REGIONAL FOCUS Washington, DC: Capitol ventures

Douglas Quenqua finds DC's post-9/11 PR focus squarely back on the government.

Douglas Quenqua finds DC's post-9/11 PR focus squarely back on the government.

With apologies to Al Pacino, just when this city thought it was out, they pulled it back in. Toward the end of the 1990s, Washington was all atwitter over the prospect of finally dropping its status as a one-company town. No longer would the seat of the federal government double as its lap dog. Technology companies were popping up from Connecticut Avenue to Dulles, multinationals were seeking office space adjacent to law firms and lobby shops, and it suddenly seemed OK to strike up a conversation at The Palm without necessarily assuming your new friend was, in some way at least, working with the government. With further apologies to Al, this Little City That Could is being taught a humiliating lesson: never go outside the family. A confluence of events, most notably last year's terrorist attacks and the subsequent economic breakdown, has once again turned the eye of Washington's PR community squarely on the federal government. Why? Simple. They're the only ones spending money. And they're spending a lot of it. A massive rise in defense and security spending has spurred a flurry of activity among companies looking to market their services to the government. To be sure, the tech market is far from kaput. The hysterical buildup of tech companies in the metro area in the late '90s, specifically in Northern Virginia, has certainly slowed, but its remains may now serve as a basis for an actual, solid tech community. And the corporate malfeasance of 2002 has firms busily helping big corporate clients get their own houses in order. All eyes on the government That said, conversations with PR folks (or, as we call them here, public affairs pros) from Fairfax to Capitol Hill reveal that the big story of the past 12 months was the renewed reliance on government spending. Not that it ever went away entirely. As O'Keeffe & Company president Stephen O'Keeffe puts it, government work is "the crazy aunt in the attic you never wanted to admit was there" who has suddenly become the guest of honor at the family reunion. Case in point is Entrust, a company well known for its work in internet security. Already boasting a lucrative practice providing its products to the US government, the Nortel spin-off was perfectly positioned to aid the government in its post-9/11 quest to increase security. So to ensure it didn't get left behind, Entrust stepped up its PR work. "Because the level of activity increased, we decided we needed a more active PR and policy focus in the government arena," says senior media relations manager Carrie Bendzsa. With the help of Dittus Communications, a local mid-size agency fortunate enough to have been specializing in the nexus between technology and policy years before 9/11 hit, Entrust took its government marketing efforts to the next level. Not only did the company publicize the ways its products could fit into a plan for homeland security, it offered legislators help in shaping those plans - a popular activity over the past 12 months. "Government policy is being set at the same time," says Bob Sommers, EVP at MMW, "so it's not just about winning contracts. It's about trying to design what the government priorities will be." This state of affairs has yielded some profitable lobbying work around town. Even companies that make almost all their money from selling to the government increased their PR activity this year. Raytheon, one of the country's largest defense contractors, set up an entirely new practice specifically to market its homeland security products to the government. "It's there to pursue homeland security business for the company and offer our solutions to the customer's requirements," says Dave Shea, director of media relations for Raytheon's Washington office. Not all government spending has been in the areas of security and defense in the past year, though. Unrelated to the events of September 11, the government has handed out some sizeable communications contracts in the past 12 months - contracts that account for some of the year's biggest wins given the lack of the significant corporate spending agencies had gotten used to. Burson-Marsteller recently walked away with one of the year's most coveted campaigns, a $55 million, five-year integrated effort by the Bureau of Engraving and Printing to introduce a redesigned American currency to the world. The Internal Revenue Service awarded Weber Shandwick Worldwide and Foote Cone & Belding a $100 million, five-year campaign in May (nearly a year after issuing the RFP) to refine its image as a user-friendly agency and urge taxpayers to file electronically. The Centers for Disease Control hired Publicis Dialog, Saatchi & Saatchi, and Frankel in October to wage a $125 million campaign urging young teens to live healthier lives. Fleishman-Hillard won a multimillion dollar campaign, run jointly by the Department of Transportation and the Environmental Protection Agency, to encourage Americans to make more environmentally conscious choices regarding transportation. Agency heads are expressing a new appreciation for this kind of work, despite the red tape and low margins. It's steady and it's high profile, and the government has become, surprisingly, one of the more sophisticated purchasers of communications services. "What they've done is approached PR firms as the lead agencies in putting together integrated campaigns, rather than going to an advertising shop as the lead agency," says Richard Mintz, Burson's head of global public affairs. "They have a greater appreciation for how multidisciplinary campaigns come together. There's a lot more leverage and efficiency to be gained [going to a PR agency first] than buying ads and saying, 'Let's do PR on the side.'" Foreign subjects The renewed PR focus on government has also been prevalent among foreign leadership. In addition to its other recent wins, Burson also copped one of the more coveted foreign government campaigns of late in capturing a $20 million, two-year effort sponsored by the Canadian government to reverse a US tariff placed on Canadian lumber, the latest blow in a decades-long disagreement between the two countries. But when it comes to foreign government activity, the biggest and most controversial story of the year undoubtedly belongs to Saudi Arabia. Its use of Qorvis Communications - to the tune of $200,000 a month - caught the attention of people far removed from the public affairs grapevine. Mainstream media spent a few days tossing around the firm's controversial ads for the country in the days after September 11, claiming that major networks had refused to run them. Saudi Arabia continues to use the two-year-old firm to do PR and advertise here and at home, a mighty task given the perpetually unanswerable question of whether the Muslim country is, in fact, a US ally in the war on terror. As prominent as that war has been, the war on corporate wrongdoing has garnered more than its fair share of hysterical headlines over the past nine months. Ever since Enron was exposed in January, companies have been rushing to ensure their own safety in the suddenly business-wary media environment. "When a media outlet decides to do an article on your company, you might not think of it as a crisis, but they certainly do," says Lance Morgan, president of WSW's Washington office. Meanwhile, those relatively few that have been in the center of the storm are using PR to navigate their way out, the most notable example being WorldCom with its July retention of APCO Worldwide. The reverberations from the scandals go beyond immediate corporate responses, however. The legislative reaction in this case was uncharacteristically swift, owing perhaps to the upcoming Congressional elections, and some feel there could be more on the way if things don't change. It's a situation on which public affairs executives from one side of town to the other will want to be heard. "The Sarbanes [corporate accountability] bill probably relieves some of the immediate pressure, as will the stock market if it remains on somewhat of a level course," says Jamie Moeller, head of public affairs at Ogilvy. "But if the market continues to crater and if we have any more high-profile examples of fraud or restatements of earnings, pressure to do something about that come January will be significant." Whether that will come to pass is anyone's guess, as is anything about the future of public affairs in Washington these days. "...Provided there are no more attacks," seems to have become the most popular refrain in town - an odd state of affairs for a city whose citizens love nothing more than out-predicting one another.

WASHINGTON, DC AREA PR AGENCIES
Rnk  Firm Name                           Revenue (dlrs)  Increase  Staff
                                       2001        2000       (%)
1    Weber Shandwick Worldwide   81,342,402         N/A       N/A    358
2    Hill & Knowlton             46,925,000  32,300,000        45    211
3    Fleishman-Hillard           45,434,000  34,693,000        31    194
4    Burson-Marsteller           44,322,000  46,391,000        -4    158
5    Ketchum                     28,596,000  26,549,000         8    112
6    Porter Novelli              27,209,000  27,490,000        -1    148
7    Ogilvy Public
     Relations Worldwide         22,709,266  29,320,100       -23    119
8    Edelman Public
     Relations Worldwide         21,774,397  20,551,852         6    116
9    GCI Group/APCO Worldwide    20,016,425  19,186,655         4    113
10   Golin/Harris International  18,227,982  21,420,000       -15     54
11   The Kamber Group            12,400,000         N/A       N/A    N/A
12   Widmeyer Communications      8,300,000   8,500,000        -2     56
13   Equals Three
     Communications
     (Bethesda, MD)               7,345,963   5,040,321        46     75
14   The MWW Group                7,091,789   8,644,619       -18     11
15   Qorvis Communications        7,057,295   4,067,000        74     37
16   TRIAD Communications         5,401,315   7,189,856       -25     20
17   Dittus Communications        5,200,000   4,443,566        17     41
18   Stratacomm                   4,894,392   3,918,672        25     29
19   MS&L                         4,697,817   5,337,397       -12     33
20   FitzGerald Communications    4,429,900   3,684,811        20     29
21   Merritt Group (Vienna, VA)   4,400,000   4,300,000         2    N/A
22   Brotman Winter Fried
     Communications               4,200,000   4,200,000         0     12
23   Creative Response
     Concepts
     (Alexandria, VA)             3,910,765   3,440,172        14     21
24   O'Keeffe & Company
     (McLean, VA)                 3,653,387   4,148,939       -12     23
25   Spectrum Science
     Public Relations             3,224,629   3,031,517         6     25
26   The Bivings Group            3,214,000   3,704,000       -13     52
27   GYMR, LLC Public Relations   2,829,857   2,051,031        38     15
28   Ruder Finn Group             2,766,000   3,074,000       -10     25
29   Brodeur Worldwide            2,345,200   2,300,000         2     15
30   The SheaHedges Group
     (McLean, VA)                 2,000,000   2,000,000         0     17
31   DCS Group                    1,716,028   2,079,962       -18     11
32   Cohn & Wolfe                 1,643,000   5,595,000       -71      0
33   Smith & Harroff
     (Alexandria, VA)             1,627,987   2,641,430       -38     14
34   IMRE Communications
     (Baltimore, MD)              1,604,110   1,244,000        29     14
35   Hyde Park Communications     1,521,000     962,000        58    N/A
36   Rowland Comms WW
     (Wilmington, DE)               893,000     912,000        -2      5
37   The Nixon Group                780,609     320,287       144      7
38   Witeck Combs Communications    774,400     746,000         4      9
39   Optimum Public Relations
     (Falls Church, VA)             746,000     921,000       -19      7
40   Jasculca/
     Terman & Associates            384,446     586,180       -34      3
41   Waggener Edstrom
     (Great Falls, VA)              251,000     246,000         2      1
42   IMRE Communications            243,025     100,000       143      3
43   Conkling, Fiskum
     & McCormick                    147,654     174,244       -15      2
Source: Council of PR Firms Auditing: No audit was required for
inclusion in the rankings. The CEO/CFO/principal was required to sign a
statement verifying the accuracy of the data and agreeing to possible
participation in a random audit Disclaimer: While every effort has been
made to ensure the accuracy of these figures, PRWeek cannot accept
liability for, nor make financial guarantees based upon the information
in this chart.

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