Nine of the top 10 firms ranked by O’Dwyer’s for financial PR and investor relations charted growth in finance-related fees last year. In total, the top 10 firms accounted for $377 million in net fees in 2022, an $86 million leap from their performance in 2021 and more than three times the $25 million in total gains the top ten firms charted between 2021 and 2020. The numbers alone paint the picture of a communications landscape moving into uncharted territory.
Unfortunately, 2023 hasn’t kicked off without a few stumbling blocks. Stubborn inflation, never-ending stock-market woes and ongoing banking-sector turmoil in the wake of the Silicon Valley Bank collapse, which was the second-largest bank failure in United States history as well as the largest since the ’08 financial crisis, all threaten to derail financial PR firms’ momentum just as they were shifting into post-COVID plans for growth.
We asked executives at some of the top-ranked firms meeting the communications needs of financially-focused companies what they attribute to their success last year and what trends, changes and challenges they see on the horizon, as we move into what’s shaping up to become an economically uncertain year.
Prosek picks up PE, special-situations business
One of the strongest gainers in O’Dwyer’s financial/IR rankings this year came from Prosek Partners, which pulled in more than $76.8 million in finance-related net fees in 2022 to reveal earnings nearly $7 million higher than 2021’s $70 million. The New York-based financial communications shop, which was founded in 1990, holds the number-three spot in O’Dwyer’s financial rankings.
Prosek’s performance in 2022 signaled a continued trajectory of growth for the firm, as the agency’s 2021 earnings boasted gargantuan 30 percent gains of 30 percent from the year prior.
Founder and Managing Partner Jen Prosek attributed the agency’s success to a financial services sector that remains healthy and dynamic as well as an ongoing evolution in what she referred to as the “emerging market of marketing.”
“Private-markets firms within the financial services world now understand the power of brand and are investing in communications, marketing, branding and digital like never before,” Prosek told O’Dwyer’s.
Prosek said the special-situations work generated from these same firms and their portfolio companies has also increased.
Looking to the future, Prosek expects the finance sector will continue to invest in “offense” brand building, as leaders in the financial services sector now believe in—and compete on—branding. And communications agencies servicing the financial services world stand to see budgets increase as a result.
Prosek also believes fundraising for private markets firms will grow increasingly competitive, and U.S. firms will find themselves competing for capital both inside and outside of the country. She also expects that large corporate financial institutions will likely experience layoffs and will require capable communications teams to handle these shakeups.
“Increased volatility in the economy will create more special situations work (e.g., restructuring, crisis communications, etc.), so firms with strong strategic corporate comms., investor relations and special situations capabilities will experience growth,” Prosek said. “Employees, culture and talent will continue to be a top concern, and firms will continue to invest in these areas.
Vested benefits from unique value proposition
Financial services specialists Vested took in nearly $24 million in finance-related net fees last year, accounting for gains of more than $6 million from 2021’s $17.5 million. The firm, which is focused exclusively on the financial services industry, now takes the number-four spot in O’Dwyer’s financial rankings this year, up from number five last year.
Vested Group CEO Binna Kim attributed the firm’s impressive year to a continued signing of marquee financial brands across asset management, banking, capital markets and fintech sectors for whom the agency led strategic programs in areas such as corporate communications, branding, advertising, digital marketing and content.
“Financial brands are increasingly demanding the specialist knowledge, integrated expertise and creativity that Vested is uniquely positioned to provide,” Kim told O’Dwyer’s. “At a time when financial brands are navigating a difficult economy, this comprehensive value proposition has proven invaluable.”
Kim said the financial sector currently finds itself under enormous economic pressure, and this has put PR and marketing activities under increased scrutiny as a result. Financial marcomms leaders are being asked to defend investments and strategies and to use data to prove performance more than ever. This has placed increased pressure on communicators working in the finance world to provide performance marketing and integrated measurement. At the same time, however, financial brands are also striving to portray themselves as more human.
“The aftermath of Silicon Valley Bank and the banking crisis proves yet again that consumers distrust the financial system,” Kim said. “As such, several finance brands are undergoing or will be moving to develop fresh brand narratives that simplify and humanize their stories. Finance needs to get more understandable and financial comms. professionals are already working to find new ways to articulate value propositions in ways that engage and earn trust.”
Finn Partners fords new financial frontiers
Finn Partners accounted for $15.6 million in finance-related net fees last year, an impressive jump from 2021’s $11.7 million. The independent PR giant now moves into the number-six spot in O’Dwyer’s financial rankings, up from number seven in 2022.
Global Financial Services Practice Leader Ryan Barr told O’Dwyer’s that the agency last year was fortunate to be selected for several new client engagements while it continued to deepen its existing client relationships by expanding value-added communications solutions beyond traditional earned media and original content development.
Finn Partners in 2022 acquired Vancouver, WA-based purpose-driven shop AHA, which has allowed it to work closer with clients on internal communications and employee engagement issues, which in turn will better enable companies to connect with stakeholders internally and externally.
Given the collapse of SVB, Barr said 2023 has already proven challenging for the financial sector from a communications standpoint. But it has also underscored the need for quality financial communications counsel.
“All regional banks—the backbone of our financial system—had to act quickly to communicate with retail and commercial clients to ensure misinformation and external perceptions did not create a gap with the reality of the actual health of these institutions … not an easy task. What it showed was financial communications experts at agencies and banks are some of the most resilient professionals in the industry,” Barr said. “The lessons learned from the past few months can and should be applied across other industries to ensure companies quickly counter misinformation in the market and ensure external perceptions do not become realities.”
Looking forward, Barr believes 2023 will be the year that the communications world is forced to confront the realities of AI.
“We’ve talked about the impact technological evolution has had on everyone’s life for decades, from work to personal usages. However, the new advancements in AI will change the way everyone works, communications professionals included. AI will never completely take over marketing and communications functions … but there will be areas where AI will speed up the process from initial research and analytics to creative ideation. Marketing and Communications agencies will need to embrace change just like any other industry … they just can’t surrender to the AI challenge as it can never be a substitute for human interactions.”
Stanton diversifies financial client roster
Stanton continued the strong momentum the agency exhibited in 2021 with another solid year in 2022, bringing in more than $10.4 million in finance-related net fees last year and tallying gains of nearly $2 million from 2021’s $8.5 million, which revealed a similar leap from the $7.6 million the agency charted in COVID 2020. Stanton now assumes the number-nine spot in O’Dwyer’s financial/IR rankings, up from 10 last year.
Managing Director Tom Faust attributed the agency’s success to a series of partnerships with new and diverse financial clients, including middle-market private-investment firms, credit managers, multi-billion asset managers, real estate investment firms and impact investors.
“We found that in 2022 many firms made the shift into post-COVID plans for growth, which extended to a renewed focus on communications,” Faust said. “We also saw financial clients having growing interest in our creative services such as marketing collateral creation, web design and strategic social media. That trend has continued in 2023.”
Faust said the recent spate of recent bank closures that have made headlines in 2023 currently looms large across the financial services landscape, particularly in the worlds of banking and private investment. This isn’t going away anytime soon, and Faust said these developments present both a challenge as well as opportunities for firms specializing in financial PR and investor relations.
“We’ll all be dealing with communications needs stemming from the fallout for a while, as financial organizations address new concerns from depositors, investors and regulators,” Faust said. “And in a world of higher interest rates and equity market challenges, there is renewed investor interest in credit strategies.”
Read the article at O’Dwyer’s.