Paul Holmes 08 Apr 2001 // 11:00PM GMT
NEW YORK, April 6—Following in the footsteps of several larger agencies, Ruder Finn—the second largest independent public relations firm in the nation—is launching a second brand. The new firm, RF Binder Partners, will be headed by Finn family member Amy Binder, will start life with fees of around $15 million, and will focus on clients confronted with major market or cultural change.
In a major restructuring, agency founder David Finn will become chairman and CEO of a new holding company, Ruder Finn Group. The two remaining Finn siblings, Kathy Bloomgarden and Peter Finn, will become co-CEOs of Ruder Finn, which will continue to focus on multiple practices, including healthcare, technology, corporate strategic communications (including mergers and acquisitions), and branding, and has projected 2001 fees of around $85 million.
According to David Finn, the moves come at a time of strength for the agency, which reported record 42 percent growth in 2000 and saw revenues rise 20 percent in the first quarter of 2001. “I think this will help position the company for further growth in the future,” he says.
RF Binder will focus heavily on what Binder believes to be a major growth area: helping clients, whether they are start-ups of Fortune 500 companies, deal with changes in their markets. According to Binder, “Our prototypical clients will be a company that believes its assets are not being utilized fully or not being recognized, and sees a window of opportunity of about 12 to 18 months and wants to move quickly to communicate with the capital markets, with potential customers, with employees. We would be wrong for clients who feel their communications strategies are already clearly articulated, whose business model is fixed, who don’t see change.”
Binder says the agency will build on the heritage of Ruder Finn, but will have its own distinct personality.
“We very deliberately set the new firm up with a strong revenue base and a strong team of professionals,” says Peter Finn. “It’s not a second tier agency. It’s not Ruder Finn lite. It’s a high quality agency with its own personality and its own identity.”
Among those joining Binder at the new firm are executive managing directors Robert Ferris, previously head of the Ruder Finn IR practice and Frank Walton, who led its interactive group; chief marketing officer George Drucker; CFO Marta Kowilaw; Nancy Ross in the Boston office; and Joyce Fitzpatrick in the Raleigh office.
While the agency has experts in several areas, including technology and brand building, they won’t be assigned to practice groups. “We want to build teams of people from research, from interactive, from technology, from marketing, but we don’t want to put people in silos,” says Binder. “We’re not going to have all the interactive people sitting together and all the technology people sitting together. We want to create the sense that this is one team.”
Among the new firm’s 80 clients are Bank of America, Carter Wallace, Computer Express, Hunter Douglas, Lexis Nexis, McGraw Hill, the Netherlands, New York State Department of Economic Development; and Standard Register.
“Most of the global agencies have multiple brands, or they have sister companies,” Bloomgarden says. “Burson-Marsteller has Cohn & Wolfe. Edelman has PR 21. We felt it was time for us to create a second brand. It will enable us to focus on the things we do well, and will put us in a position from which we can continue to grow.”
The new firm will also allow the company to manage conflicts, says Bloomgarden, who claims Ruder Finn turned away several pieces of business last year—including several in the technology arena—because it already served clients in the same space.
Ruder Finn has a staff of 600 in 13 cities across the U.S., Europe, and Asia, and handles clients such as Eli Lilly, Johnson & Johnson, Novartis, Computer Associates, Hitachi Data Systems, Verizon, Subaru, Target Stores, and Paine Webber. Senior executives include president of Ruder Finn Americas Richard Funess, CFO Tony Esposito, chief creative officer Michael Schubert, European managing director Lee Tomkins and Asian managing director Louise Harris.
With revenues of less than $100 million, Ruder Finn is barely a third the size of some of its larger competitors, such as Burson-Marsteller, Fleishman-Hillard, and Weber Shandwick, but with more than 50 percent of its revenues coming from outside New York—and with overseas offices in several key markets—it clearly offers greater reach than most midsize firms. Some observers believe the firm is stuck in a kind of “mushy middle,” not large enough to compete with the mega-agencies, not focused enough to stand out as a specialist.
Bloomgarden, not surprisingly, see things differently: “We have decided to focus on several core specialist areas,” she says. “In those areas, we can compete with anyone. There’s not one major healthcare pitch we don’t get called for. We’ve worked on blockbuster drugs like Celebrex and Viagra. In the M&A arena, we’ve worked on Novartis, Pfizer, BP Amoco. We keep hearing that we can’t compete, but we’ve been growing faster than almost any of the larger agencies for the past two or three years—and it’s all been organic growth.”
That’s why the agency remains committed to independence.
“We are not interested in selling at any price,” says the elder Finn. “I see what is happening at those agencies that sold or merged and I feel that more and more our independence is an asset in the marketplace for people and clients. We have a certain character, and a certain commitment to our people. It’s something that goes back to when Bill Ruder and I founded this firm 52 years ago. We take values very seriously. We want to make money, but we also want to have a company we feel proud of.”