Charting the future of public relations
Edelman Grows 11.6% In 2013 Fiscal Year
Aarti Shah
Holmes Report
COO & Senior Editor

Edelman Grows 11.6% In 2013 Fiscal Year

Edelman took in revenues of $707 million for its 2012 fiscal year with organic growth up 11.6% from $636.8 million in 2012.

Aarti Shah

NEW YORK — Edelman took in revenues of $707 million in its 2013 fiscal year, with organic growth up 11.6% from $636.8 million in 2012.

The world’s largest PR agency saw its overall organic growth outpace the global industry average of 8% during its fiscal period between July 1, 2012 to June 30, 2013.

Emerging regions Latin America excelled with about 24% organic growth to $19.6 million, followed by Asia-Pacific with 20.6% organic growth to $85.6 million. Next year, APAC will include the Middle East and Africa, adding about $10 million to the region’s revenues.

The US trailed all other regions with 9.7% organic growth to about $430 million, but still accounts for 60% of overall revenue. EMEA, which accounts for 20% of revenue, reported 10.5% organic growth to $140.5 million and Canada saw 13.7% organic growth reaching $31.4 million.

“In the US, we were one of the first [PR firms] to go over $400 million in revenue -- so that’s a huge base to grow on,” CEO Richard Edelman said. Among the region’s standouts were its digital practice growing by 30%, bolstered by wins like digital AOR for Samsung Mobile, and the firm’s corporate reputation work with Hewlett-Packard.  

Edelman described the firm as having “broken through” in London with 400 people and four of its 12 largest clients based in the market, including Shell and Unilever.

Consumer remains Edelman’s largest practice, followed by tech, which has grown to 18% of its business. Consumer tech clients like Microsoft’s Xbox and eBay had long been Edelman’s sweet spot. Tech now includes Silicon Valley's document-sharing darling Box in several regions outside of the US and SAP,  in addition its work with Adobe has “grown substantially.” The firm’s Symantec business has expanded beyond the consumer-facing Norton division to include its enterprise offerings, Edelman added.

Edelman’s global tech head Pete Pedersen departed the company in March to join Grayling as global CEO. In May, Joe Paluska — former tech lead at Hill + Knowlton and comms head at electric car company Better Place — took over the role.

“He’s getting his feet wet,” Edelman said. “He’s smart and knows his business and has a good aggression.”

Technology replaced healthcare as the firm’s second-largest practice. Healthcare is now ranked with corporate in third.

“We’re getting a lot of corporate work out of our healthcare clients and are very active in brand marketing for pharma,” Edelman noted. The firm expanded its Pfizer work to include corporate and its pharma clients include Novartis and Johnson & Johnson. Edelman said Chevron had “big growth” within its corporate business in the last year. 

Its food business has been softer, Edelman noted. But the firm is trying to gain leadership in this market and recently published a study for this sector.

Increasingly, Edelman is fielding heartier digital assignments. Earlier this year, the agency expanded into paid media hiring Cassell Kroll from MindShare and tasking Steve Rubel as chief content strategist to help broker sponsored content deals. 

“Paid is absolutely something that we look at as an accelerator of earned -- it’s not the beginning, it’s the end,” Edelman said. “We’re still partnering with ad agencies.”

Although Edelman owns $2 million advertising shop Blue, there are not plans to grow it beyond its niche primarily servicing Washington DC organizations, Edelman adds. 

“Ultimately, our core businesses will be PR, digital and research because they are mutually supportive of each other,” Edelman said, adding this week’s Omnicom-Publicis merger reiterated his firm’s ambitions to go “narrow and deep and do what we do well rather than replicate a $22 billion holding company and stretch ourselves too thin.”

Edelman says his firm previously struggled to make inroads into digital’s backend, for instance with website builds, and has since focused its digital efforts on the social side. What remains in question, however, is how deep Edelman will go into digital’s evolving paid game.

“We don’t know what the opportunity is there yet,” he said, adding it is still unclear whether PR firms - including his - will be entrusted with hefty media budgets to use towards things like sponsored content.

The firm is also exploring emerging practice areas through its $17 million brand engagement firm Matter, including experiential work, such as pop-up stores for eBay and the Cybergeddon digital crime thriller with Norton. Additionally, sports marketing -— about 1% of overall business -- has been anchored by the firm’s work with Quest Diagnostics in its takeover of the New York Giants' training facility.

In addition to Blue and Matter, the $17 million market research shop  Edelman Berland  and the $4 million Krispr Communications - formed in early 2012 to do outreach to the nutrition community for the Kellogg Company -- all roll into Edelman PR.

Edelman’s sister agency the Zeno Group grew by nearly 62% in 2012, totaling $26.9 million in revenue. Including Zeno, total revenues for the privately-held Daniel J. Edelman group was $733.9 million up nearly 13%. 

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