MOMENTUM
Worldwide growth of close to 19 percent in 2010 means that Edelman now has global fee income of around $540 million—enough to make it the largest public relations firm in the world by our reckoning. Growth in the US was similarly impressive (18.4 percent, excluding the 2010 acquisition of Texas-based Vollmer PR) and the firm now derives almost $350 million from its home nation. It serves a roster of major blue-chip clients that’s as impressive as any; top 10 clients include Adobe, the American Petroleum Institute, AstraZeneca, eBay, HP, Microsoft, Pepsi, Pfizer, Starbucks and Unilever, most served by multiple offices and practice areas. The firm continues to be regarded as a new business powerhouse—wins in 2010 included Jim Beam, Best Buy, Bloomberg, ConAgra, Harley Davidson, HSBC, Levi Strauss, Mars, the PGA of America, Sara Lee, Time Warner Cable, United Airlines Visa, Volkswagen and Western Union—but Edelman has also tightened up on client service and says it hasn’t lost a “major” client in the past three years.
REGIONAL REACH
Edelman is almost certainly now the largest public relations operation in North America, where its $350 million in US fee income is supplemented by a very healthy $20 million in Canada (where growth was close to 30 percent in 2010). It is among the top two or three firms in pretty much every major market: a leader in New York (which accounts for about a third of US revenues), Washington and Chicago; a major player in California, where it has offices in Los Angeles, Silicon Valley (the former A&R, one of the best PR acquisitions of the past decade), San Francisco (which almost doubled in size last year thanks to new assignments from eBay, Levis and Schwab) and Sacramento; and a presence in Atlanta, Orlando, Seattle and Portland. Perhaps the most notable development of the past 12 months came in Texas, where Edelman supplemented its own branded operations with the acquisition of local market leader Vollmer.
INTERNATIONAL REACH
In Europe—now under the leadership of Robert Phillips—the flagship UK operation continues to account for about half of the firm’s regional revenues, and continues to rank among the market leaders, particularly in consumer and healthcare categories. The second largest market is Germany and the firm is a top five player in Italy and remains a significant force in Paris, the Netherlands, Ireland, Spain, and Russia, with emerging capabilities in the Middle East. In Asia, where former EMEA chief David Brain took the helm at the end of 2010—Edelman has 16 offices in eight Asia-Pacific markets, providing coverage of all the major markets while handling emerging countries through affiliates. In China, there are more than 160 people divided between the Edelman and Pegasus brands, supplemented by substantial operations in both Hong Kong and Taipei. The firm has solid operations in Singapore,Tokyo and Seoul and in Australia (Sydney and Melbourne offices). In Southeast Asia, there’s a market-leading presence in Indonesia and smaller operations in Malaysia, and the Indian operations are growing.
EXPERTISE
Having been among the first movers in digital, Edelman has what is probably the biggest digital and social media practice in the public relations industry, accounting for better than 10 percent of its revenues, or about $66 million, and capable of competing successfully with ad agencies, specialist digital firms and other PR consultancies. More significantly, digital is now integrated seamlessly into pretty much everything Edelman does. The tech practice, transformed five years ago by the A&R acquisition, has been the other major growth story in recent years, but the firm continues among the leaders in its traditional areas of strength—consumer marketing, food and beverage, and healthcare—and in the corporate reputation and public affairs practices where it has been growing steadily over the past decade. The past 12 months have seen the continued growth of the goodpurpose CSR practice and the introduction of integrated marketing brand Ruth and marketing consulting offer Fathom & Hatch. The firm’s StrategyOne research unit, meanwhile, continues to contribute both revenues ($12 million last year) and intellectual firepower.
TALENT
Over the past couple of decades, Richard Edelman has built a hugely impressive and impressively stable senior management team—US chief executive Matt Harrington, chief innovation officer Nancy Ruscheinski, western region chair Gail Becker and more—and continues to make big investments. In 2010 it supplemented that team with some top quality talent, included cause branding pioneer Carol Cone, who joined as executive VP, citizenship; digital guru David Armano as executive VP, innovation and integration; former MWW Chicago general manager Kathy Fleweger as senior VP, crisis and change; California public affairs veteran Steve Schmidt in the Sacramento office; James Williams as general manager in LA; and Dave Gilbert in an HR role. Alan VanderMolen returned to the US from his leadership role in Asia to head practices, specialties and insights, and Rick Murray transferred out of his digital position to lead the Chicago office.
CULTURE
Edelman’s culture of entrepreneurialism and innovation continues to serve the firm well when it comes to attracting talent and new business, while a more structured overlay of professional and career development programming, including an Edelman Fellows program that includes interoffice transfers, ensures that talent is nurtured. The result is that Edelman has consistently ranked among the Best Large Agencies to Work For in our annual employee survey (it was number two on that list earlier this year). An emphasis on collaboration means that most the firm’s top 25 clients are now served in more than 10 markets, and by an average of four or five practices, while a focus on quality means client net promoter scores have gone up and turnover is way down from the bad old days, when Edelman was better at winning business than keeping it.
INTELLECTUAL LEADERSHIP
Edelman’s Trust Barometer—now in its 11th year—remains the most valuable and valued piece of research in the public relations industry, widely quoted in books, business media and the academic realm. But Edelman continues to produce other benchmark studies, from its Health Barometer to goodpurpose research to the Capital Staffers Index. In the consumer realm, the firm has been focusing on what it calls the “action consumer,” advocates and activists who serve as brand ambassadors, with a new study of 8095ers (those born between 1980 and 1995) and their willingness to take action on behalf of the brands they love (or hate). Meanwhile, the firm has been emphasizing its “public engagement” methodology, which is now central to its professional development programming, with employees awarded “belts” as they progress in their understanding and implementation ability
PROGRAMS
Not surprisingly, Edelman continues to produce a wide range of creative content in the digital realm, developing online communities and Facebook applications and pages for Levi’s, creating an augmented reality app for Ben & Jerry’s; producing close to 400 pieces of content each week for HP, providing in-depth analytics to clients like Qualcomm. Other high-profile assignments ranged from the global launch of Kinect for Xbox 360, which sought to reach beyond the gaming community and helped the company sell a million in 10 days; partnered client Adobe with Gowalla for the launch of its new Creative Suite, driving a 40 percent sales increase; communicated the new leadership at eBay with a compelling narrative for corporate and consumer audiences; assisted Starbucks with its “retrain and refresh” employee initiative; and worked with GenYOUth on an anti-obesity school program. With five SABRE trophies (including a share of the best in show winner Pepsi Refresh), the firm was one of the most awarded agencies of 2011.
BRAND
Edelman continues to leverage its position as the only independent among the top tier of global public relations agencies to build a strongly differentiated culture and a distinctive offer to clients. It’s probably the best brand in the PR business these days. That’s helped by an impressive volume of research and other intellectual capital; the firm is leveraging its annual trust research to great advantage. The firm has also been stepping up its citizenship work, with Cone treating Edelman as a “client” of its own practice. More than 40 offices engaged in pro-bono work in 2010, and the firm contributed $2.3 million in cash and time to various causes, while also committing to a reduction in its carbon footprint.
THE FUTURE
The only concern for Edelman might be that having scrapped its way to the number one spot in the global rankings, the firm—which has always had the entrepreneurial fire of a “challenger brand”—could be uncomfortable with the mantle of industry leadership. That doesn’t seem likely, however. Richard Edelman clearly believes there’s plenty of room for growth in the PR industry, both in terms of dollars and in terms of stature.