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Holmes Report
Holmes Report
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Edelman has enjoyed an exceptional run in Europe over the past five years, with an expanded footprint in growth markets like and moves to address the obvious weakness in public affairs.

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Edelman is one of the few giant multinational firms to experience continued growth in the EMEA region during the downturn. Revenues were up by about 7 percent in 2009, and are on track for another mid-single digit increase in 2010, coming in at close to $74 million. That number includes some small acquisitions (Russian firm Imageland, Brussels public affairs consultancy The Center and Dutch healthcare boutique Hinfelaar) but there was underlying organic growth too. In the U.K., meanwhile, there was new business from Diageo, HP, Kraft and RIM, while the German operation picked up significant assignments from Anheuser Busch, Danone, Merial and SimeDarby. The firm has also seen major client relationship expand to additional markets: HP is now served by 12 Edelman offices in EMEA, Microsoft and Pfizer by 11 apiece, AstraZeneca, Johnson & Johnson and Starbucks in eight.
One of David Brain’s objectives during his seven year tenure as head of Edelman’s EMEA region was to achieve a better balance between the U.K. business and the firm’s continental European offices. To a certain extent he has been thwarted by the continued growth of the U.K. operations (including the acquisition and integration of Jackie Cooper PR), which still accounts for better than 40 percent of revenues in the region. The German offices (Hamburg, Berlin, Frankfurt, Munich) form the real powerhouse among the continental operations, with close to 100 people and almost ?10 million in fees, up by 18 percent last year and working with blue-chip clients like Grunenthal, HP, Microsoft, Novartis and Unilever. The firm has about ?5 million of fees in France, Italy, Spain and Brussels (emerging as a strong challenger following The Center acquisition); about half that number in Ireland, the Netherlands, Russia and the United Arab Emirates (quite a success in its first year of operation); and smaller operations in Sweden (where the firm had another difficult year) and Poland.
While the major holding companies were reporting declines in public relations revenues of between 6.5 and 11 percent, Edelman saw its North American fee income virtually unchanged—down 0.3 percent, to be precise—so the firm was able to claim once again that it significantly outperformed its peer group in 2009. The firm has close to 1,750 people in the U.S., with more than 500 in each of its two powerhouse offices—New York and Chicago—and more than 200 in Washington, D.C. The firm is also among the market leaders in Silicon Valley, Atlanta, and Seattle. 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 Tokyo and in Australia, there was new business from some major global clients, including Microsoft, Starbucks and Wal-Mart, and David Brain’s imminent arrival as regional CEO signals a commitment to further expansion.
One of the most impressive accomplishments of the past few years has been the balancing of Edelman’s EMEA portfolio. Long known for its leadership in consumer (still the largest practice, accounting for close to 30 percent of regional revenues) and healthcare (now just under 20 percent), Edelman has developed an impressive corporate communications practice (now the firm’s second largest, almost a quarter of regional revenues) and substantial technology business (15 percent). The public affairs practice remains somewhat undersized (just under 10 percent of revenues) but following the acquisition in Brussels the firm believes it is well positioned to push on. The digital practice accounts for 5 percent of revenues, but that number is misleading—it’s largely content creation, website and widget design and other creative projects; the bulk of the firm’s digital and social media work is embedded in the other practices.
The announcement toward the end of 2010 that David Brain will be moving to Asia to take the helm of Edelman’s operations there means that the firm ends the year with some uncertainty about its future leadership, but whoever takes the helm will inherit an impressive, stable team of senior executives including office mnagers (Robert Philips in the U.K., Cornelia Kunze in Germany, Fiorella Passoni in Italy) and practice leaders (Mike Seymour in crisis, Carolyn Paul in health, Jonathan Hargreaves in tech, Mark Cahalane in corporate). There were plenty of new additions during the year, too, as Edelman flexed its muscles while many of its competitors were hunkering down. The Center acquisition brought in Martin Porter to work alongside Laurent Chokouale in Brussels, while former BBC director of global news Richard Sambrook is a marquee addition as head of the content practice and the FT’s Stefan Stern is an equally impressive addition as director of strategy.
An internal survey earlier this year found that Edelman’s employees see the firm as innovative, creative, ambitious, and committed—capturing the entrepreneurial qualities that continues to help the world’s largest independent public relations agency stand out from its publicly traded, holding company owned competitors. On the positive side of the equation, employees felt that Edelman was “staying ahead of the curve” and “on top of trends”; on the negative side, there were complaints about “overworked employees” and “low raises.”
Few firms have invested in thought leadership to the extent that Edelman has, and the firm’s Trust Barometer—which focused on opinion leader confidence in media, NGO, business and political institutions—is probably the most quoted piece of research in the PR field. The firm now has more than a decade of data to draw on, and is conducting surveys in 12 EMEA offices. But there are other studies that provide equally compelling storylines: the firm’s goodpurpose research looks at the impact of cause-related marketing, while a new engage study reinforces the firm’s new focus around “public engagement” and the Health Engagement survey has gained considerable traction in the healthcare arena. Finally, the firm’s Social Media Index and Tweetlevel products are designed to provide a way to analyze the influence of opinion leaders online.
Some of Edelman’s most significant work in 2010 has showcased its burgeoning capacity for content creation, particularly in the digital realm. It ranges from an Alzheimer’s awareness campaign for Pfizer’s Aricept; a film created for Norton Symantec to educate families about web access and security; and the production of online videos for the OMO and Tang brands that later became above-the-line creative. The firm also picked up SABRE Awards for some of its broader campaigns, including the Shell Eco Marathon, which has expanded from seven to 12 markets; a healthy hand-washing campaign on behalf of Dettol; and the introduction of the Lips game for Microsoft Xbox in Germany.
Edelman is clearly differentiated by its status as the only independent among the top 10; it has a clear point of view, articulated fearlessly by Richard Edelman and David Brain and others; and it promotes itself via a wide range of research, all designed to underscore its key strengths. The long-running and oft-quoted Trust Barometer is the most prominent marketing platform, creating the foundation for media interviews, conferences and seminars, but the firm also has a high-profile in the digital and social media realm, with prominent bloggers at all levels of the organization and in multiple markets. All of that leads to impressive share of voice.
Edelman has enjoyed an exceptional run in Europe over the past five years, and with an expanded footprint in growth markets like Russia and the Middle East and moves to address the obvious weakness in public affairs, there’s no reason to believe the trend won’t continue. But the departure of David Brain—architect of the firm’s recent success—and uncertainty over his successor means that competitors are asking questions.
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