Aarti Shah 27 Feb 2018 // 5:13PM GMT
NEW YORK — WPP has merged Burson-Marsteller and Cohn & Wolfe into Burson Cohn & Wolfe (BCW) led by Donna Imperato, the holding company announced Tuesday.
Cohn & Wolfe CEO Imperato is chief executive officer of the new entity, while Don Baer, Burson-Marsteller’s worldwide chair and CEO, becomes chairman with a focus on client counsel. Burson global president Kevin Bell will hold the same position at BCW.
The merger makes Burson Cohn & Wolfe one of the industry's top three largest PR firms. In 2017, Burson-Marsteller was ranked as the 6th-largest PR firm with global fee income of $480m following another year of flat growth. Cohn & Wolfe ranked 12th at $224m with 12% growth, according to the Holmes Report's Global PR Agency Ranking.
WPP announced the merger on the heels of a tough 2017, which included some of the company’s worst financials since the global crisis.
In a conversation with the Holmes Report, Imperato said $700m was "in the ballpark" of the combined entity, adding that this figure does not include various sub-brands such as GCI Health and AxiCom that will continue to roll into BCW.
"We're up there with Weber Shandwick and Edelman — number three," she added.
The combined entity will be a network of more than 4,000 employees, across 42 countries. Imperato said there are no layoffs planned, noting BCW is three times the size of Cohn & Wolfe, so most of the added staff will be necessary. There are also plans to hire more talent around integrated services.
"Having said that, I will be assessing talent and making sure we have the right people to get us where we need to be," she said. "I want to be the best global agency in the world. This wasn't done to find cost-efficiencies — that wasn't even part of the discussion."
WPP said the merger "combines Cohn & Wolfe’s expertise in digitally-driven, creative content and integrated communications – across the consumer, healthcare and technology sectors – with Burson-Marsteller’s strength in public affairs, corporate and crisis management, technology and research."
Because the two firms are "complementary" there are "limited conflicts" among clients. "We did a quick look at top, top clients and there aren’t any glaring conflicts," Imperato said. Firewall teams and the numerous sub-brands, especially within healthcare, will be used to mitigate conflicts that emerge.
Imperato said the ultimate decision to merge the two firms happened relatively quickly, so the new leadership team is still being fleshed out. The Holmes Report understands that the announcement was planned for next month, but was brought forward following an internal leak last week.
In the interim, Imperato has formed an executive group comprising select senior leaders from both agencies. She declined to cite specific members of this team.
"We have to focus on servicing clients and making sure everything comes together in a very smooth way," she said. "One of the first things we're going to look at is our offices around the world and the places we can move-in together and integrate there."
Prior to today's announcement, Cohn & Wolfe was working on an integrated services acquisition that will "likely proceed" in the next few months, Imperato said. In addition, she's considering acquisitions in Asia-Pacific and at least one that Burson-Marsteller had planned.
She describes BCW's offering as "integrated digital solutions grounded in earned media," adding there's an opportunity for creative technology to drive campaigns. The new agency branding and website will be launched in coming months.
Imperato's vision also includes expanding AxiCom into a global technology agency, in addition to growing BCW's offering in this area. BCW's culture will be "a fun place to work, a very energized, dynamic culture. I need a lot of passion around me because I'm very high-energy and passionate myself."
When asked how she plans to navigate potential integration pitfalls, Imperato drew upon her experience merging GCI Health with Cohn & Wolfe.
"I'm getting counsel and input, but to make sure things go smoothly I'll be making decisions quickly and putting people into their roles quickly," she said.
With this merger, Imperato becomes the first woman to lead a top three firm, notably a few months after Ketchum CEO Barri Rafferty became the first woman to lead a top five firm.
“Our decision to merge the two agencies is driven by strong, compatible capabilities and expertise, a combined ability to deliver integrated solutions across multiple sectors and the scale to compete with the largest communications agencies in the world,” WPP CEO Sir Martin Sorrell said in a statement.
“After years of strong leadership and delivering excellent results at Cohn & Wolfe, I know that Donna will ensure the success of the combined business," Sorrell said. "I would also like to thank Don for his contribution as CEO of Burson-Marsteller over the last six years. I know he will continue his dedication to serving clients and now be able to focus entirely on high-level counsel to those clients as chairman."
Additional reporting by Diana Marszalek.