REGIONAL FOCUS: No hangover in Missouri - St. Louis and Kansas CityPR firms never got in on the tech boom, and they're not suffering todayas a result. In fact, some are even poised for growth. John Frankreports

Sometimes it's better to miss a party.



Missouri's PR firms didn't see a great deal of the tech PR party, but

with the hangover from the tech wreck now dragging down the business

nationally, most in Missouri say they don't regret not hopping on that

bandwagon.



While major firms across the country have undergone massive layoffs and

drastic drops in business this year, Missouri firms by and large are

having a relatively stable year.



For many, that means staying even with 2000 revenues. "All of us are

hoping to break even or come close," says Donna Vandiver, head of

St.Louis-based The Vandiver Group. Her firm had about $1.9

million in PR income in 2000, and expects to remain at that level this

year. As for 2002, "it definitely seems clients are being a little

slower in approving plans for next year. The overall pattern is moderate

caution," she says.



Missouri PR is dominated by firms in its two major cities: St. Louis in

the east and Kansas City in the west. Fleishman-Hillard sits atop the

St. Louis market with $49.7 million in revenues last year for its

St. Louis office. The next firm in the market, Kupper Parker

Communications, had revenues of $5.5 million last year, and

expects that to jump 18% this year, thanks to its move into IR.



While Fleishman has traditionally gone after major corporate clients,

other St. Louis firms have done well dealing with mid-market

companies.



As major local companies have been bought up by rivals - TWA disappeared

this year, for example - the competition to grab clients in the middle

market has intensified. "Mid-cap companies are becoming more influential

here," notes Cathy Duncan, principal of St. Louis-based The Standing

Partnership.



Fleishman is also looking at that market, says Dave Senay, GM of the St.

Louis office. "We have great prospects in St. Louis in the middle-market

level," he says. Last year, Fleishman's St. Louis office saw 20% growth,

a number not reflected in Council of PR Firms rankings because of a

change in how Fleishman reported its numbers, Senay contends. "We're

going to consider it a major victory to retain the wins of the past 18

months," he adds.



Kupper Parker has been reaching far outside of St. Louis to keep

growing.



The firm has offices in New York and London, and also moved into IR work

this year, opening a Chicago office to push the new specialty. Chairman

Bruce Kupper expects $1 million in new revenue from IR

assignments.



Weber Shandwick Worldwide ranks third in St. Louis. Competitors have

speculated that WSW would have major layoffs there, but St. Louis MD Dan

Harrison denies that he's made major cuts. He puts his staff count at "a

little less than 29," the number reported last year. "Certainly, the new

business opportunities have been a little slower this year than in

previous years," he says.



In Kansas City, Barkley Evergreen tops the market with $2.36

million in PR income last year, and president Mike Swenson expects to

end this year up 10% from that level. That's largely down to booking the

firm's first full year working for jeans giant The Lee Clothing Company,

and because of several new accounts, including GiftCertificates.com.

"They had the audacity to actually go out and make money," he quips.

Swenson is finishing a three-year rebuilding project at his firm, during

which he's gradually phased out smaller local clients and replaced them

with more national work for large local companies, like Sprint PCS,

Farmland Industries, and Lee.



Some Missouri firms have been forced to cut staff, while others have

been forced to freeze or even reduce salaries. Kupper Parker is asking

employees to give up a day's pay per month through the end of the

year.



"The year's certainly going to end whimpering a little bit," says

Kupper.



The state's PR job market has softened, too. Larry Wheeler, president of

Boasberg/Wheeler Communications in Kansas City, says he's seen the

resume influx increase by 30% over the past year from candidates with

three to eight years of experience. Vandiver adds, "We've always gotten

resumes, but not in the numbers we saw this year. On the calls I'm

getting, the people sound pretty desperate."



Thinking bigger



But some firms, such as The Standing Partnership in St. Louis and

Barkley Evergreen in Kansas City, are actually expecting revenue

increases from last year, thanks to new business in such areas as life

sciences, clothing, and even an occasional tech client. "This year,

we're thrilled to say we're going to have slight growth," says The

Standing Partnership's Cathy Duncan.



For integrated firms, the shift of dollars from advertising to PR this

year has softened the blow of the advertising falloff. St. Louis-based

O'Connor & Partners has seen its revenue mix change from 80% PR and 20%

advertising last year, to 90% PR and 10% advertising this year.



Kupper, who also runs an integrated shop, says, "When you run out of

advertising budget, you can always do more with PR. The emphasis on

advertising has gone down this year."



So what happens now?



Of course, September 11 threw a giant question mark across the Missouri

PR landscape, as it did most everywhere else. Many clients took time to

reevaluate what they were doing and are planning to do next year.



Happily, however, most Missouri clients are talking about at least

maintaining their PR budgets in 2002. Some are even talking about

increased PR activity.



Kansas City-based Sprint PCS, for example, will be rolling out a new

generation of cell phone technology next year, an undertaking that will

require a major PR push, says Tom Murphy, VP of public relations at

Sprint. "As long as we continue to be a growth-oriented business, our PR

activity will continue to increase."



Similarly, Lee increased its PR spending this year as it tried to gain

market share in the highly competitive jeans arena. The company is

talking about maintaining the same spending levels next year. "We have

not scaled back at all for next year," says Kathy Collins, Lee VP of

marketing.



Other clients are more sanguine. Farmland Industries, a major

farmer-owned co-op in Kansas City, has been impacted by the downturn in

the agricultural economy, according to director of corporate

communications Sherilyn Manson.



Farmland cut its PR project load this year, trimming the frequency of

some publications sent to members. It also laid off one PR person,

functioning now with a staff of eight. Manson doesn't see any increase

in her PR budget for 2002. "We'll use the media more, rather than our

publications," she says.



Media relations, internal communications, and PR programs that can show

measurable results to CEOs concerned about another slow growth year will

be areas of emphasis in the coming year, PR people agree.



"The cuts come in intangible PR," says Dick Grove, president of Ink, a

$1.6-million pay-for-placement shop in Kansas City. "Media

relations, with an eye toward placements, tends to be the thing that

most clients want in this type of economy."



A measured approach



Fleishman, the 800-pound gorilla of the Missouri PR scene, actually

added some staff in the research area in its St. Louis office this year

as it rolled out new products designed to provide clients with better

measurement data. "Research is up over last year in the number of

people, and it's because of the need for accountability," says Senay.

St. Louis also serves as the firm's corporate headquarters.



Bill White, VP of corporate communications for Sprint (parent of Sprint

PCS), agrees that he has to find ways to measure and justify his PR

programs. "It's a much more bottom-line approach," he says.



This year, Sprint switched from Burson-Marsteller to Golin/Harris as its

corporate agency of record. White insists it wasn't a matter of going

with a low bid. "I don't think price dominates the discussion today," he

says. "I think service does."



Wheeler expects Boasberg/Wheeler to do about the same level of PR fees

this year as last - around $1.8 million. "We're very pleased to

hold our own this year," he says.



"We're not seeing people turn off their marketing communications

budgets, but they're certainly turning them down."



This summer, Wheeler had a major win: H&R Block's online endeavors, a

victory Wheeler thinks is helping him stay ahead of the Kansas City

market this year. "We're seeing layoffs at most of the agencies," he

says.



"We're not seeing wholesale cuts, but we're seeing trimming." Wheeler is

budgeting for a flat year in 2002.



And given the uncertainties hanging over the economy these days, most

Missouri firms would be happy to see that come to pass.



MISSOURI PR AGENCIES

Rank Firm Name Revenue Incr- Staff Location

2000 (dollars) ease

2000 (%)

1 Fleishman-Hillard 49,675,000 5 431 St. Louis

2 KPC Public Relations 5,520,780 19 NA St. Louis

3 Weber Shandwick Worldwide 3,834,000 4 29 St. Louis

4 Barkley Evergreen & Partners 2,361,763 5 22 Kansas City

5 The Standing Partnership 2,064,025 32 18 St. Louis

6 The Vandiver Group 1,935,663 22 19 St. Louis

7 DDC Advertising and PR 700,000 40 5 St. Louis

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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