Ketchum: Agency Business Report 2009

"In spite of the extremely ambiguous economic environment," Ketchum CEO Ray Kotcher says he was proud of the agency's work in 2008, which helped it to record solid top- and bottom-line growth.

"In spite of the extremely ambiguous economic environment," CEO Ray Kotcher says he was proud of the agency's work in 2008, which helped it to record solid top- and bottom-line growth. Kotcher attributes the success to three things on which the agency focuses – client service, driving new business, and development of talent.

"We have made sure that we've continued to emphasize the focus on talent in the agency, everything in the entire chain," he says. "We have done training and provided the tools to our people to make sure we are delighting our clients every day."

One way the agency is doing that, and preparing its staff for the future, is by introducing Career Development Plans so that staffers of all levels will "have a clear road map that helps match up their interests and their progression with the things we need to do here in the agency to serve our clients," Kotcher adds.

In 2008, Ketchum worked on some high-profile campaigns that generated plenty of buzz for clients such as Ikea, Dr Pepper, and Häagen-Dazs.

"I would say that one of the reasons that PR is probably doing better than most marketing and communications disciplines is because of our core capabilities in the media relations area, both traditional and digital," Kotcher says, when asked about the uncertain year ahead. "I think you see clients shifting money into PR, particularly into media relations, because they still have to stay in front of their consumers and corporate constituents."

Looking at 2009 so far, Ketchum is beefing up its digital practice and is also increasing its food and nutrition practice. The agency created a nutrition certification in conjunction with Tufts University so all staffers in that practice are certified in nutrition. Crisis and issues management and communications, Kotcher notes, will also be an important area going forward.

"Because of the volatility out there and the skepticism toward business," he says, "crisis and issues is a tremendous component of what we're doing these days."

Ketchum declined to release its headcount information. Senior hires in the US included Jennifer Ehrenreich, VP of learning and development, and Katherine Yustak, VP and director of HR. Stephen Spurgeon, formerly of Ketchum Los Angeles, was appointed director of new business development for Ketchum West.

The agency restructured its senior management in 2008, promoting Rob Flaherty to senior partner and president. Other promotions include Rob Lorfink, senior partner, COO, and CFO; Jerry Olszewski, senior partner and chief client officer; Barri Rafferty, senior partner and director, New York; Dale Bornstein, senior partner and director of global practices; and Ann Wool, SVP and director of Ketchum Sports and Entertainment.

The firm made two key hires in Q1 2009: Jonathan Kopp, global director of Ketchum Digital, and Michael O'Brien, EVP and director of New York client service.

Senior staffers left in 2008, including Mark Owens, MD of Ketchum Entertainment Marketing.

Structural changes
In 2008, Ketchum acquired tech firm Access Communications, with offices in both New York and San Francisco. The acquisition, says Kotcher, added not only to Ketchum's West Coast offerings, but also its tech practice.

Regional performance
Several areas performed well in 2008 for Ketchum, including Washington, New York, and Atlanta. Abroad, Madrid also posted strong growth, while the agency opened its second Italian office in Rome in March 2008.

Ketchum closed its Dusseldorf office in September 2008, but maintains a presence in Germany with its outpost in Munich.

Practice areas
Ketchum offers five global practice areas: brand marketing, corporate, food and nutrition, healthcare, and tech, plus several other areas of expertise. Ketchum reported that all practice areas saw growth in 2008.

For several main clients, work extends beyond just one practice area, Kotcher says. He cites the Lenovo Torch Relay Campaign, led by the Ketchum Sports Network and brand marketing practice, and the Stand Up to Cancer event, supported by the entertainment marketing and healthcare practices.

Ketchum added both new and expanded pieces of business, including AMD, California Milk Advisory Board, Christopher and Dana Reeve Foundation, ConAgra, Federal Communications, Jackson Hewitt, Libby's Canned Fruits and Vegetables, and Stand Up To Cancer. Client retention rate was 100% for the agency's top 50 clients, and between 15% and 20% of new business wins were multinational.

Of the top 50 accounts, the firm reported that more than 50% expanded into other areas at the agency, or into a new geographic market.

Financial performance
Reported global revenue in the $200 million to $300 million range; US revenue in the $100 to $200 million range.

Key facts
Principals: Ray Kotcher, CEO; Rob Flaherty, president

Ownership: DAS, a division of Omnicom Group

Subsidiary agencies: Access Communications, Concentric Communications, MMG, Stromberg Communications, Zocalo Group

Offices: Wholly owned: 23 globally, 18 in the US; Partly owned: 56 globally

Revenue: $200 million to $300 million global revenue; $100 million to $200 million US revenue

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