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Ketchum Pleon Select :  

20 Feb 2011

 

MOMENTUM
Ketchum’s global operations turned the corner in the fourth quarter of 2009 and have not looked back since, growing by 10 percent or so in a little more than a year since then. The EMEA operations have kept pace, in part because of acquisitions in the Middle East and Russia, in part because the merger with Omnicom-owned sister agency Pleon—while not without its challenges—has begun to deliver some benefits. Most notably, several clients are now served by offices from both sides of the marriage: FedEx, McDonald’s, Oracle, Pepsi, Philips and Procter & Gamble. The firm continues to serve several clients across multiple markets—Kodak in 11, Philips in 10, IBM in 19—while major wins in 2010 included the German Federal Ministry for Labour & Social Affairs, the Saudi Investment Fund, Intel, Pfizer, Pernod Ricard, Mattel, Nokia, Sony and Bayer.
 
REGIONAL REACH
The integration of Pleon added 18 offices (including six in Germany) to Ketchum’s existing network, and the EMEA operation now delivers more than 40 percent of Ketchum’s global revenues—about ?100 million or so. The twin pillars are the German operation, which is still home to about 280 people, making it the clear market leader there; and the U.K., where about 190 people staff the merged operation. Ketchum also has a substantial and first-rate operation in Spain, which has been one of the strongest performers—certainly relative to local market conditions—once again over the past 12 months. There’s strength in Austria, France (despite a difficult year in 2010), Italy, and the Netherlands. The Belgian operation, focused largely on PR rather than public affairs, is under strength compared to most of its peers, and the Nordic region (served via affiliate Geelmuyden-Kiese) is another place where the firm might look for growth in coming years. Two major additions in 2010 were the Middle East (where six TBWA Raad offices were integrated into the Ketchum Pleon network) and Russia, where the firm acquired long-time affiliate Maslov. In addition to its owned offices, Ketchum Pleon has 22 European affiliates.
 
GLOBAL REACH
Ketchum has eight offices in the U.S, including its worldwide headquarters in New York, where there’s a healthy balance of corporate, consumer and healthcare business, as well as the specialist (and rebranded) Ketchum Pleon Change employee communications operation; a Washington, D.C., office that provides healthcare, social marketing and public policy expertise; and operations in Atlanta, Chicago, Dallas, Pittsburgh, and San Francisco. Those offices are supplemented by several specialist subsidiaries, including consumer tech expert Access in San Francisco and word-of-mouth pioneer Zocalo in Chicago. Ketchum also has a Canadian office in Toronto and a Latin American hub in Mexico City. While Ketchum does not have the same reach throughout the Asia-Pacific as most of its competitors, it does have a formidable Greater China presence, with five offices: strong operations in Beijing and Shanghai, impressive offices in Hong Kong and Guangzhou, and a well-established Taiwan presence. The rest of the region, however, is served via an affiliate network, expanded last year after Ketchum formed a strategic partnership with Hakuhodo in Japan, and in a similar alliance with Korean giant Prain.
 
EXPERTISE
One of the attractive aspects of the merger was that both firms brought different strengths to the table. The result is a much better balanced portfolio of business in the region. Consumer (long a strength of Ketchum) is still the largest practice in the region, with good growth in Germany from clients such as P&G, but the corporate practice (traditionally the foundation of the Pleon business) has been perhaps the fastest-growing, with the Ketchum Pleon Change employee communications capability and the corporate responsibility specialty both enjoying good years. Ketchum’s other traditional area of expertise, healthcare, was supplemented by the 2010 launch of Inspired Science, a medical education capability, but has been flat. The firm has handled some financial communications assignments, and sees some opportunity for growth there, and works in public affairs through its own offices in London and Berlin and Omnicom-owned sister agency GPlus in Brussels. Digital and social media work has been growing, too, and is now integrated into the majority of accounts, particularly on the consumer side.
 
TALENT
With David Gallagher serving as president of Europe and managing director of the London office and Timo Sieg as chief executive office for the region, Ketchum Pleon is clearly seeking to present the combination of the two firms as a merger of equals, and to that end there has been a concerted effort to integrate executives of the former Pleon into the agency’s leadership structive. Last year saw the promotion of several EMEA representatives to partner level, including Pleon Italy president and European director of digital Gianni Catalfamo; chief executive of the Netherlands office Tim De Boer; Munich managing partner Simone Hoch; Dresden and Dusseldorf managing partner Dirk Popp; and Berlin managing partner Christiane Schulz. New additions included Denise Kaufmann, who relocated from New York to become managing director, client services, in London; Lazlo Kiss, who rejoined to lead the healthcare practice in Germany; and Lexis veteran Fiona Jolly, who was named director of the London brand marketing practice. There were some departures from the German operation, however, the most notable being former CEO Frank Behrendt.
 
CULTURE
Change management expert and Pleon founder Joachim Klewes has been leading the post-merger integration of the two firms, still very much a work in progress. One immediate benefit for the Pleon people was access to Ketchum’s professional development programme, now officially Ketchum Pleon University, with a focus in 2010 on digital expertise, client service and leadership. About 80 percent of the region’s employee participated during the year, spending an average of one day in training. Other initiatives include expanded use of social media (the firm’s Facebook page garnered 760 fans at launch) and social responsibility projects, including a global partnership with Room to Read and a 20th anniversary celebration in Spain that included a Christmas for Everyone donation to food banks. The firm ranked just outside the top 10 in the Great Place to Work Institute’s list of the top 50 places to work in the U.K., its fifth appearance on the list.
 
INTELLECTUAL LEADERSHIP
Long a pioneer in the use of research and measurement in public relations, Ketchum was one of the prime movers behind the Barcelona Declaration of Measurement Principles, which included a strongly worded condemnation of advertising value equivalency as a PR metric, with partner David Rockland president over the AMEC summit that led to the statement. The firm also conducted a Digital Democracy survey in the region, examining how parliamentarians in Europe are using digital and social media in political communications. On a global level, the firm launched Mindfire, a unique online community that will help crowdsource public relations ideas.
 
CAMPAIGNS
Recognized for the quality of its work in the U.S., where it has tended to dominate award competition, Ketchum Pleon has yet to establish the same kind of track record in the EMEA region, despite a string of successes for the Spanish operation (which has produced consistently good campaigns for recycling client Ecovidro) and SABREs last year for its work launching Philips’ Sensual Massager. The firm’s employee engagement work with Siemens included We Stand for Our Values, a campaign to reconnect employees with the company’s core values, as well as an award-winning corporate video. In London, the firm supported a partnership between Pfizer, Heart UK, and the Primary Care Cardiovascular Society to improve standards of care for heart attack survivors.
 
BRAND
The merger of Ketchum and Pleon has been well-received in most of Europe, strengthening the firm’s brand and raising its profile as a genuine competitor for pan-regional assignments. In Germany, however, the buzz remains resolutely negative, with the merger regarded by many observers as an admission that Pleon’s strategy of building a German-based multinational to rival the Anglo-Saxon giants was unsuccessful. The firm will need to work extra hard to ensure that the merger is seen as a coming together of equals rather than the takeover of a proud German brand by a giant American multinational.
 
THE FUTURE
The first priority is stabilizing the German operation following the departure of Behrendt, and returning to growth in what is clearly a key market. Once that is accomplished, however, Ketchum Pleon clearly has a strong foundation on which to build one of the strongest networks in the EMEA region. It is represented in every major market on the continent, and is among the market leaders in many of those markets. There’s a case to be made for a stronger, branded Brussels operation (although the GPlus relationship has generally served Ketchum well) and for acquisitions in the Nordics and perhaps Turkey, just to round out the regional offer.

 

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