its business expand in Asia-Pacific and EMEA. The firm frequently enlists its resources around the world to execute its client work.

"We've only begun to see the front edge of the wave of global brands coming out of Asia and Eastern Europe," says Senay. "That development is reflected in our new business wins in 2008. It's a trend that will continue in the foreseeable future."

However, the economic recession dampened the agency's fortunes in the second half of 2008. During the first quarter of 2009, the firm announced layoffs in North America and reorganized its Southern California offices, eliminating the Los Angeles GM position. Still, Senay remains hopeful.

"We can use this period to accelerate our evolution and reshape this company even more quickly around the priorities of a world that is driven by digital, global, and the amazing mash-up of communications disciplines," he says.

"Clearly, there is a slowdown in spending for the first quarter of this year, but we haven't lost a client. They're just waiting for a better day. When spending returns, we are going to be stronger than ever. We are unapologetically optimistic about the future."

Staff
Fleishman-Hillard did not disclose its headcount or staff turnover. Hiring focused on the digital space, with new staff members also coming with public affairs, corporate, and technology backgrounds.

There were a number of senior management changes, including Martha Boudreau, president of the Mid-Atlantic region; Emily Frager, GM, Minneapolis/St. Paul; and Michael Rinaldo, global MD of healthcare. There were also a number of senior hires including Matt Dickman, senior digital strategist in Cleveland, and Elan Shou, MD in Shanghai. The firm grew its digital team to more than 170 professionals internationally.

Fleishman also reported five staff departures in 2008. Among those were Anne St. Peter, GM of Kansas City; Doug Bell, GM in Cleveland; and Keith Hughes, MD of marcom.

Structural changes
Fleishman acquired Paul Wilmot Communications, a New York-based firm with lifestyle and fashion brand clients, such as MAC Cosmetics and Calvin Klein.

Regional performance
Fleishman saw its best year ever in the Asia-Pacific and EMEA regions, with both top- and bottom-line growth. The economic recession led to reduced spending in the US.

Practice areas
The agency has 29 practice areas, which include animal care, b-to-b and b-to-c marketing, digital, FH Hispania, litigation communications counsel, public affairs, youth marketing, and technology. The firm added entertainment and FH Moms practice groups. It is also managing and staffing Omnicom Group's new MobileBehavior area, focusing on mobile communications.

In 2008, the digital and technology practices were the lead growth drivers, with public affairs, healthcare, corporate communications, and the various marketing groups adding to the firm's growth.

Accounts
Key account wins included Aviva, Boy Scouts of America, Burgundy Wines, ICICI Bank, the US Marines, and the governments of Abu Dhabi and Brazil. Between 50% and 60% of new business wins were across three or more countries. Less than a third of the firm's clients are on retainer.

The firm lost four key accounts: California Children & Families Commission; the New Jersey Department of Health; Sound Resources LLC; and ThyssenKrupp.

Financial performance
Fleishman could not provide exact revenue numbers, but the global range was $500 million-plus and $400 million-plus in the US. Of its growth, 60% was organic and 40% was from new business. The firm met its financial expectations for the first half of the year, but was negatively impacted by the economic downturn in the second half of 2008.

Key facts
Principals: Dave Senay, president and CEO; John Graham, chairman

Ownership: Omnicom Group, as part of the Diversified Agency Services group

Subsidiary companies: Avant, Allyn & Company, BlueCurrent, CCW, CPR Worldwide, GMMB, High Road Communications, iStudio, Lois Paul & Partners, MobileBehavior, Paul Wilmot Communications, Stratacomm, The Remedy, Vox Global Mandate

Offices: Wholly owned, 72 offices globally, 51 in the US. The firm also has a number of majority-owned offices in the US and abroad, and dozens of affiliates in 46 countries

Revenue: The firm reports more than $500 million in global revenue for 2008, with more than $400 million in the US

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