Principal: Lynn Casey, CEO and chair
Offices: Chicago; Los Angeles; Minneapolis; New York; Norfolk, Virginia; Richmond, VA; San Francisco; and Washington, DC
Last year was "unexpectedly challenging" for growth, says Lynn Casey, CEO and chair of Padilla — formerly Padilla-CRT before its rebrand this spring. "In 2016, we did not plan to go backward."
Overall revenue increased, from $34.8 million in 2015 to $39.4 million in 2016, but that uptick was not from organic growth, which was down slightly. Instead, the extra revenue came from its acquisition of FoodMinds in May.
Combination of skills
FoodMinds is headquartered in Chicago and has a small office in San Francisco. The acquisition made Padilla the third largest food-and-beverage group in the country among independent agencies.
Padilla had forecast modest top-line growth versus the year prior, knowing it would be focusing on the integration of FoodMinds. However, in H2 2016, Padilla lost two top 10 clients.
The first was Rioja Wines from Spain, which hired Finn Partners following a competitive pitch. Padilla had the business for a decade. The second was an unnamed client with a new CEO, who wanted an agency he had worked with before to work on the account.
"We’ve since made up about two-thirds of that lost revenue with new clients," notes Casey. In November, Welch’s, the National Grape Cooperative’s processing and marketing subsidiary, picked Padilla for consumer PR and media relations. The agency was introduced to Welch’s by FoodMinds, which provides strategic nutrition comms initiatives. Ketchum was previously Welch’s PR AOR. "We knew we had opportunities to leverage each other’s strengths, but I have constantly been surprised at the amount of interaction with FoodMinds," she adds.
Padilla made a key hire at the senior level. Expressing a desire last year to grow in healthcare via acquisition, the agency instead hired Fred Lake as SVP, leader, health practice. He formerly worked at Cooney/Waters Group.
The firm is looking for big gains in healthcare this year. At the start of 2017, Matt Kucharski was promoted to president, succeeding Mark Raper, who moved into the new role of chief counsel officer. Kucharski took on oversight of Padilla’s health practice with the promotion.
The agency is also focused on building its 30-person creative unit, an area Casey says is more challenging to recruit for than other departments. "There is a lot of competition for excellent digital-creative talent," she explains. "Frankly, some advertising talent has not been exposed to the PR agency moving toward being truly omnichannel. It can take us awhile to find those people who want to be part of something that is evolving."