by Jack O’Dwyer, publisher of O’Dwyers

Publicizing its overall size for 42 years and the extent of its 12 special practice areas has been a factor in the growth of Edelman Public Relations. The PR firm led all others in 11 of the 12 PR specialties tracked since 1990 by O’Dwyer rankings of PR firms, often by tens of millions of dollars.

The moral – reporting revenues and staff size might be 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.

Shift to NY Helped Edelman

Two elements of Edelman’s growth are openness and the appreciation of what New York has to offer. To put it simply, New York was the major factor in the growth of Edelman.

The Big Apple went from a branch to co-headquarters with Chicago. It is currently 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.

A Need for Independent PR Rankings.

The first two ranking conducted by O’Dywers had a list of 50 agencies, today only Edelman, Ruder Finn and Hunter PR (formerly known as Dudley-Anderson-Yutzy) are still providing figures.

Nineteen of the 25 biggest firms have been sold to ad/PR conglomerates, merged with another firm, or have gone 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.

PR Firms Decided to Rank Themselves

The council sent forms to 5,000 PR firms throughout the U.S. to collect data. Members refused to give O’Dwyers 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’Dwyers Directory of PR Firms had this headline: “Council of PR Firms? Top 50 Worldwide and U.S. Ranking for 2000?”

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

Edelman was ranked No. 9 1976 among the top 25 with $3,251,773 in net fees, far back of such firms as Hill & Knowlton at $17M and Burson-Marsteller at $13M.

In 1988 it was No. 8 with $31M in fees behind Hill & Knowlton with $145M and Burson-Marsteller with $138M. As of 2000, Edelman was still No. 6 at $238M, with Fleishman-Hillard in the first position at $342M and Weber Shandwick following 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 specialty areas in the profession shows that PR has matured during the past couple of decades, just as law and medicine developed specialties.

Clients want an agency with expertise in areas that have become highly defined such as tech, healthcare, financial, food/beverages and beauty/fashion.

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, 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 the ability to concentrate on one area and not be distracted by others.

Comparing large and small PR firms is similar to a consumer deciding on where to shop. The 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

Conglomerate PR firms have been invited to describe their special practices. Indications are that Hill & Knowleton, Buston Marsteller and other conglomerate-owned firms are billing in the hundreds of millions.

WPP, Omnicom, Interpublic and Publicis provide overall totals for their units, but do not break down specialty units.

Clients continue to demand expertise in specific areas and want to know the available and number of staffers to be assigned for work in those areas. They also want to see evidence of past work specialties.

PRSA Saw Need for Certification?

In 2007 PRSA recognized the development of the specialties and sensed the need for PR industry to address the issue. A 15-member Blue Ribbon Task Force was assembled headed by Seattle counselor Bob Frause, chair-elect of the PRSA College of Fellows.

In his report he found the next step in professional development should be the certification in areas such as healthcare PR, utility PR and government relations. He proposed certificates of expertise in such industries and called for input from the association’s chapters and members.

The Task Force study was disregarded, but the Society was on the right track.

The need for independent outside ranking of PR firms – both large and small, general or specialty – is needed more today than ever.

O’Dwyers is committed to the impartial reporting of the PR industry.

During the last 20 years, industry growth lies mainly at the agency level. PR firms have exploded in size and depth of coverage, while internal corporate PR has lagged behind depending more and more on agency expertise.

It is imperative that that the corporate PR professionals have up to date information when choosing an agency to work with and represent their staff and their company.

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Tags: Be Heard Austin, Edelman, IABC Austin, Jack O'Dwyer, O'Dwyers, PR, PRSA, public relations, rankings