Ketchum: Agency Business Report 2008

The 84-year-old firm exceeded all financial projections, and had its best year ever, by any metric.

Outlook
The 84-year-old firm exceeded all financial projections, and had its best year ever, by any metric. CEO Ray Kotcher links this success to a corporate culture that promotes client service and leadership development.

"Ketchum's [success] is cultural. Our culture demands this of the leadership of the agency," says Kotcher, who notes internal assessments like the Ketchum Leadership Institute, where the top 250 staff members are trained on management and client service.

The firm also scored well in staff satisfaction and loyalty, according to a biannual Omnicom/DAS employee satisfaction survey, which showed heightened staff retention.

Ketchum's banner year resulted from "the underlying strategy of the service-profit chain that says, 'If you have committed, loyal employees who [are] trained to leverage that satisfaction and loyalty, that in turn will drive greater client loyalty, which will then, in turn, drive business success,'" says Kotcher.

Ketchum's emphasis on refining internal initiatives also reflects its approach to client work.

"In 2002, we put in place the Ketchum Planning Process, which is going through another iteration and refreshing right now," says Kotcher. "When we approach a problem, we're all talking the same language around the world, all have the same digital tools, and have a consistent approach to how we problem-solve, all the way through to strategy."

This approach is particularly useful in the acquisition and expansion of client work developing on a global scale.

"More clients [that] we're winning understand the need to communicate on an international basis," says Kotcher. "We live in one world

Staff

Ketchum declined to disclose its headcount. Senior hires were James Andrews, VP and director, interactive, Atlanta; Patrick Barrow, MD, corporate affairs, London; Rod Cartwright, MD, public affairs, London; Calmetta Coleman, SVP and director of editorial services; and Jeff Danzer, MD, public affairs, London. Several partners also joined the worldwide management partnership: Dave Chapman, director, Ketchum West; Noam Gelfond, DC; Al Jackson, director for public affairs; Charles Liu, GM, Hong Kong.

Ketchum also appointed leaders to global practices and specialty groups, including Tamara Norman, director of the New York corporate practice; Paul Rand, president and CEO, Z—calo Group; David Rockland, MD, research and interactive communications; Deanne Yamamoto, associate director, Ketchum North America global brand marketing practice. Management within the London office changed with the appointment of Avril Lee and Nick Propper as deputy CEOs.

Structural changes

In 2007, the Ketchum network added MMG, an Omnicom firm focused on clinical-trial patient recruitment, which will serve as a distinct business. Ketchum and Omnicom also opened the Chicago-based Z—calo Group, which focuses on word-of-mouth marketing.

Regional performance

The firm reported that nearly all of its US and global offices grew in 2007. The New York office had a record year with growth in healthcare, brand and food, technology, and corporate practice, along with such high-profile assignments as the Lenovo torch relay.

Meanwhile, its newly established healthcare practice and expanding corporate practice helped Ketchum Midwest become one of the highest-performing regions in 2007, with account wins such as the Chicago office's national, multi-year brand-building program for Cancer Treatment Centers of America. Ketchum EMEA posted double-digit growth. Also, Stromberg Consulting, the agency's change-management and workplace communications unit, opened in London, its first international bureau, while Ketchum's Asia-Pacific agency reported double-digit growth.

Practice areas

Core practices are brand marketing, corporate, food and nutrition, healthcare, and tech. Specialty areas include communications training, concentric communications (experiential marketing, events, and meetings), global media network, and influencer relationship management.

Ketchum Interactive Communications was added to further integrate digital programs, while global communications and media strategy was renamed the Global Media Network. The global practice saw marked growth, as one-third of new account wins had a global scope.

Accounts

Along with retaining its top 40 accounts, Ketchum won 175 new pieces of business, including expanded assignments with BMW, Cancer Treatment Centers of America, Celanese, Delta Air Lines, Kalima Translation Foundation, Procter & Gamble, Roche, and Western Union. More than half of its top 40 accounts saw expansion into other areas of the agency or into new geographic areas.

Financial performance

Reported revenue in the $200 million to $300 million range.

Key facts
Principals: Ray Kotcher, senior partner and CEO

Ownership: DAS, a division of Omnicom Group

Subsidiary Companies: Concentric Communications, MMG, Stromberg Consulting, The Washington Group, Z—calo Group

Offices:
Wholly owned: Nine in North America, five globally; Partly owned: 52 globally

Revenue:
$200 million to $300 million

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