Cohn & Wolfe: Agency Business Report 2009

The global environment forced moderate adjustments to C&W's forecasts and expectations, mostly because of client cutbacks and fewer new business opportunities.

Outlook
The global environment forced moderate adjustments to C&W's forecasts and expectations, mostly because of client cutbacks and fewer new business opportunities.

"Because of the economy, I'm not sure the benefits [of merging with GCI] are going to show up in the financials at the end of this year," says Imperato. "But we are invited to many more large pitches than either [of us] were when we were [separate]."

The firm has participated in several new pitches this year that have resulted in un-disclosed million-dollar wins, in addition to several that are still undecided, she says.

"If we have a flat year or a couple of percentage points of growth – that would be a good year," she adds. Normal growth would be about 10%, but account wins will continue to be offset by budget cuts. "I'm optimistic budgets will come back by the end of the year," Imperato notes.

Staff
Headcount tops 1,000, nearly double from FY 2007, which can be greatly attributed to C&W's merger with GCI Group on July 2. Its turnover rate was about 20%. Though president Jeff Hunt left, seven senior hires were made in 2008.

Three senior staff were promoted, including Geoff Beattie as global practices and global energy practice head and Jillian Janaczek as EVP and healthcare practice leader.

Regional performance
In April 2008, C&W acquired a majority stake in European tech communications firm AxiCom. Coupled with the GCI merger, this resulted in an expanded global network and growth in all of its regions.

Practice areas
C&W had seven existing practices: consumer, corporate, digital media, sports marketing, healthcare, tech, and sustainability. In 2008, it added energy, entertainment, and public affairs. Digital, energy, and tech showed the strongest growth. The GCI merger helped make C&W a major consumer and healthcare player. Healthcare showed the least growth because as the firm's largest practice, it created the most conflicts. Account distribution across practice areas are: healthcare 35%; consumer 28%; tech 22%; and corporate 15%.

Accounts
Key account wins included ExxonMobil, Major League Baseball, Bayer Pharmaceuticals, SanDisk, Bank of America (UK), and Virgin Atlantic (UK), among others. The agency lost Dell, Remy, and HP as clients.

Financial performance

Global revenue fell between $100 million and $200 million; US revenues were between $50 million and $100 million. CEO Donna Imperato says these figures doubled from FY 2007, in part because of the merger. Top and bottom-line growth occurred in 2008. Most growth resulted from the GCI merger, but C&W also experienced organic and new-business growth equally.

Key facts
Principal: Donna Imperato, global CEO

Ownership: WPP

Subsidiary agencies: GCI Health

Offices: More than 40 wholly owned globally; six in the US

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