The moral of the 2011 O’Dwyer rankings of PR firms is that reporting revenues and staff size is good for growth.

Edelman, a firm that has taken part in the O’Dwyer rankings since they were started in 1968, reported $604 million in fees for 2011, which is five times as much as No. 2, APCO Worldwide at $120M. Publicizing its overall size for 42 years and then the extent of 12 special practice areas has no doubt been a factor in the firm’s growth.

Edelman leads in 11 of the 12 PR specialties that we have tracked since 1990, often by tens of millions of dollars.

The 1969 and second ranking we compiled had 50 names on the list. Only Edelman, Ruder Finn and Hunter PR (formerly known as Dudley-Anderson-Yutzy) are still providing figures to us. Nineteen of the 25 biggest sold out to ad/PR conglomerates, merged with another firm, or went out of business.

Conglomerate PR firms, after an initial move aimed at taking over the rankings, disappeared from them in 2002 after the passage of Sarbanes-Oxley, which tightened financial reporting rules.

The conglomerate PR units and nearly 100 other firms formed the Council of PR Firms in 1998 and announced that henceforth, the Council would do the ranking of PR firms. The PR firms were going to rank themselves.

PR Firms Decided to Rank Themselves

CPRF sent forms to 5,000 PR firms throughout the U.S. to collect data. CPRF members refused to give us any figures so we were forced to use CPRF-collected data that allowed paid ads to be counted among PR revenues.

The ranking in the 2001 O’Dwyer’s Directory of PR Firms had this headline: “Council of PR Firms’ Top 50 Worldwide and U.S. Ranking for 2000.”

But, because of SOX, CPRF’s foray into a role traditionally performed by media lasted only one year.

Edelman was ranked No. 9 in 1976 among the top 25 with $3,251,773 in net fees, far in back of such firms as Hill & Knowlton at $17M and Burson-Marsteller at $13M. In 1988 it was No. 8 with $31M in fees, far behind Hill & Knowlton with $145M and Burson-Marsteller with $138M. As of 2000, Edelman was still No. 6 at $238M in back of No. 1 Fleishman-Hillard at $342M and Weber Shandwick at $334M.

Some major firms bought themselves back from the conglomerates and returned to the rankings including APCO and MWW.

Specialties Show PR Has Matured

The development of the specialties shows that PR has matured in the past couple of decades (just as law and medicine developed specialties).

Clients want expertise in certain areas that have become highly defined such as tech, healthcare, financial, food/beverages and beauty/fashion, to name some of them.

What has sprung up in recent years is a group of firms in tech, healthcare, financial and some other areas that focus on one of the specialties.

They are thriving and are able to compete against the giants such as Edelman, APCO, Waggener Edstrom, Ruder Finn, Text 100 Global PR, WCG, and MWW Group.

Tech specialists, which are either 100% tech or close to that, include Atomic PR, up 35% in 2011 to $15M; Sparkpr, +17% to $10.3M; Davies Murphy Group, +36% to $8.8M; The Hoffman Agency, + 11% to $9.1M; Airfoil, + 19% to $8.1M; Launch Squad, +30% to $7.5M; Merritt Group, +15% to $7.1M and Borders & Gratehouse, +66% to $2.9M.

Healthcare specialists thriving include WCG, +29% to $47.5M; Revive, +23% to $4.6M; Jones PA, +149% to $4.2M; Jarrard Phillips Cate & Hancock, +16% to $3.8M, and Dodge Communications, +25% to $3.6M.

In the financial arena, ICR has been neck-and-neck with Edelman at the $30M mark. Specialist Intermarket Communications gained 23% to $4.8M and the financial practice of Dukas PR jumped 67% to $2.7M.

An appealing argument of single-practice firms is that they only care about that one area and are not distracted by any others.

Big department stores attract customers because of the variety of their offerings but specialty stores such as those for shoes and sporting goods can successfully compete against them.

Conglomerates Invited to Participate

We have invited the conglomerate PR firms to describe their special practices in the May O’Dwyer’s magazine. Indications are that H&K, B-M and other conglomerate-owned firms are billing in the hundreds of millions.

WPP, Omnicom, Interpublic and Publicis provide overall totals for their units but that is not what the market is looking for. Clients want expertise in specific areas and want to know how many staffers are available for work in those areas and want to see evidence of past work in those specialties.

PRS Saw Need for 'Certification'

The PR Society in 2007 recognized the development of the specialties and sensed it had to do something or the PR industry would pass it by.

A 15-member “Blue Ribbon Task Force” was assembled headed by Seattle counselor Bob Frause, chair-elect of the College of Fellows.

He told a leaders’ teleconference that the “next step in professional development” is certification in areas like healthcare, utility PR and government relations. He proposed “certificates of expertise” in such industries and called for input from the 19 sections (now 15) and the 115 chapters (now 110).

Nothing ever came of the Task Force but the Society was on the right track. Stumbling block was the individual nature of PRS memberships. It only recognizes individuals whereas clients need the expertise of many people who are either in one firm or in a large specialized department.

Shift to NY Helped Edelman

A major factor in the growth of Edelman was increased emphasis on New York.

That office went from being a branch to co-headquarters with Chicago and the base of operations of CEO Richard Edelman. New York fees and staff passed those of Chicago years ago and now stand at $118M in fees and 638 staff vs. $90M in fees and 583 staff in Chicago.

Two elements of Edelman’s growth—openness and appreciation of what New York has to offer—are missing at the PR Society which has shown marginal growth in the past 14 years although the number of PR people has grown to 270,000+.

The APRs who took control in 1980 with the election of Patrick Jackson as president allowed only one PR pro at h.q. from 1984-94 (Donna Peltier); moved offices from midtown to midtown South in 1987 and then all the way downtown in 2004, virtually eliminating use by New Yorers, and evicted the New York chapter in 1992 claiming lack of space (although part of the office was being sublet to the Metropolitan Transit Authority).

No PR Society chair or president has addressed the chapter in more than 20 years. Chapter leaders were recently told the national conference will never be in New York again because hotel costs are too high. New York was the conference site in 1990 and 2004.

PRS membership which was 19,600 in 1998, is currently 21,000. The 1,400 gain in 14 years is 100 yearly or less than one new member a year for the 110 chapters.

PRS has not done much PR for PR but neither have the other PR organizations.

New York Times columnist David Carr wrote Jan. 29, 2012 that PR is “slop” delivered by “underlings” who provide “written statements that say nothing.”

Not a peep was heard from PRS, CPRF, the Institute for PR or the Arthur W. Page Society. At a minimum, one or all of the groups should have set up a meeting with Carr, heard him out, and promised corrective actions.