Say hello to the first $1 billion PR agency

A strong rebound after a tough pandemic year is propelling the world’s largest PR firm toward a totemic financial milestone – and this rising tide reflects a lift for all boats.

Richard Edelman embraces the prospect of leading a $1 billion PR firm (Credit: Getty Images).

It has been speculated upon for years and once seemed unattainable but the era of the first $1 billion PR agency is almost upon us.

Edelman this week announced its 2021 financial performance and posted revenues of $984.9 million, up 15.4% in constant currency terms year over year - a big bounce back from its travails of 2020.

The world’s largest PR firm’s official financial year actually runs from July through June, so by the time its formal numbers are released this summer it will almost certainly have passed the psychological $1 billion revenue mark. It recently bought a $12 million Brooklyn-based integrated content agency called Mustache, which numbers Netflix and Under Armour among its clients.

It’s only a number but that’s great news for Edelman. It also bodes well for the entire industry, such is the bellwether nature of the Richard Edelman-led firm.

Compared to pre-pandemic 2019 – a more credible like-for-like measure – Edelman is up 10.4%.

Interpublic Group’s Dxtra unit, which contains its main PR firms including Weber Shandwick and Golin, also reported full-year numbers this week, growing 10.6% organically in 2021 to $1.3 billion.

Weber apparently finished up mid- to high single digits after a slow start to the year. It divested a number of smaller offices in Asia. PR within Dxtra overall was up high single digits. Dxtra was up 6.1% organically compared to 2019, with PR mirroring that performance.

Omnicom PR Group – including FleishmanHillard, Ketchum, Porter Novelli and MMC - was up 6.3% organically in 2021 to $1.39 billion, up just 4.4% in Q4. That likely reflects comparisons with the 2020 election year, when Fleishman’s political advertising firm GMMB benefited from hundreds of millions of dollars in media planning and buying monies spent on behalf of Democratic candidates, parties and PACs.

Fleishman had a very strong year and, overall, OPRG’s public affairs, corporate and healthcare operations did well. CPG was slower due to issues such as supply chain difficulties and travel and tourism is still recovering after the pandemic-induced hiatus. OPRG was up around 4% in 2021 compared to 2019.

Edelman hasn’t posted growth of the scale it achieved in 2021 for a decade and certainly got back at it after a difficult period in 2020, when year-over-year revenues shrank 5.7% and Richard Edelman had to renege on his desire not to cut jobs once the pandemic hit, eventually letting around 400 people go. Last year, the firm brought on more than 800 people.

The remorseless CEO sees the performance as a reward for committing to the concept of being a communications firm a few years ago and investing in creative, content, data and analytics personnel, which now account for around 1,500 people or a quarter of the firm’s overall staff – posts that didn’t exist a decade ago. Creative, data and digital are now properly integrated into the whole business and not standalone units.

Healthcare is now the largest part of Edelman’s business, driven by work for clients including Pfizer, AstraZeneca, Merck and Johnson & Johnson. Edelman grew its creative work 45% last year. Employee engagement activations were up 35% in 2021.

Its financial PR offer is now at $50 million, up from $10 million when Lex Suvanto started at the firm. Edelman Global Advisory is also growing strongly, led out of DC by Deborah Lehr who joined the firm as a result of its acquisition of strategic consulting agency Basilinna, with plans to grow that segment from $30 million to $100 million.

The agency’s growth was consistently good globally, with London up 20%, Germany 35%, Africa 20% and LatAm 40%.

While BCW, Hill+Knowlton and Ogilvy owner WPP has yet to report 2021 numbers, it really does seem to be the case of a rising tide lifting all boats.

There’s a ton of attention on the communications function at all corporations and organizations and these clients need help from their agency partners in driving brand growth, reorganizations, purposeful business and employee engagement.

As we hopefully get set to finally emerge from the COVID chrysalis, the PR industry can afford to be bullish about 2022.

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