2002 GLOBAL RANKINGS: Canada - While the economy in the US remains

The theory is that when America sneezes, Canada catches a cold. Butin the last 18 months, the US had had an unshakable case of the flu,while Canada has been just a touch under the weather.

The theory is that when America sneezes, Canada catches a cold. But in the last 18 months, the US had had an unshakable case of the flu, while Canada has been just a touch under the weather.

While Canada is the headquarters for such tech and telecom giants as Nortel, JDS, Uniphase, Adobe, Alcatel, Cognos, and MDS Nordion, it did not experience the same influx of dot-com cash as the US, and therefore did not suffer as greatly. Geoffrey Rowan, MD of Ketchum in Canada, explains, "It's not that we didn't see increased hi-tech activity during the dot-com era, but it wasn't as crazy or the funding as intense."

That's not to say there weren't casualties. Several small tech firms had to shut down, while the corporate communications departments of companies such as Nortel - which laid off 45,000 of its 94,500 employees - suffered serious cuts. And the bigger agencies found themselves working hard to make up for lost tech revenues. Michael Coates, president and CEO of Hill & Knowlton in Canada, comments that hi-tech PR accounted for 38% of the firm's billings at the start of 2001, but now comprises just over 25%of H&K's business. It was only the growth of work in public affairs that enabled H&K to remain flat over the year.

This year, thinks Stan Didzbalis, president of Benchmark Porter Novelli, business has grown modestly. "The same caution that characterizes the US market at the moment also afflicts ours, he says. Didzbalis has not noticed budget cuts as such, but has seen few long-term projects given to agencies. "Four of our top 10 clients have increased their budgets this year, he says, "but most of the new work in the market is very short-term. The caution translates to a nervousness about commitments to future projects."

Like Coates, Didzbalis feels that public affairs and corporate affairs are the strongest growth areas. "We now find ourselves increasingly asked to deal with issues, crises, positioning, and reputation, says the PN chief. "It's gone from being all opportunity, to being much more about protecting reputations. In this respect, Didzbalis notes, there may be a reaction to the recent scandals that have rocked US investor confidence.

Coates says the increase in public affairs work is partly the result of the slow economy. "Everyone turns to government at these times, he says. "Government has to keep spending, and it pays its bills. In particular, trade issues, such as the battle with the US over its 28% tariff on Canadian lumber, have proven a boon to several agencies.

Despite these strong signs, many agency chiefs do not expect to see new agencies emerging, as most of the top 15 multinationals are already in Canada. "We're still seeing one- or two-person shops emerging, says Didzbalis.

"We don't expect too many new entrants, but there's certainly room for good people."

GLOBAL AGENCIES OPERATING IN CANADA

Rank Agency Name Canada Income (dollars) %
2001 2001 2000 chnge
1 Fleishman-Hillard 23,505,000 27,928,000 -16
2 Weber Shandwick Worldwide 8,449,000 8,696,000 -3
3 Hill & Knowlton 8,393,000 8,782,000 -4
4 Edelman Public Relations
Worldwide 5,067,694 6,817,645 -26
5 Porter Novelli 4,548,000 4,001,000 14
6 GCI Group/APCO Worldwide 3,314,474 3,112,296 7
7 MS&L 3,003,126 2,926,000 3

Sources: Council of PR Firms Note: This is a list of global PR firms in
Canada. It does not include local independents

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