It's been two strong years of growth for Germany's PR agencies.
Fee income for the Top 100 agencies grew by an average of 30 per cent
last year, surpassing the 23 per cent achieved in 1999.
Germany's pre-eminent agency Kohtes Klewes maintained its lead over its
distant pursuers with a rise of 28 per cent, helped by the fact that
last year's second placed agency Hunzinger slipped back to ninth place
after a seven per cent fall in its revenues.
The reason why nearly every agency performed well was the strength of
the economy last year. Economic growth during 2000 was three per cent -
the highest since 1992.
Last year began on a high with the continuation of the dot.com boom and
a flurry of IPOs. It is hardly surprising, therefore, that the star
performer among German agencies was a financial specialist, Haubrok,
which posted an impressive 119 per cent rise in fee income to DM19.3m,
propelling it into sixth spot.
This year, though, the flood of IPOs has dried up. Turbulence in
financial markets has put many flotation plans on ice and - as in other
countries - many dot.coms have either crashed or slashed budgets.
Moreover, many companies listed on the Neuer Markt stock exchange, the
world's second biggest equity market for hi-tech companies behind New
York's Nasdaq, have seen their share prices take a battering.
Klaus Kirchhoff, founder of investor relations specialist Kirchhoff
Consult, says that of the 38 IPOs his company has handled since 1998, 30
were Neuer Markt flotations. Now that investor sentiment has turned,
times will surely be tougher for the agencies that have ridden the new
economy IPO wave.
'We have a weaker market than in 2000,' concedes Haubrok managing
director Michael Kempkes. 'But that's true of stock markets worldwide.
There are not nearly as many IPOs as in 2000 and it's possible that some
financial PR agencies will have lower turnovers this year.'
'People are going below their normal rates just to get an IPO assignment
- although we are not doing that,' says BSMG Worldwide Deutschland
chairman Janos Goenczoel. 'Thankfully, we have five other major practice
areas aside from financial.'
Kempkes believes that within the next three years 30 per cent of Neuer
Markt companies will have disappeared, either through bankruptcy or
But consolidation in the shape of M&As also brings PR opportunities in
the field of change management, internal communications and IR
There is likely to be a glut of M&A work soon, triggered not only by the
altered market conditions but also by changes to Germany's taxation laws
from January 2002. From then, German firms will not have to pay tax on
the subsidiaries they sell. Goenczoel says banks are already getting in
touch with PR agencies to prepare communications programmes linked to
M&As under preparation. He expects corporate communications to be one of
PR's strongest growth areas this year.
Weber Shandwick Deutschland chief executive officer Christiane Dirkes
says she expects to see a rise in integrated communications briefs
during the coming year. Clients have increasingly asked for Weber
Shandwick to work together with its IPG sister agency, the advertising
heavyweight McCann-Erickson. She also expects the interactive PR
division to grow strongly on the back of online tools such as
'standardised press rooms'.
Changes in pension plan legislation, widely known as the Riester Rente,
are also likely to present a massive opportunity for agency growth as
financial services companies vie to win over consumers with new
'Nearly every financial services company is preparing a campaign. These
pension changes are going to be very big business for companies in the
personal finance sector,' says Fischer Appelt Communications managing
director Andreas Fischer-Appelt. 'The upper house of the German
parliament recently gave its blessing to a reform of the pensions
system,' adds Kohtes Klewes CEO Gregor Schoenborn. 'Private provision
for old age is being introduced on a major scale in Germany and will be
state-sponsored in the future. This means there is likely to be a boom
in both the insurance and financial services sectors in the years
Despite all stock market upheavals and the travails of dot.coms,
Germany's underlying economy seems in robust shape. Although it is
unlikely that the exceptionally strong economic growth of last year will
be matched, expectations are that GDP will swell by around two per cent
Trimedia Communications managing partner Bodo Bimboesei points out that
around a year ago his firm had 14 dot.com clients, while today there is
one. But he says that this is no great concern given the demand for
consumer PR from other sorts of clients.
Goenczoel adds that Germany still has greater growth potential than more
mature markets such as the UK and US. All told, therefore, the omens
look favourable for another year of strong growth - although a repeat of
last year's average hike of 30 per cent may be a tall order.
EURO CONSULTANCIES - GERMANY
Rank Company Fee income (pounds) Growth
2000 2000 1999 %
1 Kohtes Klewes* 23,680,540 18,490,284 28
2 Trimedia Comms Deutschland* 6,753,820 5,287,573 28
3 Weber Shandwick Deutschland* 6,455,380 5,709,281 13
4 GCI Hering Schuppener 6,345,087 4,573,912 39
5 BSMG Worldwide Deutschland* 6,329,696 5,157,816 23
6 Haubrok 6,260,745 2,854,640 119
7 FischerAppelt Kommunikation* 5,804,327 4,141,175 40
8 ABC Euro RSCG* 5,641,159 5,118,889 10
9 Hunzinger Public Relations 5,547,085 5,952,574 -7
10 Edelman PRW'wide 5,222,694 3,633,179 44
11 Media Consulta Deutschland 4,904,791 3,732,442 31
12 H&K/Hiller, Wust & Partners 4,451,617 2,903,299 53
13 Kirchhoff Consult 4,306,290 4,190,807 3
14 Ahrens & Behrent Agentur* 4,281,961 3,308,788 29
15 Burson-Marsteller 4,249,522 3,762,935 13
16 Sponsor Partners 4,215,460 3,829,435 10
17 Citigate Demuth 4,054,887 3,795,374 7
18 Leipziger & Partner Komms* 3,633,179 3,470,983 5
19 DeekelingKommunikation* 3,600,740 2,887,080 25
20 Koob Agentur* 3,535,861 3,503,422 1
21 Fleishman-Hillard Germany* 3,343,822 2,487,105 34
22 Oliver Schrott Komms 3,273,105 2,523,762 30
23 F&H Public Relations 3,062,899 1,889,577 62
24 Fink & Fuchs PR 2,926,006 2,491,323 17
25 Bonig & Yamaoka 2,926,006 1,972,297 48
Rank Company Location Status
1 Kohtes Klewes* Dusseldorf Brodeur member
2 Trimedia Comms Deutschland* Frank/Main Trimedia subsidiary
3 Weber Shandwick Deutschland* Bonn WS subsidiary
4 GCI Hering Schuppener Dusseldorf GCI subsidiary
5 BSMG Worldwide Deutschland* Hamburg BSMG subsidiary
6 Haubrok Dusseldorf Independent
7 FischerAppelt Kommunikation* Hamburg Independent
8 ABC Euro RSCG* Dusseldorf Euro RSCG subsidiary
9 Hunzinger Public Relations Frank/Main Independent
10 Edelman PRW'wide Frank/Main Edelman subsidiary
11 Media Consulta Deutschland Berlin Media Consult member
12 H&K/Hiller, Wust & Partners Frank/Main H&K subsidiary
13 Kirchhoff Consult Hamburg Independent
14 Ahrens & Behrent Agentur* Frank/Main Independent
15 Burson-Marsteller Frank/Main B-M subsidiary
16 Sponsor Partners Bonn BBDO Group
17 Citigate Demuth Frank/Main Citigate subsidiary
18 Leipziger & Partner Komms* Frank/Main PROI network
19 DeekelingKommunikation* Dusseldorf ECCO member
20 Koob Agentur* Mulheim a Independent
21 Fleishman-Hillard Germany* Frank/Main F-H subsidiary
22 Oliver Schrott Komms Cologne Independent
23 F&H Public Relations Munich Independent
24 Fink & Fuchs PR Wiesbaden Independent
25 Bonig & Yamaoka Hamburg Independent
All figures relate to the year end 2000. Fee income = PR fees only
* Denotes GPRA member.
Figures compiled by PRWeek sister title PR Report