And Now There Are Five

The announcement by Omnicom PR Group of the consolidation of Golin with Ketchum and FleishmanHillard with Porter Novelli is further confirmation of the fundamental reshaping of the PR industry. There will be five global, full-service firms: Edelman, Weber Shandwick, Burson, FleishmanHillard and Golin. Only five years ago, there were five others: Hill & Knowlton, MSL, Ogilvy, Porter Novelli and Ketchum.

What’s happened to the PR industry?

1. Reaction to the Downturn of the Last Three Years — The recovery from COVID-19 was dramatic, led by spending in health and technology. The downturn has been a slow escape of air from the balloon. The holding companies insisted that their agencies maintain 25 percent to 30 percent margins while revenue dropped in some cases by 40 percent. The only way to achieve that was to close or combine international offices while reducing staff in core markets. Edelman, as a private company, maintained its global footprint and its breadth of services.
2. The Growth of the Advisory Firms — Hill & Knowlton and Burson had the best financial and public affairs practices in the industry 20 years ago. Much of that high margin work has moved to Teneo, FGS Global and Brunswick. The only global firm that competes vigorously in both of those important segments is Edelman.
3. The Combination with Ad Agency — Both Ogilvy and MSL have suffered from becoming line extensions of the agency. MSL lost its global network in the Publicis One structure, which gives priority to the geographic/regional entity in management. Edelman works with ad agencies as an equal, offering our own ideas for earned-first strategy, not as an add-on.
4. Inability to Invest in Growth Areas — Influencer firms were acquired by the holding companies and given to the powerful media buying units instead of partnering with the PR operations. By contrast Edelman makes the most of its influencer business by combining Creator with earned media and digital.
5. AI Investment — The orientation of the holding companies is the PESO model (Paid, Earned, Social) which allows custom content to be served up to the highest potential consumers targeted through data. We are putting our bets on the ESO model of Earned, Social and Owned media, which is winning the race for LLM search outcomes. PR should lead, not follow, in this game, particularly in a world of rising nationalism requiring the melding of brand and reputation skills.

I want to pay tribute to industry leaders from Ketchum, including Paul Alvarez, Mike Doyle, David Drobis, Rob Flaherty, and Barri Rafferty, plus the leaders of Porter Novelli, including Bob Druckenmiller and Bill Novelli. They did so much to build our industry. We intend to fight for PR in its broadest construct, believing that Trust Drives Growth and Action Earns Trust.