Ketchum: Agency Business Report 2013

In 2012, Ketchum, which turns 90 this year on May 22, saw a change at the top, as president Rob Flaherty became CEO, while Ray Kotcher transitioned from CEO to chairman.

Principals: Rob Flaherty, senior partner and CEO (l); Ray Kotcher, senior partner and chairman
Ownership: Omnicom Group, as part of Diversified Agency Services division
Subsidiary agencies: Access Communications, Capstrat, Harrison & Shriftman, MMG, Zócalo Group
Offices: Global: 75; US: 28
Revenue: Global: $400 million to $450 million; US: $250 million to $300 million
Headcount: Global: more than 2,500; US: undisclosed

In 2012, Ketchum, which turns 90 this year on May 22, saw a change at the top, as president Rob Flaherty became CEO, while Ray Kotcher transitioned from CEO to chairman – a “full-time chairman,” asserts Flaherty.

The Omnicom firm's 2012 revenue grew by a low double-digit percentage over 2011, with strong top- and bottom-line growth. This bested the holding company's overall 2012 PR uptick of 3.3%. The agency is also off to a strong start in 2013, adds Flaherty.

Keeping all top 50 clients – which comprise 80% of the firm's income – played a key role, as accounts such as FedEx and IBM grew notably. In all, organic growth slightly outpaced new wins last year, which included MasterCard, P&G's global Olympic business, and Cleveland Clinic.

“Some clients,” notes Flaherty, “went through difficult periods as their budgets declined.” Kodak, which filed for bankruptcy, was among them. Last month, Sharp Electronics split its account between Kwittken & Company and Peppercomm after two years with Ketchum.

Flaherty, a 24-year veteran of Ketchum, which saw overall headcount rise 5% last year, is excited about being a job creator. “We're defining the future with the roles we're creating,” he says.

Numerous senior appointments reflect this. Dean McBeth was hired as SVP of digital and content strategy, while James Kelly joined as EVP and global director of strategic and creative planning. Key promotions included New York director Barri Rafferty being elevated to North America CEO and COO and CFO Rob Lorfink becoming president. Julie Ferriot was promoted to global director of Ketchum Social Responsibility, a new role at the firm.

Exits included Jonathan Kopp, partner and global director of Ketchum Digital, who left this January for Glover Park Group. London CEO Avril Lee left in February.

Most regions fared well, but Flaherty underscores Russia and China. In the former, Google led key account wins. In the latter, new business included Hong Kong Disney-land and Hilton Hotels. Meanwhile, North America still accounts for 60% of revenue, with Flaherty specifying New York as a “powerhouse.” Southern Europe, however, in particular Spain and Italy, lag behind.

On the new office front, “additions were all done with an eye to offer the most integrated marketing services formed around earned engagement,” explains Flaherty.

 The early 2013 acquisition of Capstrat – a firm with 2011 revenue of over $14 million – exemplifies this. “It's a super regional player and a model of our business' evolution,” adds Flaherty. “It started as a PR and public affairs firm, but has fully moved into integrated marketing with great digital and content-creation capabilities.”

With an eye on World Cup 2014 and the 2016 Summer Olympics, Ketchum Sports & Entertainment opened its first international base in São Paulo, Brazil, last March.

Ketchum's Change Management business, which counsels leaders on employee engagement that improves communication and reputation, grew by 100% in Q4 2012. Launched in 2001, it has since grown to seven offices in seven time zones, as well as 35-plus consultants around the world.

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