|March 26, 2012|
|Financial PR, IR Thrived in 2011|
|By Jack O'Dwyer|
|Financial PR and IR practices of firms thrived in 2011 with the five biggest practices reporting gains in double figures and only one of the top 15 having a negative year.|
Edelman replaced ICR in the No. 1 spot as its financial practice grew 22.8% to $30,032,105, which was $81,424 greater than ICR’s $29,950,681, up 19.8%.
In third place was APCO Worldwide, +18% to $13,396,690.
Ruder Finn, growing by 90% to $12,828,018, was in fourth place, followed by CJP Communication, +21% to $8,173,359.
MWW Group was in sixth place, reporting $5,967,000 in financial PR/IR, an 11.2 percent gain over 2010.
The big jump in Ruder Finn’s financial PR category is partly due to its decision to include corporate PR in financial since corporate reputation impacts stock value.
Other standout gains in the top 25 were Intermarket, +23% to $4,837,425; Atomic PR, +36% to $3,000,000; Dukas PR, +63% to $2,784,000; Levick Strategic Communications, +147% to $2,497,798; Gregory FCA Communications, +9.5% to $2,300,000, and Rasky Baerlein, +61% to $1,020,500.
Padilla Speer Beardsley reported financial fees of $1,753,724, down 25%.
Social media may be the rage in much of PR but financial PR/IR heads are cautious about its use because all investors must have equal access to “material” information about a company, meaning anything that might affect the price of a stock. Answering an individual investor’s question can touch off a general news release that must reach “disclosure” media.
Edelman, New York, $30,032,10
Rich Myers and Jeff Zilka, general managers of Edelman’s financial practice in New York and Chicago, respectively, said the practice is about evenly divided between work for financial services such as mutual funds, hedge funds, insurance companies and investment banks, and the “capital markets,” meaning investor relations, initial public offerings, and communications for corporate restructurings such as spin-offs.
They said there is a strong trend for very large companies to split into two or more publicly held entities that allow management to focus better on certain areas and thus increase shareholder value.
Edelman staffers don’t take part in presentations to Wall Street firms and other investors but help with their creation, they said.
“We help them to tell their stories in the most effective way,” said Myers.
The firm not only works on the financial aspects of clients but their general reputations.
The Edelman Trust Barometer has found that trust in the financial sector is at an all-time low and there is a “need to repair that,” said Zilka. The U.S. is the only country covered in the survey where trust declined in all the institutions measured.
The financial practice also gets involved in legislative and regulatory matters not only in the U.S. but abroad, they noted. Edelman operates in 27 foreign countries. The biggest office abroad is in London with $56 million in revenues in 2011 followed by Canada, $24M; Germany, $16M; China, $14M and Paris and Sao Paulo, Brazil, $10M each.
Specialists are mostly concentrated in cities that are major financial centers such as New York, Chicago, Boston, San Francisco, Hong Kong and London.
Edelman financial specialists can draw on the marketing and product expertise plus the media and social media contacts that the firm has built up in numerous product and service areas.
Edelman’s revenues, which totaled $604M in 2011, lead 11 of the 12 practice areas tracked by O’Dwyer’s, usually by very large margins—healthcare, tech, financial, food, beauty/fashion, environmental/PA, entertainment/cultural, home furnishings, professional services, travel/hospitality and agriculture. The lone exception is sports/leisure where Taylor Global leads with $10,350,000 in fees followed by Catalyst Public Relations with $5,094,633 and Edelman with $5,041,504.
ICR, Norwalk, Conn., $29,950,681
Thomas Ryan, CEO and co-founder, said double-digit growth in 2011 was driven by 37 new client wins. Another 22 new clients have arrived since the first of the year. Clients were added primarily in retail, technology, energy and healthcare, he said. Cited were Kosmos Energy, Carbonite, Pandora Media, AMC Entertainment, Teavana and LipoScience.
The “Xchange,” ICR’s annual investor conference, hosted 175 private and public company management teams last year and drew more than 1,500 attendees. Revenues increased “dramatically” over the previous year, said Ryan.
“Most importantly,” he said, we continue to provide strategic IR including IPO-readiness, media relations, crisis management and traditional corporate communications.”
ICR, with more than 325 clients served by 100 employees, offers senior counsel in more than 20 industry verticals.
“Our competitive advantage,” he said, “comes from senior-level capital-markets experience, deep industry knowledge, and more than a decade of communications experience. Client services stress an integrated approach where teams of former Wall Street and corporate veterans, including senior sell-side analysts, portfolio managers, and investment bankers combine with senior PR, media and corporate communications professionals to provide a unique level of advisory services.”
APCO Worldwide, Washington, D.C., $13,396,680
Larry Snoddon and Jeff Zelkowitz, co-leaders of APCO's global financial practice, said it advises corporate clients on financial communications, transactions and other material events; works for financial services clients such as major banks and insurance, investment and real-estate firms and associations, and helps clients to navigate financial regulatory and policy issues and crises.
Snoddon and Zelkowitz
“In 2011,” they said, “we won significant new client projects around the world, including advising on some of the most high-profile M&A deals of the year, and
expanded several existing accounts.”
APCO was appointed by the trustee for the MF Global liquidation (one of the largest bankruptcies in U.S. history) to provide communications strategy
It advised major M&A deals in the healthcare, financial, media and energy sectors, including the $8-billion merger between Exelon and Constellation Energy to create the number-one competitive energy provider and one of the largest electricity and gas utilities in the United States. In Asia, APCO led financial communication for the US$1.5 billion IPO of CITIC Securities (the largest securities firm by market value in Mainland China) in Hong Kong.
CITIC Securities was the first Chinese firm of its kind to launch an IPO outside the mainland and was one of the few companies successfully listed on schedule during the turbulent market environment in the fall of 2011, said Snoddon and Zelkowitz.
APCO has an integrated offering called the “360°-approach Material Issues & Events” that helps companies and institutions to better manage the stakeholder environment and communications opportunities and threats involved in high-stakes situations such as mergers and acquisitions, management changes, financial crises, investigations, litigation, etc. , they said.
The proprietary APCO Predictive Risk & Opportunity, or PRO, model enables companies to develop effective integrated strategies for various stakeholder groups, which the firm then executes using its full range of communications, public affairs, media relations and online and social media capabilities, said Snoddon and Zelkowitz.
Ruder Finn, New York, $12,818,018
Rachel Spielman, global head of corporate communications, said the firm’s approach is to “integrate investor oriented activities as a fundamental plank in our overall corporate reputation offering.”
“Corporate reputation has taken on increasing importance for all stakeholder groups,” she said. “As stakeholder groups are increasingly interdependent, they should be strategically linked in programming outreach.”
Most of the firm’s work focuses on the broad range of consumer and business/financial-oriented channels. Targeted activities reach specific segments of both buy-side and sell-side institutional investors and analysts.
The focus is on strategic positioning for clients in the financial arena and particularly on strategic moves, transactions and restructuring, said Spielman.
Digital channels are becoming increasingly important for investors and RF is putting special emphasis on providing real-time information and response as well as shaping content through owned and shared as well as earned media, she said.
A specialized group at RFI Studios focuses on monitoring and delivering content for these channels.
Asked whether the firm is helping clients to interface with individual investors on social media, Spielman that since financial news and information is a highly regulated area, the firm makes sure that all responses to individual investors on SM channels are “fully transparent and aligned with publicly available information.”
MWW Group, Metro New York, $5,967,000
CEO Michael Kempner said the firm’s financial communications specialists have shown excellence in advising clients and have established strong relationships in the investment community and media.
This background was especially useful when a global economic crisis hit in 2008, he noted. “Since this was not the first economic downturn our IR specialists have witnessed, they were well equipped to counsel and work with our clients to ensure they not only achieved their business objectives, but continued to build their relationships with their customers, employees and investment community,’ he noted,
"With signs of an improving economy in 2011 and the strengthening of our clients businesses, we continue to grow our programs with existing clients and attract new clients," said Kempner. "We provide value to our clients as a recognized leader in crisis communications, corporate communications, government relations and public affairs, digital/social media, healthcare and nutrition, technology and consumer lifestyle."
MWW’s financial communications practice represents clients across a broad range of market caps including micro- to large-cap companies, and diverse industries including manufacturing, consumer products and services, food and beverage, REITs, financial services and technology. The firm works closely with clients to develop proactive media programs that reach target audiences. The focus varies, said Kempner, based on the life cycle of a particular programs or the client’s desire for visibility in a particular market or media, and whether it is consumer or Wall Street-oriented.
MWW has helped more than 300 companies go public, a record for a communications firm, said Kempner. "We were extremely pleased to have the return of IPOs in 2011 and the trend is continuing in 2012.," he added.
Social media are being embraced by many MWW clients. Public companies have to be careful that communications with investors satisfy discosure rules, he said. Future customers and potential investors are being engaged via Facebook, Twitter, Google+ use, corporate videos, commercials, contests, holiday greetings, product promotions, surveys and other channels.
The improved stock market, now back to its all-time high, means that managements are more receptive to new ideas to support PR and financial communications objectives, said Kempner. "Companies are continuing to file for public listing although we have yet to see many small companies looking to go public," he said.
He said he looks for the economy to continue to improve with more new home sales and contracts, an improving jobless rate, and increased consumer confidence.
Intermarket Communications, New York, $4,837,425
CEO Martin Mosbacher said the firm’s 23% growth last year brought it to a “high water mark.” The financial crisis that started in 2008 had resulted in a down year for the firm in 2009 for the first time in more than a decade.
Growth came evenly from existing and new clients, he said.
“Our book of business is extremely balanced right now with buy-side and sell-side, institutional and retail, technology and service providers all in the mix,” he added.
A major client is Nestle, nutrition, health and wellness company. More than 25 clients are on an annual retainer, the most in the firm’s history. No single client accounts for more than 10% of revenues.
For most of its history, Intermarket operated as a consultancy, restricting the number of clients to those that could be handled by the founding partners.
“We have now built a strong and deep management team that has allowed us to shift to an agency model and that has led to our rapid growth,” said Mosbacher.
Dukas Public Relations, New York, $ 3,389,000
“We grew rapidly in 2011 because of the strong demand from financial, asset management and professional service firms for ongoing top-tier media relations,” said Richard Dukas, president and CEO of the firm.
“Despite a realignment of the media environment and the explosion of social media, DPR continues to see strong demand from clients that hire a PR firm because they want media coverage in the Wall Street Journal, Barron’s, New York Times, Financial Times, CNBC and Bloomberg—they want to be out front of the people who make the investing and buying decisions,” he said.
He feels DPR is an alternative for companies that don’t want to spend $250K and up yearly for an IR/PR program at one of the larger agencies.
“The explosion of mobile devices, combined with the increase in corporate IT spending, also is creating a strong demand for the services of our tech practice," said Dukas.
Bliss PR, New York, $2,710,000
Donna McSorley and Toddi Gutner, Co-Chairs of BlissPR’s Financial Services Group, attribute growth of the practice to client service, patience and understanding during a time of economic concern. “
McSorley and Gutner
“2011 was a year of stress and change for our financial services clients,” said McSorley. “Our job was helping them understand that we are an extension of their internal team, and counseling and assisting them with projects outside our scope of work.”
The Financial Services group added more than $233,000 worth of new business in 2011. Practice revenues grew by roughly 10%.
“We attribute our success to both organic growth and expanded offerings through digital and content marketing,” said Gutner. “At the heart of it all, the ability to draw compelling content from our clients is what helps differentiate them in an already crowded marketplace.”
Both McSorley and Gutner also note that the Practice benefited from a few key senior level hires which brought new ways of thinking and creativity to the group. The Financial Services Group represents roughly 40% of revenue across BlissPR’s three practice groups.
Levick Strategic Communications, Washington, D.C., $2,497,798
Richard Levick, president and CEO, said the financial practice at the firm is approximately 70% consumer-financial with 30% geared to buy-side and sell-side specialists.
“There is significant overlap in that our consumer-financial work typically reaches a sophisticated audience that includes the full range of analysts and brokers – rather than a mass retail consumer population – who also drive our more specialized IR practice,” he added.
LSC last year expanded its Mergers & Acquisitions practice, handling communications related to four transactions, each valued at more than $1 billion. A priority this year is to expand work on IPOs. Plans are to open a New York office this year.
Asked about how much of the firm’s growth is due to the rising stock market, Levick said it has helped since a rising market means more deals, more expansion, and a greater need for communications to support growth.
In a bullish economy, lower market value companies have a strategic need to differentiate themselves, and the only way to do that is through an aggressive communications campaign, he said.
He describes the firm’s practice as counter-cyclical. A challenged market leads to diverse crises and Levick’s Financial Practice includes prestigious crisis management capabilities, he said. The same dynamic applies to President Obama’s re-election prospects. He said that if Obama’s re-election engenders onerous new regulatory initiatives, the firm’s financial clients will want to manage communications in order to minimize exposure as well as to influence public perceptions during adverse circumstances. If the results in November – whoever wins – inspire new market confidence, the firm will provide communications strategies for the renewed growth that results.
Levick said use of social media is a major firm-wide activity although it’s less of a factor for IR because of regulatory and discosure concerns. He noted there was reluctance to embrace websites for IR in the 1990s for that reason. But firms adapted to the new channels and the same process is occuring now with SM, he said, noting that a reported 83% of brokers, with limited access to institutional research, get their investment ideas from reading articles.
Few financial services clients interface with individual investors via SM channels because of the distrust and disconnection created by the financial collapse and attendant reputational crises, said Levick.
But he feels the current alienation only suggests a greater role for SM in the near future as a tool for effective large-scale re-connection.
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