Edelman bested the rest in 2005

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Wal-Mart's war room. The rollout of General Electric's new environmentally friendly corporate positioning. The launch of Microsoft's Xbox 360. Dove's "Campaign for Real Beauty." The ouster of Morgan Stanley's CEO. The rise of word-of-mouth marketing.

All of these would lead just about any top-10 business news list in 2005 and there was only one agency that played a role in them all: Edelman.

The independent, family-owned network last year displayed an uncanny knack for helping to generate and spread the kind of business and communications ideas that got the chattering classes chattering. That, of course, is just the idea when you're a big PR agency, but it's something that many of its rivals-still focused on the commodity business of ringing reporters, cranking out news releases and arranging petit fours-don't seem to get.

That difference translated into the bottom line. Edelman saw its worldwide revenue grow 14.2% to $254 million. Much of that growth came from Wal-Mart and GE, as well as Shell-its win of the oil giant's retail work is Edelman's largest ever new-business win-Burger King, Trojan, Dr. Scholl's, Polo Ralph Lauren and Fannie Mae.

Especially impressive was the fact that Edelman repeatedly got the call to work out the tough business challenges. For Wal-Mart, as it fended off attacks on its labor policies, the agency created a political-campaign style war room to help defend and burnish the retail goliath's corporate image, an approach that was featured in The New York Times and BusinessWeek.

GE turned to Edelman early in the year when it had to communicate a major new operational and marketing thrust that would focus on environmentally friendly initiatives. The key to getting across the mechanics and motives of the program, Ecomagination, was talking to a wide variety of stakeholders-from politicians and lobbyists to environmental groups.

"Edelman offered terrific counsel," says Peter O'Toole, director-public relations at GE. "They were effective in talking to [non-governmental organizations] and to a broader universe of organizations and environmental bloggers and reaching a new type of influencer."

The new influencers are those distinguished by a willingness to spread positive word-of-mouth among peers, and Edelman is honing its capacity to reach these people. Over the past year or so, the agency has invested heavily in understanding how consumer-created media like blogs are affecting corporate reputation and is trying to incorporate word-of-mouth tactics into its account teams. Worldwide President-CEO Richard Edelman himself keeps a blog.

"These new influentials are not traditional opinion leaders, like doctors and so forth," Mr. Edelman says. "In the Xbox case it's gamers who blog. Having a conversation with them and giving them a sense they're involved in the creation of the brand or product early, before launch, is something we're doing."

Perhaps more than other PR operations, Edelman is making hay of a chaotic marketing scene in which major consumer-facing corporations are reconsidering how they spend their budgets.

The agency now offers as complete a vision as there is of how a public relations firm can play a vital role in crafting marketing strategy rather than just trailing it with news releases and media stunts.

"Public relations is at the table in a marketing sense at the outset, when people are thinking about ideas they should use to drive a campaign or an idea," says Pam Talbot, president-CEO of Edelman U.S.

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