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Edelman Is No. 7 on the Ad Age Agency A-List

As Others Seek More Authentic Communication, Agency Keeps a Broadened Competitive Set at Bay by Always Approaching From the Conversation Side

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NEW YORK (AdAge.com) -- The frenzy over the social-media sphere has created a debate over who should "own" the space -- digital shops, traditional shops or the marketer itself. Ironically, what tends to get lost in the noise over tools and ownership is the focus on conversation. But it's just that focus that has put PR giant Edelman in the center of the action.

Edelman's competitive set has been broadened as companies seek a more digitally based, authentic, two-way conversational approach to marketing. So much so in fact that it wasn't unusual last year for an exec at a creative or digital shop to say they were concerned about losing business to Edelman because of its capabilities and approach.

Richard Edelman, president-CEO of the eponymous firm, recalled a chat with the CEO of a digital shop who told him, "Digital guys come at it with tools and creative guys bring the big ideas, but you guys approach it from the conversation side of things and we're nervous about you."

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President-CEO Richard Edelman on how his shop is a 'threat' to creative and digital agencies.

"Marketing is more about the conversation now," Mr. Edelman said. "These other types of agencies will eventually set up units to do the things we do, but the question is, can they morph their mentality? We come at it differently and push the consumer experience and two-way discussion," he said. "We've never had big budgets and we do flip-cam renditions of life as opposed to Ridley Scott shooting something on 35 mm. Our work is more true-to-life and therefore more conversational with a better chance to go viral."

Edelman pegged its 2010 global revenue at $531 million, which would make it the biggest PR shop on the planet. (According to Ad Age's DataCenter, the company was ranked No. 1 globally in 2009, with $440 million in global revenue.) U.S. revenue was up nearly 19% to $348 million in 2010 with 10% of the total driven by digital. The agency now has 53 offices and 3,600 employees straddling the globe.

Last year Edelman added several enviable new clients to its roster, including Best Buy, Campbell Soup, General Motors, Harley-Davidson, Bank of America, Newell Rubbermaid, Levi's and United Airlines. And how's this for a track record? In the past two years, Edelman says it has only lost one of its top 50 clients, Nissan, which held a competitive pitch back in 2008.

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For Unilever's Ben & Jerry 's the agency created the Scoop of Happiness augmented-reality app, which gave consumers a look at where the ingredients come from, and for Pepsi it managed parts of its Pepsi Refresh Project.

David Hufford, senior director-communications for Xbox, said Edelman works with Xbox across 30 countries and that the agency has mastered what it means to be a worldwide PR agency for a client. Edelman in 2010 was behind one of the biggest -- and most successful -- launches in Microsoft's history, the Kinect for Xbox 360.

"This was a year of massive audience expansion for our brand and we needed to work with their global experts on how to reach families around the world and transform the way people think about our brand," Mr. Hufford said. "That's what they are great at, whenever we need to enter new categories they have been masterful at giving us a new tone to our voice."

To ensure clients keep getting that sort of service, the agency loaded up on big-name talent last year: Mark Hass, president of Edelman China; Michael Slaby, global head of digital; Steve Schmidt, vice chairman of public affairs; "mother of cause marketing" Carol Cone; and Richard Sambrook, chief content officer.

That last hire is linked to Mr. Edelman's long-held belief that every marketer is itself a media company and should be creating its own content. He views owned media as a huge opportunity for marketers, and last year convinced computer giant Hewlett-Packard to spend more time building blogs and video content.

"Focusing on content creation, influencer relations, social media and establishing a digital presence was a big area of investment for us," said Marlene Somsak, director-worldwide media relations for the Personal Systems Group at HP. "Edelman has not only evolved with us in a very dynamic industry but has driven a lot of new initiatives including direct customer engagement."

The agency is also taking the whole "digital ninja" thing really seriously. Almost 18 months ago the agency instituted a karate-style "belt system" to measure employee knowledge of digital and social media.

Another new initiative in 2010 was the launch of Ruth, a brand integration boutique designed to serve as a one-stop for clients. The unit can produce and manage all aspects of a client's marketing plan with the exception of media buying. It has produced direct-mail efforts, TV and radio spots, outdoor executions, print ads, consumer brochures, pop-up stores and assisted in the development of media plans.

"We're proving that a PR firm executing and thinking in the most expansive way belongs at the table with digital firms and creative agencies," Mr. Edelman said. "We have structured ourselves for the future."

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