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Burson-Marsteller

Report by Mark Penn

Worldwide chief executive officer

During 2007, Burson-Marsteller continued to make significant progress towards our long-term strategic goals while at the same time driving strong short-term financial results. Our success was driven by our focus on executing our DIGS strategy for the second consecutive year, which has been re-shaping Burson-Marsteller into a firm that is more Digital, Integrated, Global and Strategic.

Our increasing digital capabilities continued to shine in 2007. We named a chief digital strategist and launched new digital programs for key clients, including corporate websites for Hormel and Kraft. We led the digital launch of the redesigned $5 note on behalf of the U.S. Treasury's Bureau of Engraving and Printing. We won several awards for an innovative program conducted in the online virtual world of Second Life by our Latin American tourism practice on behalf of the Mexico Tourism Board.

Our dedication to integration allowed us to offer clients an unrivaled mix of services and strategies. For instance, when we led the communications during one of the largest private equity buyouts in history in mid-2007, we saw significant contributions from a research team at Penn, Schoen & Berland, a creative team from our advertising unit Marsteller and our grassroots outreach unit, Direct Impact.

The Key Client Relationship (KCR) program has been a great success. The program provides clients with a single point of global accountability and a commitment to deliver the best Burson-Marsteller has to offer across geographies and practices. In 2007, we also developed an offshoot, the Growth Client Relationship (GCR) program, targeted to smaller client engagements that have the potential to grow into KCR clients.

We believe the firm and our client programs are now more dedicated to strategy and research than at any prior point in its history. A significant and growing part of our business is helping address strategic business challenges and opportunities by taking an evidence-based approach to communication, which we believe is a significant differentiator for Burson-Marsteller.

For the second consecutive year, our revenue and profit grew while our profit margin improved, with a particularly significant contribution from Europe.

We added a number of blue-chip clients during the year including Sony Ericsson, Telefonica and Comcast. We also bolstered our senior ranks with the addition of Richard C. Powell Jr as our COO and the elevations of Simon Pangrazio to CEO, Asia Pacific and Jeremy Galbraith as CEO, EMEA.

In 2008, we have identified three core areas where we believe the DIGS strategy will continue to drive growth:

  • First, the rapid expansion of our digital communications offering and the growth of digital training for all our people remains a key priority.
  • Secondly, we want to grow what is already one of the industry's premier corporate crisis and issues management capabilities by integrating this offering across geographies and clients.
  • Lastly, we see enormous potential to expand our expertise in positioning clients around corporate social responsibility issues, including in the area of sustainability. This is emerging as the strategic corporate reputation challenge of the decade. Using evidence-based communications techniques, we intend to be the dominant player in all of these spaces as we drive DIGS forward.