- The biggest public relations agencies are facing new competition from established and upstart firms.
- They vary by model and service, and several are acquiring competitors to grow and add services.
- Insider identified nine to watch, based on factors like recent growth, acquisitions, and account wins.
- See more stories on Insider’s business page.
The public relations industry is dominated by giant agencies, but nimble competitors are rising up to challenge them.
The four largest public relations firms — FleishmanHillard, Edelman, Weber Shandwick, BCW — use their scale advantage to roll out global campaigns, while their vast resources ensures they can shovel money into building out growing areas, said Art Stevens, managing partner at Stevens Group, a mergers and acquisitions consulting firm.
Despite these advantages, small players are giving the Goliaths a run for their money.
“New agencies spring up every day led by aggressive, ambitious and farsighted PR professionals,” Stevens said.
These challengers vary by size, industry, and services, but they all offer an alternative to the sprawling giants and their nimble size allows them to divert their money quickly.
Some have been around for decades and established themselves in a niche space; others, mere months. A couple have sold off stakes to private equity firms. A couple, like S4 Capital, which acquired Low Earth Orbit, have only started branching out into PR.
Insider identified nine companies, listed in alphabetical order, as potential challengers to the biggest PR agencies, based on their financial performance, acquisitions, and high-profile account wins.
Although Avenir is about a tenth of the size of the world’s largest agency holding company WPP, it’s setting up as a challenger by acquiring new agencies over the past couple years.
In 2018, it acquired Padilla, known for its PR work with food and healthcare businesses and clients like Cargill and Mayo Clinic. In 2019, it acquired healthcare PR consultancy Hanover, one of the largest independent UK firms.
Ralph Sutton, international managing partner at Avenir, said it’s focusing on its strongest niches — healthcare, food, tech, and energy.
“Our brands have significant business with some of the largest companies in those sectors and regularly compete with the large networks,” Sutton said.
Its agencies include National, Shift, Axon, Madano, and Cherry and have different services that range from insights and analytics to creative to financial communications. For example, Shift is a tech-focused firm and works for clients like Citrix and RetailMeNot, while Axon specializes in healthcare.
Avenir is a private company that operates in seven countries: Canada, the US, UK, Belgium, Denmark, Ireland, and the United Arab Emirates.
Pay attention to Enero’s flagship agency Hotwire as it expands its footprint and services.
Enero is divesting some of its assets to invest in Hotwire. In March, Enero sold its stake in a small PR firm called Frank to acquire companies that can add creative, data analytics, and technology capabilities. That’s how Hotwire acquired B2B sales and marketing agency McDonald Butler Associates.
Hotwire is rooted in B2B tech PR, and represents clients like Adobe, Citrix, and eBay, but it’s also building out a portfolio of consumer clients like GoPro, Targys, and OKCupid.
“We don’t view our model the same as a traditional holding company model where it’s about adding additional brands to grow,” said Barbara Bates, Hotwire’s global CEO. “The investment is more about continually transforming the offering to be the most progressive, global and creative that it can be.”
Hotwire’s parent, Australia-based holding company Enero, is heavily relying on Hotwire to take market share.
Hotwire’s global revenue in 2020 was $41.7 million in global annual revenue, up about 2% year-over-year.
Its Australia-based parent company Enero’s 2020 revenue was about $104 million, up about 4%.
Enero’s business is divided into creative and content; data, analytics, digital, and technology; and PR. Its other PR firm, CPR, mostly operates in Australia and works on crisis and government and media relations for clients like Google, Headspace, and Samsung.
Enero has 600 employees and 14 offices globally.
Havas PR Global Collective
Havas is smaller than the big five holding companies — WPP, Omnicom, Publicis Groupe, Interpublic Group, and Dentsu.
But M&A consultant Stevens is convinced it’s well positioned to take on the larger players with the size and global presence of its PR network, Havas PR Global Collective, which recorded about $220 million annual revenue in 2020.
In recent years, the Havas PR Global Collective created Red Havas, which has absorbed its Middle East operations, merged its healthcare agencies, and launched a new division, and now operates in 11 countries.
“We are focusing on the areas we have particular specialisms in and where we are seeing significant growth,” said James Wright, global CEO of Red Havas and global chairman of Havas PR Global Collective. “Healthcare is a good example; social, content, data, tech and B2B are others. Healthcare is an area we have seen significant growth in over the past two years and we expect that to continue strongly in the next years.”
The company is also investing in growing areas like its content, social, and data and analytics teams, Wright said. Its biggest PR clients include Novartis, AmEx, Toyota, and Nestle.
“We are also increasingly partnering with our Vivendi sister businesses at the likes of Universal Music Group and Gameloft to benefit our clients,” Wright said.
Havas’ PR unit saw growth in healthcare, technology, and B2B sectors, and it’s looking to acquire more agencies, Wright said. The company’s other networks and brands include: AMO, a network that specializes in financial and public affairs; healthcare-focused Havas Formula; One Bean, which is active in the UK and Australia, and Havas PR.
The Initiative Group
Senior executive exoduses and massive turnover have roiled the Hollywood PR landscape in recent years. But The Initiative Group, composed of publicists from the defunct BWR, stands to gain from this disruption.
Launched in May 2020, The Initiative Group represents brands like Beaches and Sandals Resorts and IdolRoc Entertainment, as well as A-list celebrities like Adam Sandler and Zoe Saldana — a part of the business boosted by the proliferation of streaming services.
The Initiative Group is also helping its celebrity clients push their careers forward by developing ideas for projects and serving as producers, said partner Alex Spieller.
“We just wrapped production on a new Netflix documentary series [featuring client Colton Underwood] and have two other docu-reality focused projects with clients in development,” Spieller said.
One of the firm’s fastest growing areas is crisis management, due to the rise of cancel culture, said Spieller. Celebrities and movie studios have asked Spieller to tamp down controversies and spot potential ones before they come to light.
Led by former Bill and Hillary Clinton adviser Mark Penn, MDC is poised to become one of the top 10 holding companies globally once it completes its planned merger with Stagwell, which will make it one of the world’s most important PR players.
The as-yet named entity will offer PR services that span public affairs, corporate reputation, and consumer marketing. Its portfolio will include clients like Toyota, Diageo, AB In Bev, and Samsung.
These PR agencies include midsize agencies from MDC like Allison + Partners, focused on tech and corporate communications; and consumer marketing firm Hunter. Stagwell brings political consultancy SKDKnickerbocker and financial communications firm Sloane & Co.
Trade publication O’Dwyer’s reported the PR unit, once merged, will represent about $320 million annual revenue, or about 16% of the combined entity’s overall annual revenue.
Like the other large holding companies, MDC declined in 2020 due to the pandemic, with revenue decreasing 15.3% year-over-year to $1.42 billion. However, the company said its PR business grew as companies sought help responding to the pandemic and social issues.
It also released its proprietary tech platform PRophet, which helps PR pros predict which journalists will cover their pitches.
Mixing Board overhauls the traditional PR business model with a platform of more than 100 top chief communications and marketing officers who provide freelance services ranging from workshops to crisis management.
Its heavy-hitter members include former Dunkin’ CMO Tony Weisman and Laura Anderson, former chief communications officer at Intel.
Sean Garrett, a former head of communications at Twitter, launched Mixing Board in January 2021 after he shut down his last venture, Pramana Collective.
While several other PR companies aspire to be the “Uber of PR,” few can match Mixing Board’s top talent.
Garrett said Mixing Board has worked with “several start-ups of varying size, a big foundation, a global consumer brand” and done workshops, sprints and recruiting work for a few high-profile senior comms roles, but declined to name specifics.
20-year-old Real Chemistry has grown significantly in recent years and is trying to expand beyond its core business serving biopharma clients like Astellas and Takeda.
Formerly known as W2O Group, Real Chemistry rebranded in 2021 to reflect its plans, adding clinical trial design and health economics services after acquiring a slew of new companies like Swoop and IPM.ai.
In 2020, Real Chemistry’s global revenue grew 50% year over year to $360 million and it anticipates crossing the $400-million revenue mark in 2021.
CEO Jim Weiss previously told Insider that the company wants to take market share in health-related sectors like hospital and medical technology. It recently won accounts for medical devices company Nevro, pediatric behavioral health company Cognoa, and biopharma company Apellis Pharmaceuticals.
Real Chemistry took on two private equity investments. In 2016, it sold a stake to Mountaingate Capital, and again in 2019 to New Mountain Capital, and used the proceeds to acquire more companies.
“Healthcare is in the midst of a radical transformation – with consumerization, personalization and digitization driving new patient and provider behaviors – while the cost and time to deliver new drugs and technologies to market continues to grow,” Weiss said.
Real Chemistry has acquired 12 companies since it started and is angling to compete with consultancies like Accenture and Cognizant.
TrailRunner International is a corporate reputation specialist that in 2020 doubled its headcount to 75 people, increased its annual revenue by 75% year-over-year, and grew its net income by 191% year-over-year — all during a pandemic.
TrailRunner launched in 2016 with Alibaba as its anchor client — its chairman and CEO, Jim Wilkinson, ran Alibaba’s corporate affairs division for two years. Since then, the firm has expanded in China, in part by acquiring a media and marketing agency called Dragon to build its Shanghai footprint.
TrailRunner, which moved its headquarters from Truckee, California to Dallas/Fort Worth, Texas, is looking to open a seventh location, in Nashville. Other clients in addition to Alibaba include the Dallas Cowboys and Bain Capital. It also has provided financial communications help on IPOs like DropBox, Spotify, and Levi’s.
TrailRunner has attracted talent like Kelly Wallace, a former CNN correspondent, who leads the firm’s New York operations, as well as part-time advisers like former Florida Governor Jeb Bush and Thomas McLarty III, who is the chairman of international strategic advisory McLarty Associates.
Vested’s revenue has grown by double digits since being founded in 2015 by doing PR work for financial heavyweights like Morgan Stanley, SEI, and Grayscale Investments.
Its 2020 revenue grew by more than 18% year-over-year to $12.4 million. More recently, it won business from Aon, MSCI, and EY Financial Services.
Fueled by that success, president Binna Kim said Vested is in talks to acquire agencies to enter new markets. It previously made a minority investment in Caliber Corporate Advisers that acts as a conflict shop and acquired content studio Scribe.
Kim and CEO Dan Simon co-founded Vested after leaving Cognito in 2015 to bring an approach that integrated marketing, PR, social media, and owned media.
“We saw the clear need for an agency that could bring together integrated marcomms, a financial focus, and an entrepreneurial approach,” Kim said. “Financial services is complex and ever changing. To tell great stories and build financial brands, we need to really understand the business of finance.”
The agency now has 75 employees, working across reputation management, media relations, advertising, social media, brand development, lead gen campaigns and more.
Vested offers perks like profit sharing programs and paid three-month sabbaticals after serving for four years, Kim said.
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