Hill & Knowlton
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Holmes Report
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Hill & Knowlton

The firm’s decline in the United States, which began in the 90s, has been halted but not completely reversed.

Holmes Report


In a difficult year, Hill & Knowlton held its own in the North American market, which means that it continues to lag most of its serious global rivals in the most critical market of all. There was new business in the U.S. from AIG, HP (environmental business, replacing some of the corporate business lost early in 09), CIGNA, the American Natural Gas Association, Johnson & Johnson (corporate work, plus the Ethicon business), Abbot Nutrition, the Gates Foundation (for its malaria work), Medtronic, DART Containers, Technicolor, Tourism New Zealand, ICANN, San Disk, and American Airlines. And the new year has started well with assignments from Pfizer, Novartis, Medtronic, Yahoo and the U.S. Marines. The firm now serves about 30 clients (25 percent of total revenue) in 10 markets or more, and close to 100 (42 percent of revenue) in at least five markets. Major global clients include HSBC, Procter & Gamble and Haier. The latter illustrates a significant trend of recent years, as more clients from emerging markets—Tsigntao, SABIC, the Qatar Financial Services Authority—have become global accounts.
With a network of 15 offices in the United States, Hill & Knowlton has a reach to match its largest rivals, even if it doesn’t have quite the critical mass of some of the market leaders, with once mighty offices in New York, Chicago and Washington, D.C., having faded in the 90s. There have been some signs of recovery in recent years, with New York in particular beefing up its healthcare operation and notching some impressive wins in consumer and corporate. The west coast operations (Irvine, Los Angeles, San Francisco, Seattle, Spokane) made a solid contribution, the firm has comprehensive coverage in Texas (Austin, Dallas, Houston), and there are additional U.S. offices in Boston, Miami, Tampa, and Tallahassee. The Canadian operation is formidable, second only to local giant National in size and scope, with owned offices in Calgary, Edmonton, Montreal, Ottawa, Quebec City, Toronto, Vancouver and Victoria. And in Latin America, H&K has an established seven-city network supplemented by strong affiliates and capable of delivering impressive pan-regional programming.
With 79 owned offices around the world, Hill & Knowlton has one of the most extensive global operations of any major public relations agency, as befits one of the first firms to establish a network of overseas offices. Its experience in the international arena is evident from the volume of business it serves in multiple markets: 30 clients, accounting for 25 percent of revenue, are served in 10 countries or more; close to 100, representing 42 percent of revenue, are served in at least five. With 1,000 people in 35 wholly-owned offices around the region, and more than 20 associates, Hill & Knowlton is strongest in the EMEA region. The U.K. office—now under the leadership of Richard Millar following Sally Costerton’s promotion to the regional leadership role—remains the largest in the region and one of the largest in the market, with more than 250 people across all practice areas. The Brussels office is another powerhouse, ranking among the leaders in the critical EU public affairs arena; the Nordic offices have been growing ; and there are 120 people across eight offices in the Middle East, where the firm has an unrivalled 24-year track record. While regional revenues were down an estimated 5 percent in 2009 as a result of the global economic crisis, by most other metrics Hill & Knowlton enjoyed a pretty successful year in Asia, enough to earn the firm our Asian Consultancy of the Year honors. Headcount increased to 500 (largely as a result of the integration of the well-regarded Indian PR firm IPAN), and the firm continued to generate an impressive proportion of its revenues from multi-market clients
Corporate communications is Hill & Knowlton’s greatest strength, with particularly impressive capabilities in crisis and issues management and change communications supplemented by public affairs capabilities in Washington, D.C., and some key regional markets. The technology practice works for an impressive list of industry giants, providing both traditional public relations support and analyst relations. The healthcare practice has been resurgent in recent years, and the firm’s consumer work is capable of surprising those who think big agencies always play it safe. The firm has also seen strong growth in some niche markets: globally, it is among the industry leaders in the energy sector; it has strong credentials in clean tech; and it has a surprisingly significant presence in the entertainment marketing arena.
The departure of AnnaMaria DeSalva, who had led the turnaround of the firm’s healthcare capabilities, was a blow, but it was softened by the appointment of Dan McIntyre, former head of communications at Wyeth, to lead the global practice. Other new additions included Susan Thiele, formerly of Edelman, as director of the New York healthcare group; Dolly Judge, formerly of Pfizer, as senior VP in the Washington, D.C., office; Robinson Lerer & Montgomery veteran Mary Jane Walker as senior VP and media relations director in New York; and Ben Trounson, formerly of Ketchum, as senior VP and head of the connected marketing practice in New York.
One focus of the firm’s professional development activity has been ensuring that digital and social media expertise is embedded throughout the agency. Another has been ensuring that employees around the world are all equipped to handle transnational accounts—something that may come more naturally at H&K than at other firms, given its history, but something the agency is not inclined to take for granted. Finally, H&K high-potential employees continue to participate the firm’s senior management training program, First Chair.
Hill & Knowlton has not made the same commitment to thought leadership as some of its major rivals, although it has produced some interesting research on the global level: a Tech Decision-Makers Survey, now in its fourth year; the ongoing Corporate Reputation Watch studies; and research into the marketing and communications challenges facing sovereign wealth funds as the economic recovery kicks in. Overall, though, its contribution has been disappointing for a firm with such a rich heritage and strong market position.
When Florida’s legislature disagreed on funds to support a Medicaid program leaving hospitals and communities to absorb a staggering $200 million shortfall, H&K created a media outreach campaign focused on the community impact, leading to an 11th hour approval of the budget. When the Smithsonian Institution sought to attract visitors to the new National Museum of the American Indian, H&K created a global media campaign that helped attract 1 million people in the first five months. In Canada, meanwhile, Novartis turned to H&K to provide support for ongoing public, stakeholder and government relations activities with that secured government reimbursement for its macular degeneration treatment Lucentis.
Hill & Knowlton has maintained a high-profile presence at major international events such as the Copenhagen Summit on climate change, Techonomy, and in Cannes, where it has been perhaps the most visible and active of the giant multinational public relations firms. But chief executive Paul Taaffe has a lower profile than many of his peers, despite the fact that he is a thoughtful and charismatic speaker, and the firm has largely eschewed the opportunity to showcase its work in PR industry awards competitions. If Hill & Knowlton has a good story to tell, it isn’t telling it—at least not in North America.
Hill & Knowlton continues to manage global business as well as—if not better than—most of its multinational peers, and its operations in EMEA and Asia-Pacific (and in Canada and Latin America for that matter) are strong enough to make it a perennial candidate for global agency of the year recognition. But the firm’s decline in the United States, which began in the 90s, has been halted but not completely reversed, and in its headquarters market Hill & Knowlton simply is not a firm that competitors fear the way they once did. That has to change if H&K is to be restored to preeminence in the global public relations industry.
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