NEWS ANALYSIS: Financial PR offers most direct route to the board - Marketing services giants are racing to acquire the diminishing number of independent financial PR specialists for that all-important boardroom access

Right now, independent City PR firms are hot property. As global

marketing services groups fall over each other to secure a slice of the

financial PR pie, those in the PR community are left playing a game of

guess who will be bought next.



Two of London's few remaining independent City PR outfits look set to

tie the knot in the coming weeks.



Just last week, Finsbury founders Rupert Younger and Roland Rudd

confirmed they were undertaking due diligence with Sir Martin Sorrell's

advertising and communications group, WPP, which already bought out

Buchanan Communications three years ago in an earlier bid to capture the

financial PR market.



Younger and Rudd are reported to be holding out for a phenomenal pounds

50 million after earn-out.



Square Mile, run by founding directors Tim Jackaman and Susan Ellis, is

in the final stages of completing its own deal with US holding company

True North Communications, parent of international PR agency BSMG. If

the takeover - reportedly worth pounds 10 million - goes ahead, Jackaman

and Ellis stand to make their millions.



In the last six months, Havas Advertising of France has snapped up its

first London financial PR outfit, Hudson Sandler, in a deal reportedly

worth up to pounds 20 million. And British advertising group Cordiant

Communications has bought Lighthouse, the parent company of Financial

Dynamics, one of the biggest players in the financial PR market.



For the PR agencies, the benefits of such partnerships are obvious: they

grant them the backing of a strong balance sheet and the immediate power

to go global in an increasingly consolidated market.



Equally, for marketing services groups, financial PR firms are clearly

attractive acquisition targets - more so than the other PR sectors,

because they are hugely profitable and growing rapidly.



But there's a theory that these groups are buying in to more than just

high margins. They're buying into the key decision-makers of some of the

world's biggest and most powerful corporations.



Whereas advertising and other forms of PR, such as consumer, tend to be

commissioned and overseen by company marketing directors, financial PR

goes straight to the top.



When a company's share price is at stake, the chief executive stands up

and takes notice.



'Financial PR and IR are issues that can keep a CEO awake at night,'

says Robin Hepburn, CEO of Golin/Harris Ludgate in London.



'Share prices and mergers and acquisitions are CEO issues and if you can

solve a financial problem, you will be paid premium fees for doing so,'

he explains.



According to WestLB Panmure media analyst Lorna Tilbian, financial PR is

no longer relegated to the bottom of the company food chain.



'In the old days, the PR guy was out there with the printer, but now

he's with the CEO, the chief finance officer and the chairman,' she

says.



'For marketing services groups, having access to the CEO is right up

there on top of their list, alongside profits and margins,' she

adds.



In the all- important morning conference meetings, CEOs now want to see

three people round the table: the lawyer, the banker and the financial

PRO.



'Financial PR is totally unique in that it deals with the highest levels

within firms. By its very nature, you go straight to be board,' says

Hudson Sandler director Alistair Mackinnon-Musson.



'Not only are you dealing with share prices and large deals, but also

reputation management, of both the companies and the senior players in

companies - no other form of communication does that.'



CEOs are now recognising the importance of corporate reputation on share

prices, and therefore the importance of PR in the wake of the Company

Law Reform.



Chairman of the IPR's City and Financial Group, Neil Mainland, says:

'Around five years ago, the senior levels in companies didn't think too

much about communications.



'It was easy to buy advertising, because everyone bought that

automatically, but now communications has evolved and has a new element

- the effect on share price - and that has to be dealt with by senior

managers.'



With PR's high profile recognition, and the fact the advertising market

is becoming over-crowded, marketing services firms are cottoning on to

the idea of diversification and integrated offerings.



They want kudos in the boardroom and the chance to offer the big company

decision-makers an integrated, internat-ional, communications

package.



They want to be communications supergroups.



Richard Wolff, Golin/Harris International's US-based MD worldwide head

of global fin-ancial communications, says: 'Marketing services

organisations are moving towards integrated communications solutions and

a big part of that is IR and financial PR, because they have links with

CEOs.



'If you have the relationship in the C-suite (the CEO, CFO and chairman)

and you have the offering within the firm, then you can sell an

integrated communications solution straight to the key players.'



While this acquisition trail signals a new era for financial PR, it also

puts a great deal of pressure on the remaining independent financial PR

consultancies.



Those in the middle ground will most feel the push to sell and go

international, with neither the finance nor the time to grow

organically.



As Mackinnon-Musson puts it: 'Financial PR is no longer a cottage

industry. It's an international industry.'



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