Global Rankings 2010: North America Market Profile
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Global Rankings 2010: North America Market Profile

Despite being the region where the global financial crisis first took shape, North American consultancies demonstrated why they remain the benchmark where innovation in PR is concerned.

Holmes Report

By Arun Sudhaman

Despite being the region where the global financial crisis first took shape, North American consultancies demonstrated why they remain the benchmark where innovation in PR is concerned.

A prime example of this came from Qorvis, the public affairs-slanted comms firm that operates without billable hours, timesheets or practice area silos. Qorvis grew its revenues by 6.5 per cent to more than $37 million, ample evidence that its novel approach to agency servicing is reaping rich dividends.

Not that the year was without difficulties. Qorvis managing director Seth Thomas Pietras points out that the consumer downturn hit the firm’s growth plans for this area. Instead, Qorvis focused on retaining existing clients and winning international business, achievements that were fuelled by staff turnover that was, unsurprisingly, low.

“Overall 2009, was a strong year for the acquisition of global companies and sovereign clients,” says Pietras.
Pietras adds that almost all sectors were either flat or negative, and points to a “downward pressure on pricing that we had never seen before.”

In conditions such as these, Interpublic Group agency MWW consolidated its position as one of the market’s leading independents by focusing on value and rethinking its service model. By better integrating its different service areas, says MWW president/ CEO Michael Kempner, the agency was able to attract budgets that have traditionally been spent on advertising, in the process growing its fee income to almost $39 million.

Says Kempner: “Market conditions continue to create challenges in servicing clients, however by providing strong value to clients for their marketing dollar, MWW Group was able to preserve and grow budgets, often taking dollars from other marketing disciplines as our work proved to be a much better investment with a higher return for each marketing dollar spent.”

At WCG, a more diversified service offering — including acquisitions in the creative and interactive services spaces — helped fuel stunning growth of almost 32 per cent, taking that agency to fee income of $33 million. Continued growth in the agency’s pharmaceutical and medical device units also helped, along with expansion in its biotech business, and a new office in Austin, Texas.

“We saw our healthcare clients continue to invest in communications with some budget redirected on global business due to the global economic recession and increasing pricing pressure,” says WCG president/COO Diane Weiser. “From the 4th quarter of 2009, we also saw increased investment in social media analytics, insights and engagements, as pharmaceutical companies recognize the importance of social networking in shaping their brand and corporate reputations.”

Not every agency prospered to such an extent. North of the border, Canadian giant National PR saw fee income drop by almost 18 percent, but remains one of North America’s biggest players. According to managing partner John Crean the year was a “challenge” but National’s strengths in the issues-rich energy sector protected against the worst of the downturn.

“I think the market contracted last year,” says Crean. “A few firms closed down. But in 2010, we’ve seen a significant change in attitude. We’ve seen clients become more aggressive for ideas and become more engaged with PR.”

In the US, another market leading independent held firm in 2009, by innovating beyond its traditional PR strengths. Taylor dipped slightly to $19.1 million but resisted the worst of downturn by growing its brand strategy and digital businesses.

“Fees derive directly from brand strategy surpassed 40 per cent for the first time in Taylor history,” says CEO Tony Signore, adding that digital represented “one-third of Taylor’s annual revenue.”

These enhancements were underpinned by Taylor’s unique business model, which allows the agency to only ally with 15 clients. “As a result Taylor retained 100 per cent of its client partners heading into the new fiscal year, which clearly minimised the negative industry impact of the economic downturn.”

Beyond the industry leaders were a couple of smaller firms that excelled in 2009, growing revenues and demonstrating an impressive capacity for transformation. Allison & Partners improved its fee income by 12 per cent to $14.7 million, aided by a single P&L structure and laudable increases across consumer,
technology and healthcare.

“While 2009 was not without challenges, not least an unfavorable economic climate, it was a year that brought growth through both high profile client wins and organic growth,”says chief marketing officer Lauren Selikoff, pointing to new business from L’Oreal USA, GE Healthcare and Samsung’s information technology division.

The resilience of the healthcare market, meanwhile, also helped Cooney/Waters post an eye-catching 18 per cent increase in fee income. “Health and medical PR seems to have remained relatively strong through the recession,” says chairperson Lenore Cooney. “The strength of our 2009 performance lay in the increase in the scope of work for existing clients, the kind of organic growth we have enjoyed as a company over the years.”
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