PR giant Edelman's CEO lays out how the firm recovered half of its decline after revenue fell as much as 30% in some markets in the pandemic
- PR giant Edelman has taken hit in the pandemic, with revenue in the US, its biggest market, falling 10%.
- But Edelman CEO Richard Edelman said the firm has recovered half of its decline through creative work traditionally done by ad agencies and increased demand by companies seeking reputational and internal communications help.
- The agency has also started hiring again and restoring employees' salaries to their pre-pandemic levels.
- But assignments aren't as lucrative as they once were.
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PR giant Edelman took a hit in the pandemic. The US, which makes up 60% of its revenue, declined 10% year-over-year; some markets fell as much as 25-30% year-over-year in the spring. The firm reduced salaries and laid off 390 people.
But Edelman just started hiring again and restoring employees' salaries to their pre-pandemic levels. It's doubling down on creative and more traditional lines of work like corporate reputation and internal communications, CEO Richard Edelman told Business Insider.
"We have stopped going down," Edelman said. "In fact, we have recovered about half of the decline."
Edelman is leaning on its PR expertise to win creative work from agencies
Last year, Edelman, hired Leo Burnett's Judy John as its first ever chief creative officer last year, staking a claim on an industry that's lucrative but dominated by advertising agencies.
The coronavirus pandemic seemed poised to stamp out those plans, but Edelman still sees big potential to grow that business by emphasizing its experience in corporate social responsibility, philanthropy, and sustainability.
Read more: FleishmanHillard's CEO laid out his plan to boost growth at the PR giant coming out of the pandemic
"We're getting to a place where we're a serious alternative [to advertising agencies]," Edelman said. "When companies want action or change, we're sometimes the lead agency. We're the lead creative, not the support element, which we're happy to do sometimes, but other times we have our own creative."
As examples of the agency's progress, Edelman cited its work this summer helping Unilever's Good Humor replace its ice cream truck tune "Turkey in the Straw," which has a racist history. with a new jingle. Edelman served as the creative and production lead and did the media outreach.
Edelman said it also recently served as lead creative on a Special Olympics campaign called "Your Brand Here," which called on brands to support that organization's athletes.
Earlier, Edelman was the lead creative agency for HP, Dove, the WNBA, and other organizations.
Corporate and diversity and inclusion have helped Edelman survive the economic crisis
Edelman is also seeing growth in corporate work, which includes helping clients like Sempra Energy, Mitsubishi Power, and HSBC, with things like reputation, employee engagement, and business marketing.
That unit makes up half of the firm's revenue, up from one-third a few years ago.
The pandemic has also benefitted from a boom in internal communications assignments during the pandemic as companies sought help communicating with their employees on things like health and safety issues, layoffs, and return to work plans.
Edelman says it's well positioned to grow in this area, since PR agencies are used to reacting to news cycles and rolling out campaigns quickly.
The agency has also picked up assignments in healthcare, food, and technology.
Diversity and inclusion PR work has also boomed following Black Lives Matter protests. U.S. COO Lisa Ross has consulted with hundreds of current and prospective clients seeking advice on race-related issues.
However, Edelman is seeing fewer seven-figure briefs from clients, so it takes more hustle to match the revenue of one big brief.
"Our pipeline is a lot more active than in the March, April, May period, and the price points are not as high, meaning we're getting a lot more assignments in the $500,000 to $1 million opportunities," Edelman said.
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