APCO Worldwide: Agency Business Report 2015

"We are now a much more global company and wanted to run the organization in a more global way," says Margery Kraus, APCO Worldwide's executive chairman.

APCO Worldwide executive chairman Margery Kraus
APCO Worldwide executive chairman Margery Kraus

Principals: Margery Kraus, executive chairman; Brad Staples, CEO
Ownership: Independent
Subsidiaries: StrawberryFrog
Offices: Global: 35; US: 8
Revenue: Global: $118,112,600; US: $69,073,200
Headcount: Global: 635; US 266

"We are now a much more global company and wanted to run the organization in a more global way," says Margery Kraus, APCO Worldwide’s executive chairman.

 The agency nailed down a new leadership structure in 2014. Worldwide international president Brad Staples became CEO when Kraus transitioned to executive chairman. EVP Evan Kraus was promoted to president and MD of operations when president and COO, Neal Cohen, became vice chairman of the board and president of global client strategy. Nelson Fernandez, New York MD, was named chairman of North America and Nicolas Bouvier, Paris MD, became chairman of Europe.

In early March, Chris Hassall, former global external relations officer at P&G, joined APCO’s international advisory board.

Indeed, 2014 growth came outside of the US where revenue declined almost 10% from $76.6 million in 2013 to $69.1 million last year on top of a 1.2% global decline in 2013. The agency’s top performing areas were Europe, China, and the Gulf. 

APCO opened an office in Tokyo in mid-2014. Asia-Pacific revenue grew 18% from $10.5 million in 2013 to $12.4 million. UK numbers were flat, landing at $7.3 million last year. Revenue growth in the Gulf was 20% year over year, rising from $8.53 million in 2013 to $10.28 million in 2014.

Existing clients accounted for 58% of growth. Key wins in Asia included AdvaMed and Estée Lauder. In the US, APCO won work developing McDonald’s five-year global community engagement strategy. The agency landed Office Depot for corporate communications and Comcast for corporate positioning and public affairs. 

Emphasis on growing markets
In the Gulf region, wins included media and entertainment hub twofour54, Dubai World Central, and Damas Jewellery. The agency continues to do a lot of comms and PR work for Masdar, the company building a sustainable planned city in Abu Dhabi.

"We are self financed so we have to go step by step," Kraus adds. "We put the emphasis on places with growth such as the Middle East. We had to get behind a locomotive that was running."

Sixty percent of the firm’s wins were across three or more countries. Existing clients that expanded to other countries included Facebook, Novartis, Mars, and Microsoft.

A number of MDs left including San Francisco’s Cherie Stewart, Europe’s Edward Walsh, Beijing’s Jane Zhang, and Laurie Labuda, deputy MD in Washington, DC.

Staff turnover shot up from 14% in 2013 to 23% last year. Kraus says some challenges in the US stemmed from "the paralysis of Washington and how the rules of issue campaign funding have changed." 

Right sizing the DC office and scaling to that market has meant moving staffers, along with work, to locations such as Chicago and New York. For example, two members of its StudioOnline practice moved from Washington – one to New York, the other Paris – to extend digital and design capabilities.

Still, at 170 employees, down from about 200, DC remains APCO’s largest office.

"There was a minor reduction of work for North America, but with a bit of focus it should grow back," says Kraus. "A lot of DC representatives have been given global responsibilities and don’t always have the knowledge base, the pool of people, or the resources to manage that. The office there is suited to be the portal for those people."

Regarding 2014 work for BlackBerry, Evan Kraus notes: "Overall, as the company’s new management set a new direction they did make less use of PR services in aggregate as the year progressed. Revenue was about 5% lower than in 2013."

At the end of 2014, BlackBerry shifted strategy and began a search for local agencies in a number of markets less than two years into a partnership with APCO and Text100. The agencies will not defend markets under review, but will continue working in countries not being pitched, which includes APCO’s remit in the Middle East and Germany.

More growth is expected out of the Chicago office in part because of Tina-Marie Adams, appointed in August as MD, and the foothold it has in the healthcare space working with the BlueCross BlueShield Association.

"Moving from employer-based insurance to more consumer-oriented education about insurance has been a key part of our work. These companies are focused on presenting themselves differently," Margery Kraus says. Companies are also tapping into the work APCO did with the UN Foundation on child immunizations.

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