CHICAGO: Edelman’s organic global revenue dropped 5.7% in 2020 to $840 million, not including the effect of currency fluctuations.
When you include those fluctuations and the impact of acquisitions, Edelman's global revenue dropped 5.8%.
Those numbers include the revenue of United Entertainment Group but not sister DJE Holdings agency Zeno Group.
U.S. organic revenue shrank 4.2% to $531 million. The largest drop occurred in the Asia-Pacific region, where organic revenue fell 9.6% to $96 million. Canada was next, with a 9.3% decrease to $26.2 million. In EMEA, revenue fell 8.4% to $170 million.
Organic revenue in Latin America increased by 5.1%, but only after correcting for currency fluctuations. Without those corrections, Latin American revenue dropped 10.7% to $17.2 million.
The numbers reflect the pandemic-induced challenges faced by the agency, long the world’s largest by revenue. On Wednesday, global CEO Richard Edelman said his firm is on the rebound and it has “achieved a V-shaped recovery.”
“We had budget cuts in travel and tourism, energy and [quick service restaurants] of a magnitude between 33% and 100% from various clients because things stopped, and then we had Samsung Mobile also leave us at that time,” said Edelman. “But the great news is that for November, December and January, we are at or ahead of last year.”
The agency’s healthcare business grew almost 10% last year, Edelman said, and it is now tied with technology as the firm’s largest sector. Financial communications work grew by 22%, particularly restructuring and mergers and acquisitions activity. The agency’s brand work also increased by 8.8%.
In March, Edelman told his approximately 6,000 global staffers that their jobs would be safe during the pandemic. However, more than two months later, he had to go back on that pledge and announced cost-cutting layoffs, furloughs, pay reductions and reduced work weeks in reaction to the economic effects of COVID-19.
All furloughed employees were rehired, Edelman said on Wednesday, and senior staffers’ salary cuts were fully reversed by mid-October. He added that employees from account executives to senior account supervisors will get 5% bonuses on February 15, and the Edelman family has decided to release more shares to senior employees who are non-family members.
“The family went down from 88% to 80% ownership in the firm,” Edelman said. “That's a real vote of confidence in our senior talent.”
The agency is spending as part of a strategy to be as competitive as possible as the pandemic wanes, lockdowns are eased and the economy recovers from the effects of COVID-19.
“Edelman always comes out of recession strongly,” he explained. “After the recession of 2001, which really lasted until 2003, we jetted ahead. Similarly, after the 2008 recession, we jetted ahead, come sort of 2009, 2010. We want to see that same sort of effect here, and we need our people bought in. We need the junior team and the senior team all excited.”
The agency won significant clients in 2020 including FedEx in the U.S. and Europe, Clif Bar in the US, New York Presbyterian Hospital, Primark in the U.K. and John Deere in the U.S. won by UEG.
This story was updated on February 3 with comment from Edelman.