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The CEO of Edelman reveals his plan to help the PR giant rebound after the economic crisis set back his goal to hit $1 billion in revenue

Richard Edelman
  • Edelman was poised to become the world's first $1 billion PR agency, but the coronavirus pandemic has set back those plans.
  • In a wide-ranging interview Richard Edelman, CEO of the PR firm, promised employees there would be no layoffs related to the pandemic, but since then, the agency lost a chunk of its Samsung account. 
  • Edelman said the firm is rethinking what an office should look like post-pandemic and investing in creative, digital, research, and experiential.
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After a stagnant 2018, Edelman reported growth in every region last year, hitting $892 million in revenue. As an industry bellwether, it was a positive sign for public relations broadly and the agency itself as it seemed poised to become what would be the world's first $1 billion PR agency.
But the coronavirus outbreak has brought the global economy to a standstill, halting the PR industry's hopes for strong growth this year.
"It's a serious wind in our face. And yeah, it may have us go back a bit, but we'll get there," CEO Richard Edelman told Business Insider of the $1 billion milestone.
Following the 2009 recession, independent Edelman outpaced its ad holding company competitors such as WPP-owned Hill + Knowlton Strategies and Omnicom-owned Ketchum, charting double digit revenue growth.
But then growth slowed. Edelman grew just 1.7% in 2016 and 2.1% in 2017, and declined 1.1% in 2018. Last year, Edelman had 2.1% in like-for-like growth, but the impact of foreign currency dragged down its results.

Edelman has a $20 million hole to fill after losing a critical piece of its Samsung business 

Edelman made headlines last month when he declared there would be no layoffs as a result of the coronavirus pandemic.
Since then, the agency lost Samsung's social and digital marketing business for its mobile division, a $20 million account, according to PRovoke. Edelman is still Samsung's key PR agency, the site reported.
An Edelman rep wouldn't say if that dollar figure was annual. Asked if he stood by his no-layoffs promise since the Samsung loss, the CEO said he's evaluating options.
The agency's paid media arm, Edelman Digital, comprises $200 million in revenue for Edelman.

Edelman is mulling how to reopen its offices

Marketers struggle with how to advertise during crises, but times like this are ripe for PR, Edelman said. He said that with people spending less, brands should focus on providing facts and solutions to consumers instead of selling to them.
"It's time for PR to take share from advertising," Edelman said. "We can actually be part of the news cycle with stories of companies and brands stepping up, of companies in some way changing their supply chains."
Like other agencies with lots of real estate, Edelman is evaluating options for reopening its offices after the coronavirus pandemic eases.
It's considering things like what's the right population density per floor, staggering the number of people allowed on the elevator, asking employees to wear masks and gloves, and taking their temperatures before they enter the office.
"I don't want to be the employer who has sick people getting other people sick," Edelman said.
Remote pitching to journalists may become common, but Edelman said there will still be in-person pitch and business development meetings.
"There is a lot of aspect of trust that's built over beer," he said.

Edelman plans to keep pushing into digital, creative, and analytics

Edelman grew after the recession partly by investing in emerging areas like digital, creative, and data analytics, and its CEO said that would continue.
In the past couple years, Edelman has made several big-name hires, including Judy John, who was chief creative officer for North America, as its first global chief creative officer; and John Flannery, executive creative director at DDB, as chief creative officer of its hometown office, Chicago.
"One in three Edelman employees is now either digital, research, experiential, or creative," Edelman said. "That's up from one in 25 five years ago."
It'll continue to try to win business from ad agencies with its earned-media approach to creative. It's won pitches as the lead creative agency for HP, Dove, the WNBCA, and others. One of its most prominent campaigns was Dove's Real Beauty Productions.
"We don't have to get our own brief and we don't have to come back with storyboards and we don't have to do some elegant video treatment," Edelman said. "It actually is idea-execution, out, one day. Because it's the news cycle. If you get it, great. If you don't, you blow it."
SEE ALSO: Internal communications business is booming for PR firms like Edelman, Prosek, and Kekst CNC as CEOs scramble to reassure remote workforces and plan for a return to the office
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* This article was originally published here

https://www.businessinsider.com/coronavirus-slows-edelmans-goal-to-become-1-billion-pr-agency-2020-4

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