Key takeaways:

  • In 1978, Richard Edelman came into the firm founded by his father, at which time it was a $6 million agency; today, it is a billion dollar business.
  • Edelman built a firm to compete with all comers, from big ad agencies to boutique corporate and financial specialists.
  • There’s still huge power in traditional mainstream media, Edelman says, but PR people today have many more channels at their disposal.
  • The “mass class divide” is driving the erosion of trust in institutions that Edelman has monitored over the past 25 years.
  • People remain suspicious of innovation and if AI is going to be part of the solution, PR has to demystify, and show people how it can help them.


Paul Holmes: In this new series, we're going to be talking to the CEOs of some of the world's best public relations agencies, talking about the development of their agencies, the evolution of the business and what they see in the future. And we’re staring with Richard Edelman. Richard and I go back almost 40 years and I wanted to start back then because I came into the business while his father, Dan, was still in charge at Edelman and I wanted to talk about the business you joined and how it has evolved since then.

Richard Edelman: So I came into Edelman in 1978 when we were $6 million in revenue. I took over the firm in 1996 and we were $85 million. And today we're around a billion dollars in revenue. The firm has become more global, it’s become much more corporate as well as being strong in brand. We've diversified into digital. We've built a very strong  creative business.

PH: I don't know if you remember this, but when I first arrived in the States in 1987, we published our first ever agency report and I think it's fair to say that we were not particularly kind to Edelman. Other agencies reacted badly to the criticism we offered, but I will always remember that you invited me to come in and sit down and talk to you about what I was hearing in the marketplace and what the marketplace thought were the issues with Edelman. A lot of it came down to the culture.

RE: At that time, we had a lot of turnover of clients and people, and we were a classic kind of entrepreneurial company with all the good things, but some of the bad things. My father would go to a PR conference and meet someone from Germany and the wall had just come down and he said, well now we have an office in Berlin. That was deeply entrepreneurial and sometimes ahead of its time.

But what I took from your critique was we had to institute a quality program to make sure that clients that were in the house were grown and tended to and given the best service without losing that edge.

PH: How much did your management education play into sort of taking Edelman from that improvisational style to something with a little more structure and discipline.

RE: I think it was clear to me that we had to globalize, and we needed to have growth engines as products. And that we needed to recognize that we were competing more broadly than against our fellow PR firms. That we could compete with ad agencies or digital firms. If PR budgets were only 5% of total spend, we had to get to the other 95%.

The market has fundamentally evolved so we're now competing against the financial PR firms, the Teneos, Brunswicks. We're competing against management consultancies. We're competing against ad agencies as well as our classic PR firms.

PH: The competitive landscape is very different now than it was when we first met. But I'm interested too in the evolution of your attitude towards independence because in the 30, 40 years that we've known each other, I think there have been two or three different times where the market assumed that Edelman would join the parade of agencies that had been subsumed into Omnicom, Interpublic, WPP. How has your commitment to independence wavered and strengthened?

RE: I would say it's only strengthened because what I've observed is that formerly great agencies under the holding company umbrellas have been weakened and in some cases done away with. I think that that is indicative that PR is a support element in holding companies. It's not the lead driver of strategy.

We are broadening our reach and our approach so that we're beyond PR. We're in other categories, digital, etc. And yet, our whole theory of trust drives growth and action earns trust is an earned idea. The same is true around earned creative tied into creator economy. It's all premised on PR thinking and I think we're the only ones that have that ability to do that at scale.

Our dream is to be a full solution as opposed to being just a wing of an army that has a different general.

PH: You've already alluded to I think that the two big trends. The first is this move towards a more integrated PESO model that moves beyond earned media, with public relations at the heart. Content creation that spans every channel. That has involved bringing in more creatives, more data and analytics people, people with skills that have nothing to do with talking to reporters or getting media coverage. You have been investing in that for the last decade or so. Tell me about that.

RE: I clearly saw that the legacy media was going to have an economic problem, that local newspapers were going to be winnowed, that local broadcast was going to shrink. You'll remember that my dad did media tours and served stories up to media outlets all over the US and then all over the world.

PH: Anybody listening who's never heard of the Toni Twins should look that up after we’re done.

RE: Yeah, seven sets of twins going to different parts of the country and visiting radio stations and TV stations. The question was the shrinking media environment. So we were very early in our own content creation and now, in having social channels for brands and in also identifying influencers who then became content creators. We've just shifted our focus from classic reporters to new reporters.

PH: Is what's happening now a continuation of that trend? Because from my perspective, it feels different, right? We've seen the Washington Post lose a quarter of a million subscribers overnight, and a ton of journalistic talent, Jen Rubin just went out to start her own thing. The Contrarian. We now see CEOs would rather go on Joe Rogan than talk to a mainstream journalist. Are the Post and the Times zombie media, dead men walking?

RE: I don't think it's either or, I think it's and. It's true that some of the mainstream media have had winnowing audience. And at the same time, the New York Times, the Wall Street Journal, the FT have record subscriptions, a lot of them digital, not print. I believe there's still huge power in the mainstream media. And a placement in the Wall Street Journal is still hugely important.

At the same time, there's a problem of dispersion of authority. And so I don't believe you have to start with an interview in Bloomberg. You now can start with a small piece in Axios and then it goes into a podcaster. And so your media array is much broader.

I also believe, though, with the changes at Meta that there has to be a lower bar for intervention by PR teams. We've got to be much, much more 24/7 watching and saying this has the potential to spiral. We have to be ready to intervene with facts. With the change in the media environment, I think all of business, government, NGOs need to speak up more quickly and continuously because disinformation is the threat to society. If we don't have agreed facts, we don't have consistent decisions.

And all of this is being cheered on in Beijing and in Moscow. It's our job to have clarity. I think it's also our job to be the first draft of history now. With no journalist to evaluate whether or not this pitch is fake, we have to decide that ourselves. And we have to be much harder with our clients and say, prove it, show us.

PH: We talk all the time about disinformation as if it's purely a supply problem, but it's also a demand problem. You can see what's going on with the wildfires in California, people are seeking out and eating up disinformation.

RE: You and I talked 15 years ago about the possibility of citizen journalism and all of this being very positive. And it is in a certain way, but properly done. If people are trying to make political points by fake news, this is destructive of the system. One of the findings that most scares me in the 2025 Edelman Trust Barometer is the loss of belief in capitalism and that people don't think the system works.

PH: The other big trend I wanted to talk about is C-suite counsel. At the same time that there is an element of our business that is going through a crisis of confidence about what it means to be earned first when earned media are collapsing, there is a segment of our business that is being called upon to answer bigger, more important mission critical questions than ever before. It peaked with Russia and public relations people giving advice on the reputation risk of doing business with Russia after the invasion

RE: You'll remember that I'm officially banned by the Russian Federation.

PH: Congratulations.

RE: At the top end of our business, what we do is more important and more valuable than it's ever been. That is a recognition from CEOs that this stuff matters. It matters deeply.

And I think the mistake would be to say now, CEOs can keep their heads down and this age of grievance will just pass. And I think CEOs should focus on the areas in which their businesses can make an impact and that are good for their business. Affordable products, good wages, reskilling, are all straight business topics.

This is not something that right or left is going to criticize. Business is still the most trusted, combining competence and ethics, and should use its position to benefit society. It's not a bad thing to have society function well. That's what we should want. But you've got much more geopolitical strife. You have mass class divides. You have battle for truth.

So CEOs have to choose. It can't be the overall solve. Government has to stand up and do better. There's no question.

PH: You're unveiling a new Trust Barometer in Davos in a few days. Maybe we can talk about some of the findings. Because it seems to me that business feels it’s in a zero-sum game: it can’t address the concerns of the left without angering the right, and vice versa. And so it’s paralyzed, it seems. Is there a middle path?

RE: Let's start with the idea that we've entered a new phase, that we've gone from fears, which is in a certain way passive, to polarization, which is political, to grievance, which is aggressive.

And 60-plus percent of respondents say they're discriminated against, including 50% of American whites. You have billionaires and multi-billionaires who feel like they're being oppressed, it's not particularly surprising if you also have a vast number of ordinary people who feel that way. Grievance has become universal. And it's across gender, it's across age group, it's across income group, it's across ethnic group. It's quite stunning.

So what is the origin of grievance? Well, it's mass class divide. It's this battle for truth. It's definitely a sense that the system doesn't work for me. Paul, there's not a single Western democracy where the respondents believe that they'll be better off in the next generation, more than 30 percent. France is 9%, Japan is 10.

So what we need to do is we need to restore economic optimism and belief in the capitalist system. If we restore belief in institutions, people interestingly have economic optimism. Business has to play its role, which is economic engine, innovation, affordable prices, all this stuff. But government has to deliver. People see government as too biased, too wealthy. And NGOs have a new role, which is the healer and the unifying force

And then media is the fulcrum. Because if we don't have agreed facts and have media come back to the middle we'll never get to a good place.

PH: It sounds to me as if inequality and particularly unfairness is going to be one of the dominant issues of the next few years, that people need to feel that the structures around them are not giving them a fair shot. I could probably construct a case that business is the best equipped to help with that, but I could create an equally compelling case that it's the worst equipped to deal with that, because capitalism generally doesn't concern itself with issues of fairness and equity. How does business get involved with that problem?

RE: Business has a perilous course here because it's trying to navigate like Odysseus through Scylla and Charybdis. And you're trying to not be sucked into the whirlpool. If we can get people reskilled, good jobs, pay them well, make them feel as if they can get ahead, that there is a bright future.

I believe in AI. I believe in AI for health and all this stuff. But our research shows something like one fifth of people believe in AI. If you're highly aggrieved, you're totally against AI. Why? Because you think of it as like globalization, and it will ruin your job prospects.

PH: Are we going to be able to persuade people that AI is part of the solution or are they going to continue to see it as you just described as part of the problem?

RE: Again, if we keep it as a mystery and right now it's a black box for tech bros, that’s a problem. It has to be seen to have value to people. Like the Edelman family has a predisposition to this kind of disease. And we're going to be able to intervene in advance. And instead of taking months to look at these clinical trials, we can get down to the drugs that show the most promise in weeks and get you the right solutions.

We have to let people in on the secret. This is a key part of the PR business in the next decade. The how, the why, the fairness, the pricing, all of which needs to be explained. If you look at our study for last year, the rejection of innovation was shocking. It's like five to one against. AI could be very positive or very negative. The idea of making this more than a black box, of letting you in as a partner, listening to people's concerns, is very important.

One other thing I want to talk about, Paul, we still are living through the effects of COVID. And I don't mean health effects. I mean mental health. I mean the destruction of belief and expertise, in government, the idea somehow that people profited, the rich profited. We need a reckoning.

The UK government is actually doing a formal investigation of this for the fifth anniversary, bravo. We need to do this in the States and in some other countries. Truth and reconciliation. When you think of other disasters, 9/11, what was the intelligence failure? How did we fix this? All of this has to come out.

And also, this is another small hobby horse, we've got to get people out of their homes. This idea that you're better off just being on social and streaming and being remote, it's ridiculous. Human beings are are inherently better when they're together.

PH: Let me wrap up with a question about the competitive landscape. Last year was bookended by two fairly seismic events: the merger of Burson and Hill & Knowlton, possibly the two most august brands in our business. And then merger of Omnicom and Interpublic, which puts five, six global PR agency brands under a single umbrella. How do you view the impact of those changes on our business and your business?

RE: I think the general view is one of rationalization and cost cutting and it's not a bright picture. It is what commercial banks did in merging and reducing overheads and cutting offices.  The news that Publicis and Leo Burnett are merging, and the name Burnett's going away. It's going to be called Leo. I'm from Chicago, that's like, I don't know, eliminating Michigan Avenue.

I want to pursue a very different course. You know me, I like to run the pirate ship, and I go the different way.  I want to be counter-trended. I think that there is a really important opportunity.

PH: But you also consolidated a couple of months ago and that there were layoffs at a scale that the industry certainly paid attention to. You see that as different from what you're seeing at Burson and at the other holding companies?

RE: I think we had the mistaken notion that we were better served to have a main brand and then a lot of small brands in specialist areas, but what people really wanted to buy was Edelman. They want Edelman to be dimensional as opposed to us trying to compete as a bunch of boutiques. That was our lesson out of this, that we should just be able to bring the best of all of Edelman to client assignments, whether it's employee engagement or financial or crisis or digital.

PH: I mean that makes sense to me in that there are no one-dimensional problems anymore?

RE: The ability to bring all that together is the core strength of our business. Brands and public affairs, for instance. It's not something you'd have thought of two or three years ago, but all of a sudden it's quite interconnected. And that's a positive for us. The more complicated the issue, the better we should do.

The other thing that's huge advantage for us is we're in 60 cities. We're keeping our global network intact because we want to be able to be everywhere.

PH: So I think I know the answer to this question, but you're bullish despite everything on the future of public relations and the future of Edelman?

RE: I'm completely bullish. I think AI is a great enhancer of our abilities. It's going to make us able to create content as fast and even better than the ad agencies because people don't want 30 second spots. They want things that they have some input to and feel they're part of.

I also believe that counseling on political matters or socioeconomic matters will be more important. And lastly, that the best PR is based on actions. That's how PR people think. How can we change the game? How can we fix things? How can we make it better? We're not here to just entertain you or grab your attention. We're kind of a more serious partner, and I like that, and I think it's our key advantage. Yeah.

For me, we've been at our best when we've been solving big problems.

PH:  Thank you, Richard. That's a great way to kick off a series.