Principals: Rob Flaherty, senior partner, CEO, and president; David Gallagher, senior partner, UK chairman and CEO, Europe; Denise Kaufmann, partner and CEO, UK
Ownership: Omnicom Group, as part of Diversified Agency Services division
Subsidiaries: Access Emanate Communications, Capstrat, Harrison & Shriftman, and MMG
Offices: Global 76; US 29; UK 1
Revenue: Global $500 million to $550 million; US $300m to $350m; UK £25.6m (estimate); APAC $23m (estimate)
Headcount: Global about 2,500; US about 1,600; UK about 220; APAC about 90
Last year Ketchum CEO Rob Flaherty described 2014 as a time of "transformation." He used the same phrase a year later to describe 2015.
Organic growth last year registered in low single digits over 2014, as did profits, compared to the "high single digits" in the 12 months prior. The U.S. performed better than that, with New York the principal driver of growth, including wins such as Dun & Bradstreet and a seven-figure account for plumbing products company Kohler among $93 million of new business gained across the firm.
"We’re changing from within so we can offer clients the most progressive work," Flaherty says. "This encompasses new services, people, and training."
Ketchum’s growth was significantly better than Omnicom’s overall PR performance. The Dale Adams–led Diversified Agency Services unit — which houses all the network’s PR firms — shrank 1.4% year on year on an organic basis in 2015.
Other client wins included picking up 14 General Mills brands in its Chicago office, Monster.com, Cisco, BMW, Etihad Airways, and Norwegian Cruise Line Holdings. Incremental organic growth came from the firm’s Pernod Ricard, Kimberly-Clark, Roche, H&R Block, and ExxonMobil accounts.
Ketchum lost the U.S. FedEx brief to Burson-Marsteller last May after two decades, but continues to work for the company in Europe, Latin America, and Asia-Pacific. In January this year, chairman Ray Kotcher transitioned to a non-executive chairman role advising the agency and DAS.
"The impact of constant currency was hugely anomalous in 2015," says Flaherty. "It took almost $30 million off our revenue, compared to about $1 million in previous years. We get 40% of revenue outside the U.S. and there was a once-in-two-decades impact of the strong dollar and weak foreign currencies."
Flaherty now reports to Karen van Bergen, following her elevation from global CEO of Ketchum’s sister agency Porter Novelli to the newly created role of CEO of Omnicom Public Relations Group, where she oversees all the holding company’s PR operations.
At the start of 2016, Access Communications merged with Ketchum sister firm Emanate to form Access Emanate Communications. Emanate founder and CEO Kim Sample left the agency, subsequently re-emerging at Text100. In January, Access Emanate lost its KFC account to Edelman.
In November Zócalo Group was divested from Ketchum and merged with Omnicom sister agency Critical Mass.
Ketchum’s Washington, DC, operation struggled as work with the Russian Federation and Gazprom ended. Bill McIntyre, who came over from Edelman in December 2014 to direct Ketchum’s DC office, left after a year. Kathy Jeavons, who ran the Russia business, left in September, taking an SVP role at Story Partners. Global staff turnover in 2015 was 25%.
Jerry Olszewski took over as MD in DC in addition to his chief client officer role. Nicole Mann came on from Teva Pharmaceuticals as SVP and director of public and corporate affairs in DC.
"We had to dig out of losing Gazprom and Russia," explains Flaherty. "The book of business had declined. We’re doing a lot better now and [ Jerry’s] doing a great job." New business in DC includes work for associations, healthcare, and government social marketing assignments.
Ketchum Greater China EVP Sean Fitzgerald moved from Shanghai to Dallas to become director of the firm’s North America corporate and public affairs practice. Capstrat president Karen Albritton was named CEO of the Ketchum subsidiary in January as founder Ken Eudy transitioned to chairman.
‘Like an agency of the future’
Ketchum’s content creation platform StoryWorks was extended across every U.S. office and is now in 25 locations globally, which Flaherty says will rise to 40 by the end of 2016.
"Most of the staffing comes from Ketchum Digital, which was up 45% in the year," says Flaherty, adding that the offer spans services including social listening and research; account planning; creative; content creation such as video, photography, and animation; earned media; paid amplification; and analytics.
"It’s like an agency of the future, less about physical space, more the philosophical move to always-on marketing," he says. "StoryWorks’ number one purchaser in New York is corporate clients, not brands."
Ketchum also created Screen Grabbers to connect clients with YouTube stars and influencers, which Flaherty dubs "a huge market."
60 Minutes producer Lori Beecher, who joined Ketchum as EVP of media and content strategy in August 2014, hired a dozen people, including senior animator Josh Sachs, who joined from Deep Focus, and analytics expert Chris Albert from Havas Media.
"It’s a renaissance of storytelling that’s bringing high quality and speed to content creation," says Flaherty. "It’s a sign of the shift to us from ad agencies, movie studios, and TV networks."
These developments complemented a compulsory training program for all 2,000 client-facing staffers and initiatives such as Ketchum’s Spark Tank to encourage innovation at all levels and incubate business ideas organically that end up as new client services.
"I’m pushing for us to walk into the room with the campaign-leading idea," says Flaherty. "There have already been instances where the client bought into that and the ad agency fell in behind us."
UK & EMEA
Last year Ketchum became fully integrated into the Omnicom Group through its move to Bankside, creating an opportunity for the agency to relaunch its UK business (one of the largest in the network) and embrace new ways of working.
The office move from east London’s Shoreditch saw Ketchum join sister agencies FleishmanHillard Fishburn and Emanate in one building.
Over the past year similar moves have taken place in Europe, with Ketchum taking up new premises in Brussels and Milan, to create a more joined-up structure. David Gallagher, CEO, Europe, explains: "It reflects a concerted effort to put us in a group of other specialists – physical proximity is important to make that work for clients."
Denise Kaufmann, CEO, London, adds that becoming "globally seamless" differentiates Ketchum from other networks: "We didn’t want to be an American or Anglo-American network in Germany or France; we wanted to be a leading French or German consultancy."
Revenue growth for the UK agency was flat overall, but there was some impressive growth in healthcare and corporate.
Historically Ketchum has been dominated by its consumer practice, representing numerous P&G brands. However, there is now a more equal distribution of client work following recent boosts to the healthcare, corporate and public affairs practices. The distribution of client work is now roughly 40 per cent for consumer, and 30 per cent each for corporate and healthcare.
UK headcount remained unchanged – around 220 – with the exception of a few senior hires. In April 2016, the agency hired Saska Graville, former deputy editor of Red magazine, as a director, while Andrew Ferguson joined in November last year, from Unity.
Kaufmann explains that the restructuring of the business has increased flexibility for employees. "Now, if someone has a real interest in sports and entertainment they can join that client team," she says.
The restructure has also been supported through the appointment of deputy CEO Jo-ann Robertson and COO Deirdre Murphy, who both joined at the tail-end of 2015.
In terms of new business, UK clients to come on board over the past year include Acer computers, ECCO shoes and furniture retailer Dwell. The agency is trying to break away from its global status and be seen as an equal force in the UK. To do this, there has been a concerted effort to attract UK brands and household names on which staff want to work.
Across EMEA, revenue was flat, although France and Italy both grew. The best performing sectors were crisis and financial comms. In the past 12 months Ketchum was hired to work across several EU markets by clients including Twitter, BMW, Rolls-Royce, MasterCard, Anheuser Busch InBev and Red Bull.
The consumer sector continues to dominate the agency’s EU business, accounting for roughly 55 per cent, followed by corporate (25 per cent) and healthcare (20 per cent). Over the coming months the agency will focus on bringing its three German offices closer together, to solidify its hold on the German market. The agency lost none of its top 10 clients last year.
Key hires outside the UK include Thorsten Sperlich, formerly head of brand PR for Coca-Cola in Germany, who joined in November last year to head up the Berlin office. Lucia Ricchetti was promoted to chief operating officer in Milan.
Meanwhile in June 2015, Ashraf Shakah was appointed managing director of Ketchum’s Middle East operations, overseeing six offices and eight affiliates in 12 countries in the Middle East and North Africa region. He joined Ketchum from BPG Cohn & Wolfe, and so far under his leadership the agency has undertaken significant work with the UN High Commissioner for Refugees and its Voices for Refugees campaign.
The agency’s focus in Dubai is to bring in strong senior Arabic-speaking talent, while Ketchum’s Sub-Saharan Africa network is thriving – now operating in 16 countries. "I’m certain that’s where the next big thing is coming," says Gallagher. "Clients are looking at one of the few under-exploited middle classes and seeing what offers their agencies have with them. We are determined to be ahead of the rest in the region."
For Gallagher, finding and retaining talent is always going to be the agency’s biggest challenge. Despite this, he and Kaufmann are confident for the year ahead.
"When you sit with 30 other agencies you have access to high quality production facilities and a 24-hour social media newsroom, and this is very attractive to clients. We are pretty bullish about 2016," he says.
There were two major highlights for Ketchum in Asia Pacific last year. "We made bold moves in strengthening our leadership," says Jon Higgins, senior partner and CEO, International.
"There was also a big jump forward in the effectiveness of our digital and social work as evidenced by the most awards we’ve ever won in the region in a single year."
Due to economic challenges in China, Ketchum’s Asia-Pacific region experienced less robust growth.
To overcome this obstacle, Ketchum invested time and resources to strengthen their client offer, such as expanding their highly successful Ketchum Change business to the region and adding a strong exclusive affiliate in Australia, the Hausmann Group.
Higgins praises the Hausmann group for being "a creative powerhouse, particularly strong in brand marketing, digital/social and healthcare."
In terms of financial performance, markets like Korea, India and Singapore stand out. "Korea’s business was phenomenal," says Higgins. "Korea demonstrated the highest growth of any market in our global network."
Business in India also experienced double-digit growth, while the firm’s Singapore office remains a top performer. New account wins in the region include P&G brands like Head &Shoulders and Braun, Diageo, Blue Diamond Almonds, HP Enterprise, Booking.com and Tag Heuer.
On top of attracting new business, Ketchum managed to retain many of its existing clients. Higgins attributes this to the firm placing client success first and being passionate about service.
With senior-level involvement with every client, the firm is able to spot and respond to important changes in clients’ business environments and creating competitive strategies for each one.
Ketchum’s success last year was due to bringing in new leadership to boost their business. "We made bold moves in leadership that is paying off nicely," Higgins says. "The new leaders have made a positive impact that has paid off immediately."
To highlight the growth potential for Ketchum’s Asia-Pacific operations, in October 2015 partner Simeon Mellalieu was named client development director for the region. Previously he served as general manager of the Hong Kong office.
Another successful senior hire was Bruce Shu, who was named managing director of Ketchum Greater China in April 2015. Prior to joining Ketchum, Shu held leadership roles at Grayling and Citigate Dewe Rogerson, led corporate comms at ABN AMRO and helped to found CNBC Asia.
"Bruce did a terrific job coming right in, he’s a great talent," Higgins says. "He brought in new thinking and new business."
Ketchum Change expanded to Asia and Gretchen Huestis relocated to Singapore in August 2015 to establish Ketchum Change’s presence in the region as SVP and regional director.
Previously she served as a director with Ketchum Change in London for two years. In her new role, Huestis focuses on change management, talent development, employee engagement, and creative solutions to drive demonstrable behaviour change and business results.
As a vindication of the firm’s strategy to shuffle things at the top, Ketchum’s leadership changes came along in a year that the agency experienced it’s most successful 12 months to date in terms of industry recognition in the region.
Last year, Higgins mentioned that finding the right talent was a problem and he says the situationdidn’t improve much in 2015. "The lack of qualified, exceptional talent has been an obstacle to growth, not just for us but it’s an industry challenge."
To solve the talent problem, Ketchum hired Trissi Yang, head of HR. "Trissy has done a phenomenal job identifying talent, and has implemented a robust training programme," says Higgins.
The future looks bright for Ketchum. "2016 will be a very good year for us," Higgins predicts. "The key components in 2015, the superior leadership we put in place, will take root and pay off. We’ll also continue to invest strongly in digital and social."