Waggener Edstrom: Agency Business Report 2015

"The industry has to rethink what it is doing, regroup, and be sure we are adding a new kind of value," says Melissa Waggener Zorkin, president, CEO, and cofounder of Waggener Edstrom.

Waggener Edstrom president and CEO Melissa Waggener Zorkin
Waggener Edstrom president and CEO Melissa Waggener Zorkin

Principal: Melissa Waggener Zorkin, president, CEO, and cofounder
Ownership: Independent
Offices: Global: 17; US: 7
Revenue: Global: $106,676,000; US: $87,548,000
Headcount: Global: 705; US: 496

"The industry has to rethink what it is doing, regroup, and be sure we are adding a new kind of value. Do you have the right talent? Have you focused them on the right value? Can you differentiate yourself from the competition? And do you have staying power?" says Melissa Waggener Zorkin, president, CEO, and cofounder of Waggener Edstrom Communications.

She calls the agency’s "reset" – begun at the end of 2013 – a work in progress. The part of the process the team is involved with now is getting better at collaborating internally between practices and global offices.

"We were not really set up for that in the past because we had silos in North America," says Waggener Zorkin.

The P&L structure has not changed, but that is something the agency is looking at, adds the CEO.

Collaborative efforts began to bear fruit in 2014 with client MediaTek expanding from the US to EMEA and recently to APAC. AVG Technologies also grew from EMEA and moved to the US. The agency's work with Volvo started with b-to-b, later adding analytics and insight and expanding to consumer work.

Despite traction on the collaboration front, the agency’s US revenue fell 10.9% from 2013 to 2014, following a 3% decline from 2012 to 2013. In North America, 2014 account wins included Lithium Technologies, BlueCross BlueShield, and Amgen Foundation.

The agency’s top growth markets were South Africa at 50.9%, China at 29.6%, and India at 14.9%. In South Africa, the agency won WeChat, Lenovo, and Solarcentury.

WE did not repitch the Palo Alto Networks account in EMEA, which subsequently went to Bite; it lost HTC to Golin in January 2014; and work with T-Mobile was reduced after an RFP that saw its contribution reduced to business and network marketing efforts.

Under pressure
Waggener Zorkin claims the firm suffered no other losses, but says "clients shifted budgets to different kinds of remits and overall budgets shifted downward. That is where the pressure came from."

She adds that many clients regrouped in terms of what they were asking agencies to do – moving from one-off product launches to more integrated activations and using measurement throughout, rather than just at the end of a campaign.

"Our agency needs to be more adept at having those pieces and having them more quickly, because unless we show up differently and offer a more integrated solution, we’re going to have places where we get whittled off," notes Waggener Zorkin. "Our task is to be sure we have a full-service offering. That is where the growth will come from."

In June 2014, the agency launched WE Infinity to boost its data mining and analytics. Going forward, the CEO is looking for more strategic partnerships, like the one announced in January 2015 with digital marketing firm the Garrigan Lyman Group.

Important 2014 campaigns included a strategic comms campaign for Safeway, including website design, showcasing sustainability efforts, media outreach, and social media amplification. The agency also partnered with Volvo on the reveal and rollout of the XC90 in the US market, and WE helped Microsoft navigate only the second CEO transition in the company’s history.

In March 2015, the firm promoted Dawn Beauparlant to the newly created role of North American technology lead. Jenny Moede shifted to the newly created role of chief business development officer from president of North America, but ultimately left in September and was named CEO of design and tech agency Citizen.

In April, Waggener Edstrom named Wunderman’s Kass Sells as president of North America. Sells had been with Wunderman since 2007 and was MD of its Seattle office and global client lead for Microsoft. He also did stints at IPG’s FCB and Draft-FCB and Omnicom’s DDB and Chiat/Day.

Staff turnover was 24.9%, an improvement over last year’s 31.3%, but US headcount did decrease significantly from 567 to 496 and globally from 828 in 2013 to 705 in 2014.

"We need to continue to change talent composition and add more account planners, social, digital, and integrated communicators, but there will be no ‘event’ [in terms of layoffs]," adds Waggener Zorkin.

The CEO feels the agency has gotten to a place where "we could start investing a lot more in ourselves and make sure we are resilient when there are client changes."

"We’ve done a lot of things we needed to do," she explains.

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