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Street Talk: Lobby Shop Ogilvy Now Faces Uncertain Future

Since last week’s departures, Ogilvy installed Chris Giblin as its new CEO to replace Drew Maloney, who left for the Republican National Committee. Gordon Taylor remains president, and Moses Mercado continues as chairman, though he had shared that title with Berman.

“Quite frankly, as big as producers that are leaving, they eat out of the profits of the firm also,” Taylor said. “Would anyone want those guys to leave? Absolutely not. But them leaving doesn’t mean that there is not a path forward. Will Ogilvy have to decide if they want to invest in attracting more talent to the firm? Absolutely. But we’ve got a core group of people that are staying for the moment. If those people stay, including myself, we’ve got a great book of business with great clients, and there’s potential for a great next phase.”

Some lobbyists, noting the Ogilvy departures probably are not over yet, have speculated that WPP could merge the remaining Ogilvy lobbyists into another of its firms. It’s been done before, when the former Timmons and Co. and BKSH shops blended into Prime Policy Group.

One contender in the past was QGA. But when asked whether he was considering a merger between Ogilvy or any of WPP’s K Street shops, Sorrell said “no.”

For a firm whose roots are in a GOP business, Ogilvy now has more Democrats than Republicans. Like Ogilvy, QGA could be in the market for Republicans, so the two might not be a good fit.

In any event, QGA chief Jack Quinn said his firm is looking for new hires.

“We want to let the dust settle a little bit in terms of having a better sense of who the players will be and what the issues will be in 2013 before we make any firm [hiring] decisions,” Quinn said.

His firm, too, has lost many of its original lobbyists — including former Republican name partner Ed Gillespie — and has seen its revenue decline. But Quinn notes that his firm has remained profitable.

Losing revenue seems pervasive among many of the corporate-owned firms, including WPP’s holdings. Cassidy & Associates, which sold out to Interpublic Group of Companies more than a decade ago, has lost its long-held position as the No. 1 firm in lobby revenue.

And some of the firms with the most buzz on K Street are independent, such as Podesta’s and Mehlman Vogel Castagnetti and McBee Strategic. The entire industry, worth at least $3.5 billion annually, has dipped slightly with the economic downturn — though Ogilvy Government Relations actually rose by 14 percent between 2010 and 2011.

Some lobbyists argue that the holding companies, looking to squeeze all the profits they can from K Street shops, have put those firms at a disadvantage from their more nimble independent peers.

But Quinn said there’s another side.

“It’s entirely possible that being owned by a $15 billion dollar holding company is a good thing because they can provide a buffer against the economic winds,” he said.

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