Holding company CEOs: Momentum, integration drive PR forward

The CEOs of the world's largestĀ­ holding companies credit integration for 2015's success stories.

Yannick Bolloré, chairman and CEO, Havas

How did PR perform for Havas in 2015? Where does its performance stand in relation to other disciplines within the group?
The Global Collective is 1,200 PR pros and two dozen agencies strong, and in most markets we rank among the top five in size and/or creativity, but usually both.

In 2015, global fee income was $200 million-$225 million across owned offices, with $45 million-$55 million in the U.S., including Abernathy MacGregor and the recently acquired Havas Formula.

With 100 staff across offices in New York, Los Angeles, and San Diego, Havas Formula has expanded our U.S. offering through its impressive client roster and track record of implementing impactful PR, social, and experiential programs. These strong results are the outcome of an effective strategy centered on collaboration and integration among the Collective’s expertise, to provide clients with an efficient and innovative service.

One example of our global collaboration is the United Nations Foundation’s remarkable event, "Earth to Paris-Le Hub," held in December at the Petit Palais and UNESCO headquarters in Paris, to tie in with COP21 and raise awareness of climate issues.

HavasEvent, Havas PR North America, and Havas Paris live-streamed the event in the six official UN languages ­— 60 venues were set up in 19 countries to screen the event, which generated over 38,000 tweets and reached an audience of more than 50 million people.

How important is it for Havas to grow its PR presence in the US so it contributes a bigger percentage of the group's overall PR revenue? What plans are in place to achieve this?
We strive to grow our PR presence in the U.S., and we’re pleased with the North American agency’s growth plans. These include identifying strong potential markets and opening more regional shops in our quest to live the hyper local we’ve been preaching for a decade. We also plan to scout out smart, strategic shops for acquisitions to shore up our presence in important regions.

In addition, we want to own our specialty areas, including real estate, climate/sustainability, and healthy and indulgent eating.

What are the prospects for PR in 2016? Is the effect of events such as the Rio Olympics, European Football Championships, and US presidential election as important as it used to be?
We’re seeing the start of a prosperous and demanding year ahead in 2016. The reboot of our consumer healthcare business, including the acquisition of Just:: Health Communications last summer, is spurring growth along with more global ongoing account work for the UN Foundation, Sodexo, and Pringles.

It remains important to follow the news cycle ­­— be that the Rio Olympics, U.S. presidential election, or Chinese New Year ­­— to help our clients be the news. Today’s 24-hour news cycle means that, in addition to these global events that captivate audiences, there are also smaller, local, and regional holidays and occasions that drive news. It’s important that PR practitioners consider all types of events to create headlines for our clients.

Michael Roth, chairman and CEO, Interpublic Group

How did PR perform for IPG 2015? What is the secret sauce behind firms such as Weber Shandwick and Golin outperforming the market?
Our PR agencies grew in excess of IPG’s overall organic growth rate of 6.1%. This market-leading performance was driven by Weber Shandwick and Golin.

Both Weber and Golin continue to be leaders in PR and the broader marketing services environment, in terms of looking at their portfolio and converting to the digital and social environment. As a result, we see them taking market share because of their expertise in content marketing and new thinking in terms of the PR category.

All our PR agencies — including Current, Devries, PMK-BNC, Rogers & Cowan, and Spong ­­— have developed strength in digital, social, and content marketing and combined those skill sets with their historical strength in earned media. Their heritage in expert storytelling and engagement gives them an edge in creating the right content to engage across platforms in a fragmented world.

How is content production and cross-discipline working changing the way IPG's PR and other agencies operate - both individually and in partnership?
A hallmark of IPG is our open architecture model. It’s a way of collaborating that brings the best of IPG to solve a client’s needs, which is a key factor in delivering an integrated marketing solution that works across all channels. Our ability to deliver this high level of collaboration has been a central driver of our company’s growth.

Because of PR’s strengths in leading in the digital, social, and content environment, we see them taking on more integrated assignments across paid, owned, earned, and shared. This is important because clients are increasingly looking for integration in their communication strategies, and we see in some instances PR taking more of a leadership role.

Our PR firms have been named social, digital, and advertising agency of record for a number of clients. Through their content offerings, our PR units continue to go broader in advising companies how to place the right idea across any of these channels. Because of this, they’re a key partner on many of our open architecture solutions.

What are the prospects for PR in 2016? How do you replicate two successive years of significant growth in your main agencies and how do you bring your other firms up to the same level?
I’m bullish on 2016 as another strong year for PR. The change in the media and communications landscape continues to accelerate. That requires constant innovation and a focus on making sure our clients and their needs are at the center of our strategy.

All our PR firms are stepping up to take advantage of the growing opportunity for their services. Beyond competitive advantages in the digital and social arena, they play an increasing role advising companies how macro issues impact company reputation – economic issues, regulatory pressures, social impact and sustainability, employee engagement, and so on. Public relations is increasingly in a position to advise clients how to grow and protect their reputation in a world in which all these forces play a major role. It’s never been a better time for PR.

John Wren, president and CEO, Omnicom Group

How did PR perform for Omnicom in 2015? To what do you attribute the wide discrepancy between revenue growth posted by firms in the DAS unit compared to Omnicom's ad agencies?
In terms of financial performance, PR was down slightly compared to 2014 ­­— by 1.4%. Q4 performance contributed to this result, as well as we faced a difficult comparative to last year’s Q4 performance with organic growth in excess of 8%.

In terms of the work being done across the agencies, we saw an outstanding performance in 2015. Once again, agencies were highly recognized winning a number of Cannes Lions and PRWeek Awards.

What are the aspirations for the newly formed Omnicom Public Relations Group and how big a factor in the new structure is the drive to improve margins within the network's PR businesses?
We see great potential in our PR agencies. The strength of those individual brands ­­— ranging from global agencies like FleishmanHillard and Ketchum to specialty brands such as Cone Communications and Mercury Public Affairs—and the importance we place on them sets us apart in the marketplace. Omnicom PR Group preserves those individual brands while addressing changing client needs and providing support through a focus on Omnicom’s core strategies for growth — talent, collaboration, client service, innovation, and technology.

Profitable growth is certainly one of our business goals. But the creation of Omnicom PR Group is a much larger strategic move as we look to the future and where our agencies will make an impact and deliver for our clients. This will be a differentiator for us.

What are the prospects for PR in 2016? Is the effect of events such as the Rio Olympics, European Football Championships, and US presidential election as important as it used to be?
The importance of authentic engagement with customers and stakeholders will continue to grow. Reputation goes hand in hand with this. Companies have come to recognize just how valuable ­­— and vulnerable ­­— brand reputation can be, and the importance of having a proactive strategy in place to manage it.

PR plays an instrumental role in this. And we’ll see more integration. It will drive the conversation and how agencies show up for their clients. At Omnicom, we do integration better and have been doing it longer than anyone else. We’ll continue to build on our strength there.

The impact of events such as the Olympics and election always needs to be considered within the framework of the current environment. We certainly embrace the opportunity they create, but our business is significantly more diversified in terms of geography, clients, and services such that these events impact our business to a lesser degree than in times past.

Maurice Lévy, CEO, Publicis Groupe

How did PR perform for Publicis in 2015? Where does its performance stand in relation to other disciplines within the group?
In 2015, our PR business showed a return to growth with single-digit organic growth of between 4% and 6%. It was a year of two halves with strong improvement and momentum for the PR business in the second half of the year. This strong momentum has carried over into 2016.

MSLGroup has had a turbulent few years in terms of senior leadership changes, especially in the US. How will the integration of MSL within Publicis Communications improve matters?
We have high expectations for the opportunities created through the integration of MSLGroup within Publicis Communications. We aim to deliver new value to our clients thanks to a more complete, holistic, and integrated service offering. This is what clients across our network have told us they want and expect from us.

PR leaders around the world are developing stronger relationships with leaders of other group brands and networks. These relationships are themselves powerful business builders. The integration of MSLGroup into Publicis Communications will help not only elevate our PR business, but also make PR services and thinking more accessible to clients throughout the group. The strong momentum we are experiencing will generate more stability for MSLGroup locally and globally.

What are the prospects for PR in 2016? How important is it to retain MSLGroup as a standalone brand rather than merging it under the Publicis banner?
The prospects for PR growth in 2016 are very positive. In several cases, PR is now leading the charge when it comes to integrated communications with campaigns being developed on platforms that are PR platforms at their heart.

Our new business model was developed to support our brands, not to dilute their value. In that light, MSLGroup remains the only global PR network in the Publicis Groupe and one of the strongest and largest networks of its kind in the world. We continue to invest in the MSLGroup brand around the world: we have expanded it globally to Sri Lanka, Vietnam, and Nigeria since the start of this year. And, we have continued to attract new world-class talent.

I join MSLGroup’s global CEO Guillaume Herbette in his optimism about the future. Our recent reorganization has been great for our PR business and I am looking forward to seeing MSLGroup have a very strong 2016.

Martin Sorrell, founder and CEO, WPP

How did PR and public affairs perform for WPP in 2015? What do Burson-Marsteller and Hill+Knowlton need to do to reach the levels achieved by Ogilvy PR and Cohn & Wolfe?
Our PR and public affairs business delivered another good performance in 2015, which improved as the year went on. Growth accelerated in the second half and the final quarter was particularly strong, with constant currency revenues up 8.2%. All regions did well, with especially strong growth in the UK, Latin America, and the Middle East & Africa.

Ogilvy, Cohn & Wolfe, and the specialist businesses in the US, UK, and Germany had a very good year, and although Burson and H+K were less buoyant, their performance was solid. It’s also worth noting that they operate largely in a different sector of the business.

How is WPP evolving its structure to encourage cross-discipline cooperation between its agencies? What examples can you give of horizontality in action where PR played a significant part?
Cross-group collaboration has long been a hallmark of WPP’s approach to client service and we have led the industry through our horizontal "Team" model. We now have 45 cross-group account teams for clients ranging from Ford, Unilever, and IBM to Coca-Cola, Procter & Gamble, and GlaxoSmithKline.

Over 38,000 of our people work on these accounts and they represent more than a third of our total revenue. We take it as a compliment that others are now trying to copy what we’ve done.

There are countless cases of PR and public affairs businesses playing a key role in Team accounts and assignments. The latest winner of our annual Partnership Program competition is one such example. The work of Chemistry (the team of WPP agencies responsible for Johnson & Johnson’s pharmaceutical business at Janssen) for the Hepatitis C drug Simeprevir was rated "10 out of 10" by the client. GCI Health, Consitor, and Burson-Marsteller each had an important part in this success.

More broadly, our PR and public affairs businesses have benefited significantly from integration with our social and data capabilities.

What are the prospects for PR in 2016? Is the effect of maxi-quadrennial events such as the Rio Olympics, European Football Championships, and US presidential election as important as it used to be?
The prospects are good but, in line with broader trends in the industry and beyond, unspectacular. We live in a slow-growth world and clients continue to be risk-averse and focused on costs. So the pattern for 2016 looks very similar to 2015, but with the bonus of the maxi-quadrennial events of the visually stunning Rio Olympics, the UEFA Euro Football Championships and, of course, the United States presidential election to boost the rate of growth by 100 basis points above GDP growth.

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