REGIONAL FOCUS: New colors of New England PR - Long at theforefront of the East Coast tech boom, New England agencies aretransforming themselves and entering new markets, reports Robin Londner

It's fall, and the leaves of New England are a burnt rainbow of

colors, from orange to red to brown. Not surprisingly, the leaves mirror

the New England PR market - healthy orange agencies, big, red-hot

high-fliers, and slowly dying firms, turning brown before they expire

completely.



The agencies also parallel the autumn season itself. Like the

transitional season between the explosive growth of summer and the death

of winter, New England agencies are also in transition. For years,

hi-tech was the best game in town. Now, as hi-tech enters its winter

slumber, new contenders for agency dollars are rising - sometimes in

related markets, including biotechnology, medical devices, healthcare,

and hospitals. For example, new client wins at Fleishman-Hillard's New

England offices, which jumped from 27th to 4th in the rankings (partly

through the 2000 acquisition of Woburn, MA-based tech agency Lois Paul

and Partners), include EXACT Sciences and Aspect Medical systems.



Terry Frechette, AD at PerkettPR, explains the current mood in New

England: "If you can deal with the difficult hi-tech world, no other

market scares you. Nothing sharpens a PR person's pitching skills like

the complete failure of an entire marketplace."



Of the companies surveyed by PRWeek, only one, Greenough Communications,

spoke of a continued, confined focus on information technology and

telecommunications.



With 1,510% growth last year, and entry into the rankings at 21st,

Greenough says it has undergone no layoffs or closures, and, indeed,

claims to still be hiring. President Phil Greenough says the firm is

investing in interactive webcasting, and has recently signed contracts

with companies including Sonus, Framework, and Formation for tech PR

services.



Boston-based Cone closed its four-year-old, nine-person New York tech

office at the end of the summer as it opened a public affairs office in

Washington, DC. The agency continues its focus on cause marketing. Cone

has taken on work with General Mills' school cash donation program, and

Yoplait's breast-cancer charity work.



Broadening beyond hi-tech



But, to stay afloat, many agencies say they plan to broaden their client

bases beyond pure-play tech companies.



Citigate Cunningham, for example, used to profit primarily from Boston's

hi-tech companies. The agency, which debuts in the rankings at number

nine, still represents hi-tech firms: It holds the corporate and

software accounts for Sun Microsystems, as well as Sybase and other

hi-tech high-fliers. But Cunningham executives say the agency is also

moving into medical technology, biotech, and pharmaceuticals. Recent

client wins, however, are still tech-focused: ComVault and

iAnywhere.



"The principles are very similar," explains Kristin Hilf, SVP and MD of

the Boston office. "Both involve taking complex scientific issues and

advances, and communicating them as benefits, clearly, succinctly, and

effectively."



Andy Beaupre, EVP of Boston-based international tech PR powerhouse

Brodeur Worldwide, says the firm's technology expertise is taking it

into markets agency founders never anticipated in 1985. In addition to

services added on to tech clients during IPO fever (such as investor

relations offerings), the top-ranked firm prides itself on jumping into

markets that are technology-driven rather than technology-specific.



An example is new Brodeur client ABIOMED, the company that makes

AbioCor, the implantable, replaceable heart. Brodeur has also recently

signed Iron Mountain, a records and information management company.

Brodeur's New Hampshire arm signed marketing software company

MarketSoft, as well as internet infrastructure company Concord

Communications.



However, diversification hasn't been the answer to all Brodeur's

problems; the agency had to lay off 18% of its US staff earlier this

year, removing 60 employees from the payroll. The layoffs were in part

due to the general slowdown in PR, but IBM's $50 million PR

reshuffling was also a factor.



The company had been a major Brodeur client for the past 13 years.

However, in time, this loss may be mitigated by the fact that Brodeur is

part of Omnicom's One Blue team, which picked up the customer contact

part of IBM's PR needs.



Boston's multipractice agencies have been able to diversify the

quickest.



Schneider & Associates, for example, admits that its portfolio was

spotted with dot-coms last year. But new work in the last two months

includes the healthy marketing campaign for Subway sandwich shops, a new

product launch from shopping-cart company McCue Corporation, Capitas

Financial, and public affairs work for Quarry Hills (a company planning

to develop a recreation complex in Quincy, MA). While hard times have

forced the agency from a ranking of 18th in 1999 to 24th in 2000,

Schneider & Associates marketing director Jennifer Bonner remains

hopeful about the future.



"Our new client wins are as diversified as our specializations," says

Bonner. "During the height of the tech boom, we dipped our toe into the

dot-com area. But based on what we learned from being a real estate

marketing firm in the '80s, we were careful not to put all our eggs in

one basket."



In contrast to tech heavyweights Cunningham and Brodeur, each of which

laid off staff following the dot-bust, Bonner says Schneider &

Associates has had no layoffs.



The tea party's over



Home-grown behemoth, number-two ranked The Weber Group, part of Weber

Shandwick Worldwide (WSW), is another shop that plans to move beyond its

tech focus with its slimmed-down workforce.



"In anticipation of Weber Shandwick Worldwide's merger with BSMG, we

will be broadening both our client base and service opportunities," says

Jamie Parker, EVP and GM of The Weber Group. Parker says the tech

practice has seen declines in clients and staff, but says the agency has

seen growth in consumer, interactive services, public affairs, and

biotech and health services.



To fill office space left vacant by The Weber Group layoffs, sister

agency Miller/Shandwick moved from Boston to Cambridge in September 2000

to share space and resources. At the same time, Miller president Tony

Sapienza and EVP Kevin Rudden were both dismissed, and WSW appointed

Parker to head both agencies. At the time of the physical merger, the

receipts of both operations were down 25%, and both had laid off 25% of

staff across all levels.



Similar layoff figures across the region show that New England-based

agencies, like New England-based companies, are no different from their

brethren nationwide - pulling back on budgets, new product launches, and

other "non-essential" items.



Catherine Marenghi, principal of Marenghi Public Relations, which fell

to 26th in this year's rankings, says PR was often the first thing cut

by newly penny-wise corporations.



"Even when we make the case, the money just may not be there for PR,"

says Marenghi. "Competition for PR dollars is brutal, and not everyone

may survive."



Employee communications, however, remains a bright spot. Layoff fever

has workers scared. As one corporate PR manager explains, she doesn't

want employees searching job listings when their time, used

appropriately, would negate the need for layoffs.



Corporates are also looking to sidestep the expense of an agency of

record by assigning more project work. Some agencies are reacting to

that change in assignments by recasting their offerings. Brenda

Nashawaty, cofounder and principal of 17th-ranked Chen PR, says many

agencies now offer specialized, project-based services like plan

development and speaker training.



"We are starting to see more of a packaged or modular approach," says

Nashawaty. "These can be good ways to establish a relationship with a

client company. Once an agency shows value on a project, there is a good

chance it will continue getting projects and eventually be signed to a

retainer."



Indies fighting the industry standard



A trend bemoaned by many Boston independents is the decrease in the

power of locally owned independents. Of the top ten, only three are

independently owned and operated agencies: Schwartz Communications,

Sterling Hager, and Fitzgerald Communications. Fitzgerald laid off five

people earlier this year, Schwartz laid off 20, and Sterling Hager let

12 staffers go.



All four agencies say layoffs have matched agency talent supply to

industry demands, and they forecast a sunnier future for the beleaguered

tech market.



So as the New England leaves continue to fall, agency leaders hope the

roots are strong and wind-wracked boughs will not fall. But the question

remains: Will clients spend enough dollars to keep the trees healthy

through an uncertain winter ahead?



NEW ENGLAND PR AGENCIES

Rank Firm Name/Location Revenue Staff Increase

2000 1999 (dollars) (%)

2000

1 1 Brodeur Worldwide* 39,000,000 N/A 19

Boston, MA

2 3 Weber Shandwick Worldwide 30,584,002 162 20

Boston, MA

3 2 Schwartz Communications 26,984,202 181 62

Boston, MA

4 27 Fleishman-Hillard ** 21,495,000 161 1,778

Boston, MA

5 5 Ogilvy 15,291,100 NA 52

Boston, MA

6 9 Sterling Hager 12,926,715 93 58

Watertown, MA

7 10 Porter Novelli 9,675,000 N/A 22

Boston, MA

8 8 Fitzgerald Communications 9,584,159 N/A 5

Cambridge, MA

9 N/A Citigate Cunningham 8,825,100 47 62

Cambridge, MA

10 15 PAN Communications 8,724,000 N/A 74

Andover, MA

11 6 Cone 8,399,132 56 27

Boston, MA

12 N/A Regan Communications Group 7,300,000 32 12

Boston, MA

13 14 Earle Palmer Brown/PR 6,005,298 31 17

Stamford, CT

14 12 Manning, Selvage & Lee 5,526,191 38 -15

Boston, MA

15 16 The Rasky Baerlin Group 5,414,064 24 29

Boston, MA

16 18 BSMG Worldwide 3,982,150 14 18

Boston, MA

17 17 Chen PR 3,826,610 27 18

Boston, MA

18 N/A Rainier Corporation 3,217,490 N/A 42

Princeton, MA

19 N/A Bishoff Solomon Comm 3,159,100 25 55

Boston, MA

20 20 The Horn Group 2,986,136 18 33

Braintree, MA

21 N/A Greenough Comm Group 2,850,000 27 1,510

Boston, MA

22 N/A Text 100 2,612,711 16 93

Boston, MA

23 29 Edelman 2,510,652 17 210

Boston, MA

24 23 Schneider & Associates 2,260,738 15 24

Boston, MA

25 25 Jacobs & Prosek PR 2,041,449 12 27

Stratford, CT

26 28 Marenghi Public Relations 1,916,085 18 74

Boston, MA

27 26 Environics Communications 1,914,155 14 49

Stamford, CT

28 00 Emmanuel Kerr Kilsby 1,806,333 14 8

Stamford, CT

29 N/A The Jelly 1,693,000 15 N/A

Woburn, MA

30 N/A Duffy & Shanley 1,412,057 25 14

Providence, RI

*Includes Brodeur's Stamford, CT and Portsmouth, NH offices.

**Includes Fleishman's Providence, RI office.

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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