Large Agency of the Year: Edelman
In the summer of 2004, Edelman set an ambitious financial target: to exceed $300 million in global revenues within three years. It focused on five growth drivers: the engagement of its own people; the development of unique intellectual capital; the creation of a distinctive brand; improved client relationship management; and an effort to move upstream to the C-suite and take market share from other disciplines, including advertising. In the past 18 months, it has made clear progress on every dimension, and revenues in 2005 were up 13 percent—almost certainly the leader among top 10 firms—to around $270 million. Major new business wins included Shell, which named Edelman its global agency of record; GE, for U.S. and international communications; Avaya; Burger King; De Beers; Guidant; McKesson, and Samsung. Meanwhile, key clients—AstraZeneca, Johnson & Johnson, Microsoft, Pfizer, Starbucks, Unilever and others—increased their combined spend by 16 percent over the financial year, with additional growth coming from Wrigley, Mars, Novartis, and Starbucks.
In an industry sometimes bereft of intellectual leadership, Edelman has done an outstanding job, conducting more relevant research than any of its competitors and speaking out on controversial issues at a time when many peers are too timid to take a stand. Richard Edelman’s blog (he’s still the only top 10 PR agency CEO actively engaging in that format) provides an ideal forum for his musings on industry trends, and he’s rarely bland. Meanwhile, the firm continues to produce its Trust Barometer series, examining the media and institutions that citizens in markets around the world find credible. The firm has also been developing its own process (once a dirty word at free-wheeling Edelman), the Pioneer Thinking Road Map, designed to combine left and right brain thinking and ensure a disciplined approach to every account.
No public relations firm in North America was involved in more high-profile high-stakes issues in 2005 as Edelman. On the consumer front, the firm has provided international public relations support for Dove’s Real Women campaign, combining traditional media coverage and word-of-mouth to help the company challenge narrow and rigid definitions of beauty and corner a unique position in the marketplace. Edelman was also the PR firm behind the U.S. launch of Microsoft’s xbox 360, and worked with Starbuck to build employee and customer excitement. On the corporate side, meanwhile, the firm worked with the “group of eight” dissident shareholders who led the successful campaign to unseat Morgan Stanley CEO Philip Purcell; worked with General Electric to launch its high-profile “ecomagination” initiative; and assisted Wal-Mart as it reached out to stakeholders and sought to repair its damaged reputation.
Edelman has become, to the surprise of some, the strongest brand in the U.S. public relations business. Plagued for so long by high turnover of both staff and clients, it has moved decisively in recent years to address both issues, and in the process has leapfrogged over many of its competitors in the minds of employees (it ranks number one when people are asked where they would most like to work) and industry leaders, both of whom respect the firm’s ability to maintain an industry leadership position while remaining independent of the giant holding companies. That point of differentiation is similarly compelling to clients, at least some of whom believe that independence translates into integrity.
Midsize Agency of the Year: MWW Group
MWW has always punched significantly above its weight in new business pitches, but even by its own standards 2005 was a banner year: the firm beat out Ogilvy for a share of the Deloitte account; most of the industry’s heavyweights for a share of the Sun Microsystems account; and added marquee names such as Bank of America, Roche, and Sara Lee to its client list. The firm claims an 80 percent close rate on new business pitches, and a similar rate for client retention. Existing clients such as McDonald’s, Nikon, and the New Jersey Department of Health & Social Services increased their spending with the firm. Overall revenues were up close to 20 percent and MWW ended the year with revenues of around $40 million.
MWW is the dominant force in New Jersey, with its headquarters in East Rutherford and a public affairs office in Trenton. But most of its other operations have been growing at a healthy rate. Both Los Angeles and Seattle have reinvented themselves in recent years following the departure of their founders, but both are on track, with L.A. in particular establishing itself as a leader in the southern California public affairs business. The Washington office has new leadership and seems to combine public affairs and lobbying successfully.
In its early years, MWW’s rapid growth seemed to come at a high cost in personnel turnover, but as the firm has matured it has learned to attract, nurture and retain people who fit well with its fast-paced performance-driven culture. Its 88 percent staff retention level is among the best in the business and there was no turnover at the senior level in 2005. In addition, the firm was named one of the top five places to work in New Jersey by NJBiz magazine. Professional development has improved considerably in recent years with the creation of MWW University.
Small Agency of the Year: Warschawski
After another year of phenomenal performance in 2005 (fees up by better than 30 percent) means that Baltimore-based Warschawski has almost doubled in size over the past couple of years, continuing a pattern of rapid growth that has seen the firm establish itself as one of the best in the mid-Atlantic region since its launch nine years ago. Founder and chief executive David Warschawski is understandably proud of that record, but he is even more proud of the fact that it has been achieved without compromising on the firm’s values: the firm has never taken on a new client simply for the sake of growth, and it frequently turns away new business opportunities that don’t seem like the right fit.
Employees at Warschawski gave management at the firm a perfect 10 on all questions related to ethics in our Best Agencies to Work For study. “The more time I spend in the business world—not just in a PR agency—I find that one of the things that I am most proud of at our agency is that we do what we say we’re going to do,” says one respondent. “We never over-promise and we always over-deliver.” Another fan of the management style raves: “My agency goes above and beyond to thrill the client and additionally, thrill me at the same time. I truly am excited for every single day of work—and every day is so different and rewarding.”
It’s no surprise then that even as a boutique Warschawski has attracted its share of blue-chip clients and category leaders. DeWalt, for example, is the largest U.S. tool manufacturer and was ranked last year as one of the top-ten hottest brands by Fortune magazine. Under Armour, meanwhile, is the dominant player in the U.S. performance apparel market. Highlights of the year included helping Under Armour prepared for its IPO, one of the most successful U.S. public offerings of the past five years, and working with DeWalt on the launch of its 36 Volt battery powered power tools at the International Builder Show in Florida via a multimedia production at Universal Studios.
Boutique Agency of the Year: MGA Communications
When the chorus of “not in my backyard” is at its loudest, when critics are at their most strident, when local residents don’t believe corporate promises and local officials are poised to deny planning permission—that’s when companies realize they should have contacted MGA six months earlier. The good news is, it’s not too late. No one is better when it comes to engaging local communities around environmentally sensitive—even toxic—issues and earning the kind of trust that is an essential element of any controversial industrial development.
The firm honed its craft and earned its reputation over the course of a 20-year project for Shell and the U.S. Army as they partnered on one of the biggest superfund clean-up projects in the country, the Rocky Mountain Arsenal just outside of Denver. When the firm was first called in, residents were outraged by the pollution on their doorsteps, and deeply suspicious of the proposed remediation. What followed was a textbook community relations exercise, one grounded in genuine dialog between the responsible parties and the neighboring communities. Today, community support for the various parties to the clean-up is extraordinarily high and the arsenal has been designated a national wildlife refuge.
That kind of work has turned MGA into one of the nation’s leading experts when it comes to dealing with high profile, complex community issues. But while the firm serves several clients in the natural resource and chemical industries, its marketing, publicity and opinion research practices have continued to expand, in part because the model that underpins its community relations work—educate, engage, empower—works just as well in other realms, in part because the firm has a strong commitment to planning and evaluating programs based on business metrics.
New Agency of the Year: Green Target Global Group
Green Target Global Group was launched at the end of 2004 by a trio of former Weber Shandwick executives, led by former executive vice president and global financial services practice leader Dan Reid, funded through a private placement with 26 accredited investors. Within weeks of the launch, the firm competed for and won a trio of clients including DLA Piper Rudnick, the world’s second largest law firm; Dykema Gossett, a national law firm; and Procare, a medical management company. It was an explosive beginning, and Green Target has barely paused to draw breath since.
Reid and partners John Corey and Aaron Schoenherr now have 21 clients, including some big names for a small firm: Abbott Laboratories, Anderson, AppleTree Investments, Foley & Lardner, Employco, Exchange Capital Management, Illinois Pain Institute, the John Marshall School of Law, SPSS and others. Revenues for 2005 topped $1.2 million and the firm has opened additional offices in New York, San Francisco and London, as clients buy in to a philosophy that offers big agency expertise in a boutique environment.
International Agency of the Year: Fleishman-Hillard
Under the leadership of new European co-CEOs Kevin Bell and John Saunders, Fleishman is now picking up the kind of business it should be picking up: it beat out 10 top-tier competitors to win an assignment from the Egyptian government, promoting foreign investment; it picked up GM’s pan-European PR business; it was picked by the German government for a multi-country campaign to promote the 100th anniversary of Albert Einstein’s theory of relativity. The London office is the firm’s flagship in Europe, as it needs to be if FH is to drive business across the network. There’s strength in Brussels, too, where the former GPC public affairs operation, with 30 people, was among the top five in the market. And the firm’s newly-unified offering in Germany (three offices had each operated under their own brands), has given it a stronger position in Europe’s other most important market.
The Asia-Pacific operation, meanwhile, has been growing very nicely, with a network of 11 offices and North Asia (mainland China, Korea, and Japan) growing at a 30 percent clip over the past couple of years. The firm’s progress was recognized with PR Week’s Asia-Pacific Network of the Year honor for 2004. And the Latin American region, under Rissig Licha, enjoyed a year of record growth, with offices in Mexico City and Puerto Rico supported by an affiliate network.
Overall, Fleishman is close to achieving the kind of quality globally with which it has always been associated in the United States.