Diana Marszalek 14 Feb 2023 // 6:22PM GMT
NEW YORK — Edelman has reported revenue rising 12.8% to a record $1.079 billion in 2022, solidifying the world’s largest PR firm’s stature as the first $1 billion PR agency.
The strong showing builds on Edelman’s impressive rebound in calendar year 2021, when revenues rose 15.4% on a like-for-like basis to a then-record $985 million following a 5.7% decline in 2020. The agency, which is celebrating its 70th year, cracked the $1 billion mark in its 2022 fiscal year, during which revenues rose 18%.
As a keenly observed barometer of industry health, the earnings report is expected to signal continued resilience of PR firms post-Covid pandemic.
CEO Richard Edelman credited the continued growth to increased business from the firm’s top 100 clients, which rose 17%, and its strongest sectors including tech (up 13.5%), financial services (up 13%), health (up 10%), and food (up slightly less than 10%). The firm’s Gold Lion-winning See My Skin campaign for Vaseline, support of Pfizer’s low-cost vaccines and Dove campaigns in Thailand and Canada were among the year’s hallmark work.
New business includes LinkedIn’s social and digital work and handling communications for the 2023 UN Climate Change Conference slated for December in the UAE.
The fastest-growing regions included the US, up 13.8% to $703 million; EMEA, up 11.9% to $211 million; and Latin America, up 41% to $26 million. The fastest-growing markets were Washington (22%), Los Angeles (24%), Chicago (14%), London (16%) and the Middle East (19%).
APAC grew 4.8% on a like-for-like basis. However, actual growth (taking FX fluctuations into account) in the region dropped 1.4% to $104.4 million.
Currently, the US and UK account for roughly 70% of the firm’s business, though Edelman said that over time “we do want to devolve that,” adding that unspecified acquisitions outside the US are in the works.
At the same time, Edelman said he believes being heavily weighted in the US, which currently has better economic prospects than other regions, will help sustain the agency amid inflation and other economic concerns, which already has prompted big cutbacks in sectors like tech “which is a big part of our business.”
In December, the agency reduced its workforce by about 2%, or 130 employees. “Edelman is always aggressive during downturns,” Edelman said.
After laying off 390 employees in June 2020, Edelman hired more than 800 people in 2021, taking the firm past 6,000 in headcount, and also restarted acquisitions by snapping up public affairs consultancy Basilinna in 2021. Last year, furthermore, the firm bought 60-person Brooklyn content and creative shop Mustache, which will focus on supporting Edelman's specialist sector agencies, including Revere (technology), Salutem (healthcare), and Edible (food).
Edelman said he expects 2023 growth to be roughly half of what it was in 2022 “but I do feel more confident than I did in the fall.” While a slowdown is likely, Edelman said he doesn’t foresee full-blown recessions like the ones the firm weathered in 2008 and 2001.
Also in 2023, Edelman plans to further the more aggressive climate change agenda it adopted early last year in response to calls from industry advocates to cut ties with Big Oil, which includes walking away from companies that do not meet a series of criteria on climate action. The firm has parted ways with two of its most 20 emissions-intensive clients since that time.
And this past year, Edelman also reached 31% racially and ethnically diverse employees in the US, after reaching its initial goal of 30% ahead of our 2022 timeline. As of January 2023, 56.3% of our global leadership are women and 62% of our U.S. leadership are women.