News
From PR Week: Instinctif Partners’ Global Agency Business Report 2016
News
PR Week met with our CEO Richard Nichols for a chat about where we were in the last year, and where we plan to go.
See the original article, featured in PR Week here.
——-
“We’re starting to see differential rates of growth in different territories and in different practices,” says CEO Richard Nichols.
The UK, which accounts for almost three-quarters of revenue at the London-based agency (formerly known as College Group), was among the stronger performers, with revenue growing three per cent to £25.3m.
However, Nichols suggests the picture is less straightforward as the agency’s focus evolves both geographically and from a practice area standpoint. For example, on paper, US revenue surged 24 per cent to just over $1m, although he admits this uplift is probably flattered because some of that work is handled in the UK.
Nevertheless, America’s growth was significant, albeit from a small base, and the country is a key focus. “Our single largest relationship at the moment is with eBay, so the US has been quite marked for us in terms of our growth into North America. We’ve established a New York office, we’ve established a San Francisco office, and since the beginning of this year we’ve made a couple of quite significant hires in to build that out.”
The eBay relationship “talks to one of the great trends we’re seeing across our six practice areas”, Nichols says: the rise of engagement and internal comms. Internal comms grew from 7.3 per cent to 8.8 per cent of revenue in 2015.
Instinctif handled the #WeAreEbay campaign in 2015 to help the company “rearticulate its vision” following the divestment of PayPal. Internal comms was the focus: “We sought to do that from a campaign that led from the inside out rather than broadcast to the outside world.”
Linked to the eBay activity, digital and social media were also among the fastest growing practice areas, say Nichols.
Revenue in the public affairs and public policy business, however, was a notable down point, falling 11 per cent to £3.2m in 2015. Nichols describes that as a “very competitive space”, although he cautions against “over-analysing it”: “As we grow we are likely to see some areas and some territories in some years grow quicker than others. For us, the story was engagement in America and Africa, and less last year a public affairs story.”
Revenue in the latter region rose 9.2 per cent to top $2m, buoyed by work such as the sale of Virgin Active and activities with Clover and Morgan Stanley. Elsewhere, revenue in Asia Pacific rose by a fraction to $2.1m and Middle East revenue grew by more than one third from a small base to $698,000.
In common with several other agencies, Continental Europe was disappointing. Revenue there fell 16.4 per cent to €5.5m.
Despite the growth in engagement and digital channels, Instinctif’s more traditional corporate and capital markets business held its share of the revenue at just under one quarter. Nichols points to some big IPO wins in 2015, including online estate agent Purple Bricks, Shawbrook Bank, insurance group Hastings, and in Germany, the digital classified group Scout 24, billed as the country’s first €1bn+ flotation.
The agency is also seeing client wins from ‘challenger’ firms such as the snack business Graze and Xeros, the energy-efficient washing machine maker.
2014 saw the acquisition of London-based financial services PR agency Wriglesworth, which added a further 25 employees to its capital markets and corporate affairs practice, including Laura O’Connell, now managing partner of corporate affairs. He highlights other significant hires including former Daily Mail City editor Ben Griffiths as a partner in its capital markets arm, and former Edelman global energy sector chair Rishi Bhattacharya as managing partner in its international corporate affairs practice.
The most significant departure was global corporate affairs chief Tim Fallon. Asked about the impact of his exit, Nichols is bullish: “We continue to grow and we let our numbers and clients speak for themselves.”
Are more acquisitions on the cards? “We just want to attract good people, good businesses and good teams, and we’ve got an eye open to anything. We’re always interested. That said, I think we’ve gone through a period over the past 12 months where our focus has been [on hiring] more senior individuals rather than [acquiring] businesses.”
Nichols does not want to focus on one area specifically for 2016, although overseas growth, particularly in the US, is a clear focus: “We think we’ve got the right mix of services, we think we’ve got the right practice area, we’ve got many of the right people in place, and the business is as stable as it’s ever been. We think 2016 will be quite a big year for us.”
