Edelman shows no signs of slowing down

Another year of impressive organic growth at the world's biggest PR firm is mirrored at the agency holding company shops and bodes well for the market's health in 2015.

Edelman had some troubled times last year but that didn’t stop the world’s largest PR agency putting on almost $67 million in revenue as it grew organically by 8.2% in 2014.

That didn’t match 2013’s performance of 11.4% or 2012’s figure of 9.6%, but it’s still impressive and many firms would take that growth in a heartbeat.

Growth was a healthy even mix of extra assignments from existing customers and new business wins. Edelman, like other large PR agencies, aspires to be the creator and instigator of the Big Idea for clients, and occasionally it gets to see the project through from soup to nuts. But that’s still work in progress.

Company president and CEO Richard Edelman told me that his firm has, however, prospered by increasingly executing on clients’ big ideas rather than just amplifying ideas dreamt up by the clients’ advertising agencies. He cited high-profile work for CVS, GE, Gap, and Starbucks that he believes is "as good as it gets" in terms of modern PR practice.

The firm’s research business, Edelman Berland, is growing strongly, expanding from $12 million two and a half years ago when Mike Berland moved over from Burson-Marsteller to $30 million and 250 people now. Its work ranges from deep analytics, primary and secondary research, and market opportunity assessment, through to attribution modeling.

Sure, there were some well-documented hiccups along the way at Edelman last year, and leadership upheavals at US level in New York, in Chicago, and on the West Coast held back growth somewhat in the US. But it is pushing forward aggressively in both the corporate and marketing parts of the business and Richard Edelman’s parting statement to me that he is taking nothing for granted suggests his firm’s competitors will have a strong and remorseless foe in the marketplace for a long time to come. He is not slowing down.

Elsewhere in the agency world, Interpublic Group’s Constituency Management Group arm (CMG), which houses the holding company’s PR firms including Weber Shandwick and Golin, was up 5.8% in 2014 but had a very poor Q4, posting organic growth of just 0.6%.

However, Weber CEO Andy Polansky, who unlike his predecessor Harris Diamond doesn’t oversee the whole of CMG, said revenues at his firm were up 10% for the year, and high single digits in Q4. This suggests there are poor performers dragging down the numbers at CMG, which also houses events and experiential agency Jack Morton, sports marketing specialist Octagon, Futurebrand, and digital shops R/GA, Huge and MRM.

The picture is looking rosier at Omnicom, where full-year organic growth in its PR division, which houses firms including FleishmanHillard, Ketchum, and Porter Novelli, was 4.1%, fueled by a strong Q4, where revenues were up 8.5%.

Publicis, owner of MSLGroup, and Havas decline to break out their PR numbers, so it’s difficult to assess how those agencies are doing. And WPP, where PR revenues have been becalmed in recent times, doesn’t report until March 9.

But the general feeling is that 2014 was probably a better year than 2013 across the board.

At PRWeek, we are in full Agency Business Report and agency rankings mode at the moment – the deadline for submissions is today (Friday, Feb 20) – and we will produce the most comprehensive global analysis of the PR agency sector ever produced, which will go live at the end of April in time for our PR360 event in London.

So watch out for that for more details on the above and to better understand the trends, movements, and themes that are shaping the PR agency sector in 2015.

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