THE TOP 150 PR CONSULTANCIES 2000: WHO OWNS WHAT - Group interests PR is taking a more prominent role within the auspices of the leading marketing services groups. Juliette Garside looks at the increasing PR fortunes of some of the top players.

OMNICOM

OMNICOM



Within Omnicom’s Diversified Agency Services (DAS) division, the company

owns three international full-service PR brands: Fleishman-Hillard,

Ketchum and Porter Novelli, and four specialist international networks:

financial agency Gavin Anderson, technology specialist Brodeur

Worldwide, public affairs network GPC and internal communications

consultancy Smythe Dorward Lambert. And, thanks to its acquisition of

Abbott Mead Vickers in 1999, Omnicom now owns a further three UK PR

brands: Fishburn Hedges, Freud Communications, and Aurelia PR.



In 1999 Jack Modzelewski arrived from the US to run Fleishman-Hillard’s

European operation from London. In October, F-H bought healthcare shop

CPR. In February this year Paul Blackburn, MD of sister Omnicom agency

Ketchum’s UK healthcare practice, was brought over to head F-H in the

UK. Ketchum’s most significant development of 1999 was the acquisition

of employee communications practice, Sheppard Associates. In November

1999, Omnicom’s international technology brand, Brodeur, detached itself

from Porter Novelli. CEO for Europe for DAS Anthony Wreford explains:

’The business is reaching a level where it can move to being an entity

in its own right.’ In return, the US technology giant Copithorne and

Bellows, already part of the Omnicom group, was placed under the Porter

Novelli umbrella and the Porter Novelli Convergence Group was launched

on 1 January in Europe and the US. In March this year CPN director Neil

Backwith was made CEO, to free founder Peter Hehir to concentrate on his

role as chairman of CPN and Porter Novelli International.



There were big changes, too, at the top of the BBDO Europe PR

brands.



In October 1999 Fishburn Hedges founding directors Dale Fishburn and

Andrew Boys announced their retirements at the end of the year. In

December 1999 Freud founder Matthew Freud completed his five-year earn

out, begun when his business was acquired by AMV.





WPP



WPP is the third largest communications conglomerate. It owns the second

largest global PR agency, Hill and Knowlton, and Ogilvy PR, the ninth

largest. WPP also has a specialist communications division, which

includes, in the UK, financial agency Buchanan Communications and

healthcare specialist Shire Hall Group.



PR accounts for about 16 per cent of WPP’s pounds 2,173 million revenue.

But while advertising revenues saw just over five per cent growth during

1999, PR experienced 30 per cent growth. WPP chief executive Martin

Sorrell believes this is due to increasing specialisation in high growth

areas such as IT, telecommunications, healthcare, financial services,

and entertainment and media. WPP concentrated its buying power in these

areas last year, and Sorrell says we will see more of the same in 2000.

Hill and Knowlton’s revenues rose by 12 per cent in 1999, while

Ogilvy’s, thanks to organic growth and acquisitions, increased by a

staggering 115 per cent. Last year saw Ogilvy being strengthened with

the acquisition of Magellan Medical Communications and financial and

corporate firm Sector PR in London, and in the US, healthcare and

biotech firm Feinstein Kean Partners and Hollywood entertainment shop

Baker/ Winokur/Ryder. Ogilvy’s growth was also boosted by the success of

its technology division, Alexander Ogilvy.



Hill and Knowlton acquired hi-tech specialist Blanc and Otus in February

1999. The agency had revenues of dollars 8 million and its clients

included MCI WorldCom and Adobe. B&O will operate under the name Blanc

and Otus, a Hill and Knowlton Company, and its president and CEO,

Jonelle Birney, remains in her role as well as being named head of H&K’s

global technology practice.



In the spring of last year, H&K found itself at the centre of a

high-profile conflict of interest debate, and had to withdraw from a

lucrative account to support the city of Toronto’s bid to host the 2008

Olympics because it already represented the International Olympic

Committee.





INTERPUBLIC



Interpublic is the world’s largest communications supergroup. It owns

the world’s third largest PR agency, Shandwick International, part of

its International Public Relations group, chaired by Lord

Chadlington.



Interpublic only began investing in PR four years ago, when it acquired

the technology business founded by Larry Weber. With Interpublic’s

backing, Weber has built his agency into the world’s 14th largest

agency, with global fee income of just under dollars 81 million last

year. Weber is known for its technology PR, but its offering has been

strengthened by acquisitions in the government relations and financial

arenas. Weber-McGinn, the Washington DC business, extended its influence

in the capital by negotiating the acquisition of influential government

relations firm Barbour Griffith and Rogers at the end of last year.



Shandwick, meanwhile, leapt from seventh to third place in the US league

tables, thanks to its acquisition of Washington DC public affairs outfit

Cassidy Group, which, merged with Shandwick’s existing operations in the

City, has created its largest public affairs business. Shandwick’s

second string agency, Golin/Harris International, is represented in

London by Paragon. Since Shandwick became part of the Interpublic group,

a question mark has hung over whether the three international brands

would remain separate or be merged. It seems there has now been a

decision. Interpublic will put its considerable resources behind making

Shandwick the biggest brand worldwide to knock Burson-Marsteller off the

top spot. Golin/Harris will be developed as a medium-sized agency, with

offices in the major markets, including the UK, Japan, Germany and the

US. And Weber will concentrate on technology, public affairs and

financial PR.



The only shake-up likely to happen in the UK is the incorporation of

McCann-Erickson’s regional PR network - Interpublic owns the

McCann-Erickson ad agency - into Shandwick’s. PR will have a strong

backer within Interpublic when John Dooner, who currently heads the

McCann-Erickson Worldgroup, takes over as CEO of Interpublic in

2001.





YOUNG AND RUBICAM



Young and Rubicam is small fry compared to Interpublic and Omnicom, but

its principal PR brand, Burson-Marsteller, is the world’s largest PR

agency. Aside from B-M, Y&R owns the smaller, funkier Cohn and Wolfe,

and the group has just acquired one of the big Wall Street corporate and

financial consultancies, Robinson Lehrer and Montgomery.



Y&R’s PR brands account for 20 per cent of its overall revenues, which

in 1999 were dollars 1.7 billion. Following its flotation two years ago,

Y&R now has the cash to make acquisitions. As well as Robinson Lehrer

Montgomery, Y&R’s purchases last year included the Banner Corporation, a

technology marketing and PR outfit with billings of pounds 22 million

and offices in the UK and the US. Y&R is planning to invest pounds 6

million in Banner over the next five years to develop it into a third

stand-alone, international brand.



There have been some key personnel changes at the very top of Y&R.

Former B-M head Tom Bell, who had been running the advertising business,

was appointed president and CEO of the Y&R group. B-M chairman Graham

Phillips returned to advertising to take his place. Fresh blood at B-M

Europe has given the agency new vigour. In July 1999, B-M launched its

Washington DC-based lobbying brand BKSH in London and Brussels.



In March this year B-M finally reversed the policy, introduced in 1996,

of organising itself along European practice lines. The policy was

applied so dogmatically that profit and loss was calculated by regional

practice rather than by country, and country managing directors’ jobs

were scrapped, depriving the agency of a big pool of talent in one fell

swoop.



But last month, Allan Biggar, previously head of B-M’s public affairs

practice in Europe and market leader for Brussels, was appointed UK

MD.



The old profit and loss structure has been dismantled, and Biggar will

assume financial responsibility for his own market.





CHIME COMMUNICATIONS



In the past year Chime chairman Lord Bell has acquired agencies of every

shape and size. July 1999 saw the purchase of Landmark Communications, a

corporate consultancy specialising in telecoms, IT and the internet. In

October, he snapped up food specialist Wearne Associates, which was

incorporated into the Good Relations group. In March this year, he

announced the acquisition of Insight PR, a 43-strong technology and

internet communications consultancy whose clients include

Hewlett-Packard and Cisco. March also saw his biggest purchase,

110-strong technology agency Harvard PR. Harvard has offices in London,

Paris and Munich.



Bell has been investing heavily in technology acquisitions in order to

build a full service internet consultancy. A web site design company,

IAB, has been established, as has a brand consultancy,

e-communications.



With the addition of Harvard PR and Insight PR, and another new

acquisition, electronic publishing company Brass Tacks, Chime now has a

significant pool of internet expertise. The next move will be to add an

international web advertising agency, and the creation of a new

division, Chime On-line.



This new division could eventually be floated separately.



Perhaps the most significant development within Chime has been the

restructuring which created five new businesses, to the heads of which

Bell has devolved some of the power which had previously been locked

firmly in his own hands.



The second tier of management at Chime now consists of the heads of ad

agency HHCL, acquired in 1997, Good Relations, Opinion Leader Research,

marketing services specialist AMD group, and Bell Pottinger

Communications, which is now run by Chris Satterthwaite, previously

chief executive of HHCL. Chime On-Line is now a sixth division.



Bell says: ’We’ve built a separate niche business in the UK that has the

ability to compete against the giant international businesses. We are

going to do the same in the on-line area.’





INCEPTA GROUP



The most significant event for Incepta, parent of Citigate Dewe Rogerson

and public affairs business Citigate Westminster, was its attempted

hostile takeover bid for Lopex in the summer of 1999. Lopex owned

Grayling, and its operations combined would have created the second

largest UK PR group, with a fee income of pounds 34.6 million. In late

1997, Incepta had tried to make an agreed bid for Lopex, but the Lopex

board had rejected it.



The second attempt was hostile, but it failed. French marketing services

giant Havas Advertising stepped in as a white knight and took over Lopex

instead. Despite failing to buy Lopex, Incepta did fantastically well

out of the whole exercise. The sale of its 26.6 per cent stake in Lopex

to Havas freed up pounds 10.9 million to spend acquiring agencies. ’It

was a no-lose situation,’ says Incepta CEO David Wright.



Some of the money has already been spent on buying the 170-strong German

corporate communications and advertising group SEA, acquiring full

service advertising and PR group Alexander Demuth in Frankfurt, and

buying MARCHCom.co.uk.



In August 1999 Incepta also bought Singapore agencies Image PR and Image

Marcom. Wright is planning further shopping sprees in the US, where

Incepta has about 100 PR professionals, and in Europe, particularly in

Scandinavia, Italy and Holland.



Back in the UK, the merger with Dewe Rogerson, acquired in 1998, proved

itself to have been a good move. The clashes of ego and walkouts

predicted by rival consultants were minimal, and the agency has got on

with doing what it does best, namely financial PR for the telecoms

sector. Clients have included Olivetti, Deutsche Telecom, the

privatisation of Ireland’s Telecom Eireann, and Orange during its sale

to Mannesmann. Outside the telecoms arena CDR handled the flotations of

Freeserve and Lastminute.com, and Punch’s hostile bid for Allied

Domecq’s pubs.





PR INTERESTS OF TOP MARKETING SERVICES GROUPS


Rk Company         Fee income   (pounds)         Turnover 99       Staff

                         99           98  %chg      (pounds)    99    98

1  Omnicom(1)    59,554,999   48,413,159    23    85,023,663   855   703

2  WPP           40,344,353   38,002,985     6    69,917,013   497   386

3  Interpublic   38,636,000   36,649,000     5    52,418,000   537   514

4  Chime         34,390,000   30,085,000    14    95,188,000   359   333

5  Incepta       30,026,902   26,532,536    13   173,800,892   295   311

6  Young and

   Rubicam       24,370,253   23,316,185     5    36,055,649   235   225

7  Havas(2)      18,481,932   16,924,937     9    32,023,113   257   259

8  Grey

   Communications

   Group         11,471,600    7,421,700    55    17,700,492   167   128

9  True North     9,821,166    9,627,095     2    14,933,302   108   115

All figures relate to the year ended 31 December 1999

Fee income = PR fees + mark-up

(1) Excludes figures from Gavin Anderson

(2) Includes figures for Lopex.



Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Latest Articles

Analysis: Fishburn chiefs keep eyes on future despite mounting departures

Analysis: Fishburn chiefs keep eyes on future despite mounting departures

Fishburn's management have defended their reinvention of the 23-year-old agency amid industry mutterings, fed by a series of director-level departures, about the direction in which it is going.

Hit or Miss? EasyJet backs Shakespeare Day campaign with world record attempt

Hit or Miss? EasyJet backs Shakespeare Day campaign with world record attempt

EasyJet aimed to break the world record for the highest ever theatrical performance for Shakespeare's 450th birthday yesterday with the Reduced Shakespeare Company performing on a flight from Gatwick to Verona.

Top PRs to gather in Barcelona for inaugural PRWeek Global Congress

Top PRs to gather in Barcelona for inaugural PRWeek Global Congress

Senior executives from IBM, Nestlé, Vedanta, GE, Cargill, Philips and Allianz will be among the speakers at PRWeek's first Global Congress.

Max Clifford trial jury reconvenes with majority verdicts direction

Max Clifford trial jury reconvenes with majority verdicts direction

The jury in the trial of celebrity publicist Max Clifford on 11 charges of indecent assault has reconvened after being told by the judge yesterday afternoon that he will now accept majority verdicts.