THE TOP EUROPEAN PR CONSULTANCIES 2000: SWEDEN - Despite two spectacular agency failures, the outlook for Swedish PR looks strong

Last year was a turbulent one for the Swedish PR market. On the one hand a fast growing economy meant PR business boomed. On the other, the industry was rocked by scandal and the demise of two of the country’s top five PR brands. Last summer, Lexivision went under after its financial backer, printing group Graphium, pulled its support. The subsequent fall from grace of Rikta Kommunications -ranked third in last year’s league table - stunned the communications industry and caused uncomfortable ripples.

Last year was a turbulent one for the Swedish PR market. On the one

hand a fast growing economy meant PR business boomed. On the other, the

industry was rocked by scandal and the demise of two of the country’s

top five PR brands. Last summer, Lexivision went under after its

financial backer, printing group Graphium, pulled its support. The

subsequent fall from grace of Rikta Kommunications -ranked third in last

year’s league table - stunned the communications industry and caused

uncomfortable ripples.



’It was a fantastic company, and the sudden huge scandal was a real

cultural shock,’ says Henry Rawet, managing director of GCI Rinfo. Last

spring, Rikta was hired to publicise the November visit to South Africa

of Swedish prime minister Goran Persson and 700 Swedish business

leaders. Unfortunately, the agency extended its PR responsibilities to

include sub-contracting a programme of events, some of which failed

spectacularly. Nonetheless, the company’s 70 former staff have all found

new jobs, some absorbed into rival PR agencies and others following

their clients in-house. In addition, two new consultancies have sprung

from Rikta’s ashes: Spider Communications and Tattoo. Founder Peter

Erikson has set up a business development and strategic communications

consultancy named Erikson Outlook.



This disaster aside, the majority of the PR industry enjoyed a

comfortable 1999 in a buoyant economy. Kaj Flick, secretary general of

Swedish PR association Precis, says the average rise in fee income over

the past four years has been around 25 per cent. ’Joining the EU created

a lot of opportunities,’ says Peter Forssman, chairman of Precis and

independent agency Gullers Grupp. Last year, the country decided against

joining the EMU because of popular opposition. However, in recent months

a virtual unanimity has been reached between the parliamentary parties

that the issue of EMU entry should be submitted to a referendum. But

with doubts surrounding the appropriate timing of such an exercise, the

euro remains a political, rather than a business issue and economic

momentum has been sustained.



For the PR industry, the downside of this buoyant market is the shortage

of high calibre staff. ’Recruiting senior people with enough experience

is a problem for everybody,’ says Larserik Johansson, managing director

of Johansson and Co.



The current economic boom does play to all the strengths of the Nordic

market. Home to global telecoms operators such as Ericsson and Nokia,

both Sweden and Finland have emerged as world leaders in some IT fields,

such as the convergence of the internet and WAP technology. E-commerce

is widely established in the region. According to a recent study by the

Boston Consulting Group, on-line revenue as a share of total retail

revenue in Sweden is the second highest in the world after the US.

According to Kjell Hjell, managing director of IT and telecoms

specialist Segerfeldt and Partners, this is largely due to Sweden’s

early adoption of a competitive telecoms market. ’Penetration of mobiles

and the internet is much higher here than in Germany, for example,

because we deregulated telecoms five years earlier,’ he says.



Like the rest of Europe, the entire Swedish PR market is benefiting from

the dot.com boom. The larger agencies in Sweden are embracing the new

economy and on-line world in a holistic fashion, as opposed to the UK

trend of setting up separate new media or digital divisions.’We have not

created a specific dot.com division because the role of internet

communications has become an integrated part of what we do,’ says Peje

Emilsson, CEO and owner of the Kreab Group, which opened its London

office, headed by John Brill, last year.For many Swedish operators, the

nature of PR is changing from simple media relations. ’Communication

professionals are increasingly becoming advisers to top management,’

says Emilsson.



Bo Jansson, partner of JKL, agrees there has been growth in strategic

communications work, ’but everybody is trying to move into other

areas’.



Indeed, CARTA Communications considers that it has left the PR market

altogether. Acquired by Booz, Allen and Hamilton in 1999, last year’s

number nine now brands itself as a management consultancy.



While Stockholm remains an industrial stronghold and the largest

national PR market, there is significant development in the Malmo area.

The Malmo and Copenhagen bridge, which opened in July, will span the

Baltic to link Sweden and Denmark. This means the large Stockholm-based

players are opening regional offices to service companies which have set

up local operations.



Many of the state and community-owned companies in Sweden, which cut

costs in the early-1990s by slashing communication staff, are

reinvesting.



In recent years there have been a lot of mergers and acquisisions among

traditional Nordic companies in areas such as banking and insurance. And

financial services and IR is a sector that continues to grow rapidly,

especially around IPOs in the IT and telecoms area. Between 50 and 70

companies are planning to float on the Stockholm stock exchange this

year, with the privatisation of 49 per cent of state-owned telecom

operator Telia the most eagerly awaited as the biggest IPO in Sweden’s

history.





- Swedish trade association Precis has 41 members. Member agencies must

have been operating for at least two years and the majority of their

work must be consultancy, rather than events management or other

functions.





EURO CONSULTANCIES - Sweden


Rank Company/Status                Fee income (pounds) Growth   Location

99                                      99          98      %

1    Kreab*/                     7,860,000   6,703,587     17  Stockholm

     Kreab Group

2    Journalistgruppen*=/        4,875,000   2,635,135     85  Stockholm

     Independent

3    JKL */                      4,668,000   3,774,292     24  Stockholm

     JKL Group

4    Wildell Gruppen*=/          3,592,105   3,265,550     10  Stockholm

     F-H member

5    GCI Rinfo*/                 3,380,622   2,377,578     42  Stockholm

     GCI Group subsidiary

6    Gramma */                   2,400,268   1,930,132     24  Stockholm

     CDR affiliate

7    Effektiva Media*/           1,976,233   1,356,690     46  Stockholm

     Independent

8    Jerry Bergstrom*/           1,809,000   2,203,409    -18  Stockholm

     Independent

9    Andreasson*/                1,800,000   1,426,906     26  Stockholm

     Inter PR member

10   PPC Media/                  1,780,000   1,382,661     29  Stockholm

     Embrace member

11   Hallvarsson & Halvarsson*=/ 1,776,316   1,160,991     53  Stockholm

     Independent

12   Hill & Knowlton Sweden*/    1,616,069   1,138,754     42  Stockholm

     H&K subsidiary

13   Burson-Marsteller/          1,478,000   2,521,614    -41  Stockholm

     B-M subsidiary

14   Gullers Grupp*/             1,240,000     926,756     34  Stockholm

     Independent

15   n3prenor=*/                 1,197,368     873,992     37  Stockholm

     Independent

16   Vox PR*=/                   1,197,368   1,151,316      4  Stockholm

     Pinnacle member

17   Johansson and Co*/            852,380     855,520      0  Stockholm

     IPR affiliate

18   Segerfeldt and Partners*/     848,000     680,717     25  Stockholm

     Brodeur member

19   Svenska PR-Byran*             605,381     710,015    -15  Stockholm

     PNI subsidiary

20   Rita Platzer PR*/             538,600     445,821     21  Stockholm

     ECCO member

21   Florman PR and Comm*/         523,206     301,535     74  Stockholm

     Fireworks member

22   PiRho Ogilvy PR*/             486,000     359,103     35  Stockholm

     Ogilvy subsidiary

23   KAN Kommunikations*/          411,000     404,843      2  Stockholm

     Independent

24   Text 100*/                    378,648     199,999     89  Stockholm

     Text 100 subsidiary

25   Dahl and Co PR*/              360,000     269,000     34      Malmo

     Independent


All figures relate to the year ended 31 December 1999.

Fee income= PR fees only

*Denotes Precis member

= Figures independently audited and supplied by Precis.



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