ANALYSIS - Miami PR Agencies - Miami - key location or a risky business? Miami was going to be the US gateway for Latin America's PR, but while some agencies thrived, some agencies died. Jeff Zbar explains the scene.
For a region with so much promise, Latin America has caused problems for a lot of Miami public relations shops.
First, Ketchum Public Relations announced in August it would close its Miami office, transferring any staffers who wanted to move to its Atlanta office. Then in October, Fleishman-Hillard says a fall in fees forced it to slash its Miami workforce.
Contrast those announcements with claims of double-digit growth and a need for more office space from erstwhile rivals, and Miami has all the makings of a truly bipolar market.
'Do we really need to be in Miami?' asked Paul Capelli, senior vice president and director of Ketchum's Miami office, which will continue to service its mostly Latin American clients until its doors are shuttered at year's end. It will then consolidate with the firm's ethnic division in Atlanta.
'Our primary (client) base is not here in South Florida. We're still going to focus on Latin America, we're just going to do it from Atlanta.'
The move at Ketchum was one of 'ethnic marketing synergies,' Capelli said. Ketchum Latin America and Ketchum Asociados, the company's US Hispanic division based in Miami since 1994, will become a part of the firm's multicultural practice. Already, the Atlanta office has 100 staffers, most of whom focus on African American communications, Capelli said.
Like other agencies serving the region, Ketchum's Miami office coordinates marketing communications efforts executed in-country by a network of 10 affiliates throughout the region, Capelli said.So planning and strategic oversight could easily be handled from Atlanta, he concluded.
Also, clients serviced by the Miami office, including Delta Airlines, Turner Broadcasting, Nike and Equifax, all are based or have significant operations in Atlanta, he said.
Fleishman-Hillard, ranked among the five largest firms in South Florida with 1998 fee income of $3.4 million, saw about 8% of that drop with Latin American fall-out from the Asian crisis. As a result, the firm fired seven of its 24 staffers in October. Rissig Licha, executive vice president, senior partner and managing director for Latin America in the firm's Coral Gables, Florida, office laid off seven people in October, from 24 to 17 lower level executives.
The reason: projects were cancelled or put on hold and budgets were scaled back, all as a result of the Asian economic crisis that has affected Latin America, he said. Licha doesn't expect any change in the fourth quarter, as client budget allocations have been made. But improvements could come in 1999.
'This was a combination of factors that all happened at the same time,' he said. 'The fundamentals of the economies in Latin America are still sound. You know this business.'
To wit, the office, which opened in May 1993, had come off 80% growth from 1997 to 1998, he said, with work coming from Microsoft, El Salvador, DirecTV, Argentine media company Grupo Clarin and Proctor & Gamble, he said. Before the layoffs and budget cuts, the shop ranked among the top five firms in South Florida, according to the South Florida Business Journal, which ranks public relations firms annually.
Other firms, though, are pleased to be in Miami, long considered the US gateway to Latin America. Edelman Public Relations Worldwide bought an existing six-person Boca Raton shop earlier this year. Within months, executives moved it south to Miami and positioned it as a Latin American and technology specialty firm. Since that time, Edelman Latin America has topped 20 staffers - and continues to grow, said general manager Janet Maizner.
Miami is the perfect location to keep pace with regional contacts, she added. Clients and prospects pass through town frequently, so having its office downtown keeps the firm close to the market buzz, she said.
'This is the center of Latin America,' Maizner said. 'This is where we need to be.'
With regional billings up 20% for the year, Miami is an ideal market to base its Latin American efforts, said Jeffrey Sharlach, president of The Jeffrey Group Miami Beach, a Shandwick International affiliate. Multinational growth in the region remains robust, with Nintendo, Kroll-O'Gara and Regus Office Systems all hiring the firm in the second half of the year.
'Fleishman-Hillard was blaming economic conditions, but we haven't seen any slowdown in the market,' Sharlach said. 'I'm very encouraged with the market. My big problem is finding the staff.'.