Market Focus Chicago - e-cago, e-cago - Chicago's infrastructure reputation endures - but now it's a center for hi-tech infrastructure companies. John Frank explores the Windy City

Once called hog butcher to the world, Chicago is striving to win a new title these days - technology PR capital of Middle America. Windy City PR shops large and small are flush with new business, reporting year-to-year gains of 50% to 100% in tech income.

Once called hog butcher to the world, Chicago is striving to win a new title these days - technology PR capital of Middle America. Windy City PR shops large and small are flush with new business, reporting year-to-year gains of 50% to 100% in tech income.

Once called hog butcher to the world, Chicago is striving to win a new title these days - technology PR capital of Middle America. Windy City PR shops large and small are flush with new business, reporting year-to-year gains of 50% to 100% in tech income.

But the Windy City always has liked doing things a little differently than the coasts. While tech PR in Silicon Valley or Boston may have a heavy dot-com flavor, Chicago's tech PR is coming to mean a wide range of PR assignments that have a tech edge to them.

Sure, there are dot-com start-ups, although the pace has slowed (as it has elsewhere) since the tech stock plunge earlier this year. The dot-coms coming to Chicago shops these days are looking for more than just media coverage to ensure a good price once they go public. Instead, whether it's IR or PR, they want a wider range of brand-building services.

'It's not about buzz, it's about brand,' says Scott Farrell, EVP of corporate communications at Golin/ Harris International. Looking at the IR side of the business, Tad Gage, an SVP with FRB/BSMG, says, 'As IR consultants, we're finding ourselves drilling down more deeply into a company's business.

It can't just be about the pretty, shiny car on the showroom floor anymore.'

Expanding technology base

Beyond dot-coms, Chicago tech PR also involves old-line companies making the transition to a new electronic world. Such long-time stalwarts as Encyclopaedia Britannica, W.W. Grainger and RR Donnelly are betting on Internet strategies and need PR support to back up those bets.

The healthcare services arena, another bulwark of the Chicago business scene, also is increasingly becoming a technology business. PR is grabbing accounts on that front as well.

'There are very few companies today that do not have technology as a central play in how they deliver products or services to market,' says Paul Rand, president of Corporate Technology Communications. CTC expects to bring in dollars 7.5 million from its Chicago office this year and dollars 10 million for the firm as a whole compared to dollars 4.6 million last year. Its clients include software, hardware, biotech and nontech companies with strong technical components.

Electronics giant Motorola, while not thought of as Internet star, is a force in the wireless phone world, an area that is increasingly colliding with the Net. Edelman PR offshoot PR21 started with Motorola as its foundation client and today also works for such telecom players as Sprint PCS. It's grown from about 45 people at the end of 1999 to 65, picking up clients in telecom, business-to-business infrastructure and the wireless world, says Paul Battaglia, EVP and GM. Battaglia notes that 75% of business is technology PR.

Tech PR assignments in Chicago are coming from companies on the infrastructure side of e-commerce and technology. Chicago and its surrounding states have always been infrastructure suppliers, whether as the railroad hub or the source of earth-moving and heavy equipment and trucks from Caterpillar and International Harvester.

Today, infrastructure means the software and hardware that runs the Net and also company IT centers and wireless phone networks.

Mike Nikolich has built his seven-year-old suburban Chicago PR shop, Tech Image, into a firm of dollars 2 million in fees this year thanks largely to such infrastructure clients. 'That's one of the bread and butter things in Chicago,' Nikolich says of tech infrastructure suppliers.

Chicago's tech PR potential has brought at least one new player into the market. Cunningham Communication opened a Chicago office this year and expects to have 60 people there in less than two years, says president Joe Hamilton. 'Chicago's been on our minds for a long time. It has a number of strong, mature technology companies.' Cunningham also has worked with Motorola and Platinum Technology, the former company of Flip Filipowski, who now runs Divine InterVentures, a Chicago-based tech incubator with its own marketing firm, Buzz Divine.

Porter Novelli earlier this year bought local tech shop EBS PR to plug into the tech PR scene. Porter Novelli Convergence Group expects its Chicago office to grow from dollars 5.5 million last year to dollars 11 million in overall PR fees this year.

Almost all the big PR shops in Chicago are going after tech business.

Edelman Public Relations, Fleishman-Hillard, Ogilvy, Hill & Knowlton, Ketchum and Golin Harris routinely run into each other in new tech business pitches.(Burson-Marsteller, organized by practices, handles tech from another location.)

H&K's Chicago office has 22 people working on tech, about one fifth of the staff, which includes six other practices. In May, H&K snared Motorola's global PR business, a multimillion-dollar account. It's also garnered business through its sister agency, Blanc & Otus, finding some West Coast tech companies would rather deal with agencies elsewhere. 'We're finally seeing a greater realization of where you can practice good tech PR,' says Gene Reineke, head of H&K's Chicago office.

Ogilvy's Chicago office expects its overall PR fees this year to rise 50% from last year's dollars 4.3 million, with the largest chunk of its business (45%) coming from tech work compared with only 25% in 1999.

Fleishman-Hillard's Chicago PR fees will reach nearly dollars 13 million this year compared with dollars 6.9 million in 1999. 'Some 60% of our growth is technology driven,' says Bob McEwen, Chicago GM.

Ketchum expects its Chicago office to realize dollars 8.5 million in fees this year with about half coming from its corporate and technology practice, says SVP Mike Hatcliffe. Early in the year, Ketchum was flooded with dot-com calls. While that's slowed, work from software and other tech clients has kept business booming.

The rush of activity has meant a battle for tech talent. Salaries have gone up accordingly, with VPs bringing in dollars 90,000 and account supervisors in the upper dollars 50,000-dollars 60,000 range. 'There is a war on for talent right now,' says Amy Hesser, an Ogilvy VP who left Tech Image to join Ogilvy.

Howard Solomon, MD with Ruder Finn, recalls that when he came to run the Chicago office three years ago, an account with a dollars 5,000-dollars 10,000 monthly retainer was considered average. Today firms routinely get accounts in the dollars 25,000-a-month range. That's less than firms with a maily West Coast focus charge, and as a result Chicago firms are garnering spill-over business form West Coast companies looking for a different approach to tech PR.

Solomon sees his office bringing in dollars 3 million in PR fees this year compared with dollars 1.6 million last year, with tech being a major driver. Earlier this year he created an emerging technology practice to help him garner more tech work.

Can it last?

Tech PR business has been so good in Chicago, some already are predicting a shakeout. Too many firms are going after business without the experienced people to do the job, contends Jim Martinez, president of PR at Kemper Lesnick. 'An awful lot of hi-tech PR here is on-the-job training,' says Martinez who was running H&K's Chicago tech operation before joining Kemper Lesnick last year and bringing in dollars 1.7 million in tech PR business since his arrival.

Martinez says he sees a lot of tech companies 'that have gone through one, two or three firms' unhappy with the PR support they're getting.

'We're starting to see the first glimmers of a shakeout.'

From the numbers they're showing this year, it's hard to see any firm ready to drop out of the Chicago tech PR race, but tech veteran Martinez thinks some of the big firms touting how they can transfer brand-building expertise to technology may eventually come up short. 'Doing technology PR is not like pitching more corn chips,' he scoffs.

Others are equally cocky. Brian Connolly, SVP and head of Ogilvy's Chicago tech group, says he considers Fleishman, Ketchum and Porter Novelli his competitors. Asked about such firms as PR21 or Edelman, he jokes, 'We play softball against them.'

Tough talk, but, of course, Chicago is known for that - that's how it got its Windy City nickname more than a century ago. And these days, Chicago shops are backing up their tough talk when it comes to tech PR with rising income and a rosy outlook for more to come.

RANKINGS: CHICAGO PR AGENCIES

                                                       Total         Chi

Rnk     Agency Name    Chicago income (dlrs)    Growth income (dlrs) %

99  98                 1999         1998        (%)    1999          99

1   1   BMSG           34,811,442   29,930,700  16     122,062,000   29

2   2   Edelman        34,687,069   27,752,746  25     128,174,735   27

3   3   Golin/Harris   22,579,451   18,800,000  20     55,100,751    41

4   4   Burson-

        Marsteller     22,019,000   17,339,000  27     164,850,000   13

5   N/A Hill &

        Knowlton       7,300,000    N/A         N/A    138,140,000   5

6   5   Ketchum        7,285,000    6,938,000   5      123,630,000   6

7   7   Fleishman-

        Hillard        6,855,000    5,232,000   31     181,152,000   4

8   8   Porter Novelli 5,532,000    4,701,000   18     106,606,000   5

9   N/A Publicis

        Dialog         4,954,860    N/A         N/A    23,505,716    21

10  10  Manning,

        Selvage & Lee  4,334,000    3,927,600   10     62,628,000    7

11  19  Corporate

        Technology

        Comms.         4,280,000    1,367,000   213    4,645,000     92

12  6   Ogilvy         4,251,000    6,765,000   -37    92,220,200    5

13  N/A Cramer-

        Krasselt       4,133,000    N/A         N/A    9,074,000     46

14  N/A GCI-

        Dragonette     3,517,906    N/A         N/A    65,511,850    5

15  9   PCI            3,433,332    4,129,841   -17    5,062,674     68

16  11  HLB Comms.     3,400,300    3,720,000   4      3,400,300     100

17  18  PR 21          3,281,490    1,478,999   122    7,047,625     47

18  N/A Gibbs & Soell  3,001,000    N/A         N/A    12,793,000    23

19  12  L.C.

        Williams &

        Associates     2,554,713    2,820,304   -9     2,554,713     100

20  15  Grant/Jacoby   2,466,748    2,100,000   17     2,466,748     100

21  13  The Weiser

        Group          2,150,000    2,600,000   -17    2,150,000     100

22  17  Dome Comms     2,100,000    1,600,000   31     2,100,000     100

23  16  Cushman/

        Amberg Comms.  2,075,748    2,100,000   -1     2,075,748     100

24  21  Donnellon PR   1,773,232    1,050,835   69     1,773,232     100

25  20  Ruder Finn     1,640,000    1,330,000   23     53,408,000    3

26  14  Cohn & Wolfe   1,637,000    2,564,000   -36    30,230,000    5

27  22  The MWW Group  1,298,603    993,696     31     27,002,400    5

28  23  JSH & A        1,170,700    679,700     72     1,170,700     100

29  N/A Incepta

        (Citigate)     1,142,323    N/A         N/A    23,509,066    5

30  N/A The Investor

        Relations Co.  611,614      N/A         N/A    656,000       93

31  24  Kratz &

        Jensen         267,093      336,672     -21    7,747,369     3

        TOTALS         175,882,921  150,257,093 17     1,189,258,195 15

Rnk     Agency Name              Total income (dlrs)  Chi %   Location

99  98                           1998                 98

1   1   BMSG                     109,573,000          27      Chicago

2   2   Edelman                  101,868,218          27      Chicago

3   3   Golin/Harris             48,500,000           39      Chicago

4   4   Burson-Marsteller        142,815,000          12      Chicago

5   N/A Hill & Knowlton          113,000,000          N/A     Chicago

6   5   Ketchum                  101,485,000          7       Chicago

7   7   Fleishman-Hillard        136,272,000          4       Chicago

8   8   Porter Novelli           79,522,000           6       Chicago

9   N/A Publicis Dialog          11,403,700           N/A     Chicago

10  10  Manning, Selvage & Lee   50,173,300           8       Chicago

11  19  Corporate Technology

        Comms.                   1,367,000            100     Chicago

12  6   Ogilvy                   54,457,700           12      Chicago

13  N/A Cramer-Krasselt          8,160,000            N/A     Chicago

14  N/A GCI-Dragonette           44,539,245           N/A     Chicago

15  9   PCI                      5,699,252            72      Chicago

16  11  HLB Comms.               3,270,000            100     Chicago

17  18  PR 21                    3,509,305            42      Chicago

18  N/A Gibbs & Soell            11,689,000           N/A     Chicago

19  12  L.C. Williams &

        Associates               2,820,304            100     Chicago

20  15  Grant/Jacoby             2,100,000            100     Chicago

21  13  The Weiser Group         2,600,000            100     Chicago

22  17  Dome Comms               1,600,000            100     Chicago

23  16  Cushman/

        Amberg Comms.            2,100,000            100     Chicago

24  21  Donnellon PR             1,050,835            100     Chicago

25  20  Ruder Finn               45,601,000           3       Chicago

26  14  Cohn & Wolfe             25,982,000           10      Chicago

27  22  The MWW Group            17,220,267           6       Chicago

28  23  JSH & A                  679,700              100     Oak Brook

                                                              Terr.

29  N/A Incepta (Citigate)       11,403,000           N/A     Chicago

30  N/A The Investor

        Relations Co.            712,000              N/A     Northbrook

31  24  Kratz & Jensen           6,192,972            5       Chicago

        TOTALS                   946,458,853          16

Source: PRWeek 2000 Agency Rankings Auditing:  denotes a full audit or

review;  compilation audit;  unaudited statements approved by either the

CFO or CEO/partner. A random audit process will be used for agencies

providing unaudited figures.





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