GLOBAL RANKINGS 2000: AUSTRALIA - Boom time ahead. Increased corporate PR, a healthy economy and the Sydney Olympics have all contributed to an impressive PR boom down under. Paul McIntyre reports

The Australian head of Burson-Marsteller, Kelly Parkinson, signed off on a big forecast this year - the agency's fee income should rise 40 per cent for 2000-2001.

The Australian head of Burson-Marsteller, Kelly Parkinson, signed off on a big forecast this year - the agency's fee income should rise 40 per cent for 2000-2001.

Parkinson is not alone. PPR, until last week the biggest independent Australian firm, was up 48 per cent in fee income for the 12 months ending June 2000. Indeed, most major PR groups have reported double-digit growth figures for several years while, at the same time, many specialist consultancies are flourishing.

The PR business down under is booming, due in part to the Sydney Olympics, a rise in corporate PR and the sustained health of the Australian economy.

Noel Turnbull, chairman of Australia's biggest PR network, Turnbull Porter Novelli, says: 'Traditionally PR is counter-cyclical, but this growth period has been quite cyclical. It's had a significant impact on the industry's health.'

Although difficult to value - no figures are compiled by the Public Relations Institute of Australia - industry estimates value the sector between dollars 180 million (Adollars 300 million) and dollars 360 million. The Australian advertising sector, by comparison, is worth about dollars 5 billion.

In PR terms Australia is a fragmented market. While the biggest international practices are all active - B-M's Australian operation, for example, is the group's largest in the Asia-Pacific region - a strong line-up of medium-sized single-city shops competes aggressively with multinational brands for local and offshore clients. In the next two years, several top global PR networks, such as Hill and Knowlton, Edelman and Burson-Marsteller, will be pushing for substantial new business through internationally aligned clients.

On the flipside, a number of independent local players are also looking to expand beyond their typical single-city focus in Melbourne or Sydney. (Australia has seven states and territories, each with a capital city.)

In recent weeks, two major takeovers have been completed. Edelman finalised its takeover of The Rowland Company in London, Singapore and Sydney, lifting the firm's Australian presence substantially. And The Communications Group - parent to advertising agency Bates Worldwide - last week acquired the largest remaining independent, PPR.

Mirroring American and UK trends, information technology has been by far the biggest growth area for Australian practices, spawning both specialised start-ups and rapidly expanding divisions inside the larger firms. Unsurprisingly, consumer relations, investor relations, issues management, government relations plus financial services and telecoms have been key growth areas.

Mike Smith, Shandwick/IPR chairman, notes a polarisation between global companies and local corporations in the use of PR firms. 'Multinationals are showing a preference for common service styles and common brands around the world, while large Australian companies tend to cherry pick. They've got a much bigger emphasis on the individuals who do the work rather than the brand of the consultancy.'

Until 1997, Shandwick/IPR was Australia's biggest PR firm for three decades.

Although it is growing at a rate of more than ten per cent a year, several of its international rivals have shown faster growth.



Media make-up

The Australian PR market does have its nuances. A precious few media moguls control almost all the news outlets. There are just two newspaper proprietors - Rupert Murdoch's News Corp. and the old Fairfax family empire - which control all of the metropolitan press and most regional and rural mastheads. In a joint venture with Microsoft, Australia billionaire media tycoon, Kerry Packer, controls the top TV group, Network Nine; the biggest magazine publishing group, ACP; and the top ranking internet portal, ninemsn.

Packer and Murdoch are also partners in the leading national pay-TV operator, Foxtel.

Turnbull, who sold a non-controlling stake in his company, Turnbull Fox Phillips, to Porter Novelli in 1997, says the nature of media ownership in Australia has greatly impacted local PR practice. 'The Australian industry is very small but very sophisticated and leading-edge,' says Turnbull.

'In some markets, such as the UK and US, it's easy for a lot of practitioners to service entirely on the basis of media relations. We were at the forefront of the environmental tidal wave and consumer activism. We're very small but very mature. Consequently, our big focus is that interface between brand and corporate reputation.'

Royce Communications is one of the larger independents in the marketplace.

Five years ago it was 51 per cent owned by Manning Selvage and Lee before chief executive Peter Mahon bought it back. 'I can see Royce becoming a quasi-boutique investment bank,' he says. 'We're seeing a broadening of the scope of what people like us do and the delineation is becoming much fuzzier.'

The traditional PR stomping ground of media relations, Mahon says, is important to Royce, but he argues there is too much focus on it among his rivals. H&K joint managing director, Greg Ray, disagrees: 'I don't want to deny the importance of high-end strategy, but media relations is still critically important. If we think we can do our job outside the media or with less focus on the media, we're kidding ourselves.'



Corporate influence

Sean Barrett, chief executive of the new Edelman/ Rowland group in Australia, says the growth and increasing importance of corporate PR will see more ad agencies looking to enter the Australian market through acquisition in coming months. Barrett accepts the irony in Edelman's purchase of Rowland from Saatchi and Saatchi but says that was more an acknowledgment by the advertising group that it could not get the firms' synergies right.

But the suggestion that marketing communications groups such as WPP and Omnicom have an advantage over PR specialists by leveraging their research and advertising capabilities is yet to be proved, according to Barrett.

'That makes sense when you're putting a case to market analysts as to why you need a conglomerate. But I see little evidence of them being able to cross-sell. There is still a huge knowledge gulf between advertising and PR. The opportunity for us is that we will offer totally focused PR.'

And what of the Olympics? While many are enjoying the attention that the global competition brings to Australia, Parkinson expects significant activity after the Olympics because non-Olympic sponsors have been warehousing budgets for a late-year splurge.



INTERNATIONAL AGENCIES OPERATING IN AUSTRALIA

RANK  AGENCY NAME                    AUSTRALIAN INCOME (DOLLARS)       %

99                                              99            98  CHANGE

1     Turnbull Porter Novelli            9,160,000     7,456,000      23

2     Hill and Knowlton                  8,000,000           N/A     N/A

3     Burson-Marsteller                  6,129,000     5,746,000       7

4     Shandwick                          6,122,000           N/A     N/A

5     Edelman                            2,591,748     2,573,192       1

6     GCI Group/APCO                     1,348,733       438,848     207

7     Text 100                           1,027,949       183,059     462

8     Cohn and Wolfe                       546,000       268,000     104

9     Manning Selvage and Lee               41,800        41,800       0

Sources: PRWeek US Top Agency Rankings; PRWeek UK European Rankings

Auditing: Please refer to main chart on pages X-XI for audit

information.

Notes: 2 Hill and Knowlton: agency estimate 5 Edelman revenues do not

include income from the Rowland Company acquisition.





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