MARKET FOCUS: VIRGINIA - Virginia: tobacco to tech. A rural haven, just around the corner from DC, Virginia is now at the center of the Internet economy, and tech PR is hotter than ever. Steve Lilienthal reports

Not long ago the land adjoining I-66, which links Washington with Dulles Airport, was rolling farmland. Now, where horses grazed, tech workers gaze an online horizon. Virginians revere their past, but the state of George Washington and Thomas Jefferson once again is headquarters for a revolution whose consequences extend far beyond its borders.

Not long ago the land adjoining I-66, which links Washington with Dulles Airport, was rolling farmland. Now, where horses grazed, tech workers gaze an online horizon. Virginians revere their past, but the state of George Washington and Thomas Jefferson once again is headquarters for a revolution whose consequences extend far beyond its borders.

Not long ago the land adjoining I-66, which links Washington with

Dulles Airport, was rolling farmland. Now, where horses grazed, tech

workers gaze an online horizon. Virginians revere their past, but the

state of George Washington and Thomas Jefferson once again is

headquarters for a revolution whose consequences extend far beyond its

borders.



Now Virginia calls itself ’the Internet Capital of the World’ (iCapital

for short), and what is good for the technology business here is great

for PR.



The nearby federal government helped give rise to the Internet. But the

greatest spur was Steve Case, chairman and CEO of Virginia-based America

Online, who ignored naysayers to pursue his vision of a nation connected

by PCs. Case’s success has inspired many entrepreneurs in the state to

follow in his footsteps by starting up dot-coms and other Net-related

businesses.



’We’ve put to rest at Internet speed the image that Virginia is just

about tobacco farms and horse fields,’ says Virginia secretary of

technology Don Upson. Upson, a former marketing executive, is the

nation’s first-ever state chief information officer to be elevated to

cabinet rank.



Based in McLean, its business grew to 243% in 1998. O’Keeffe &

Associates, founded in May 1997, represents the state-sponsored Virginia

Center for Innovative Technology and the congressionally appointed

Advisory Committee on Electronic Commerce, chaired by Gov. James

Gilmore.



Reviewing recent employment trends, Michaela Platzer, VP of research at

the American Electronics Association, says, ’Virginia’s tech employment

appears to be growing much faster than some of the traditionally large

hi-tech states such as California, Washington, Texas and

Massachusetts.’



The Internet and telecom explosion has forced PR agencies to offer more

services. ’Now, we need to be able to address all the corporate areas

and investor relations,’ says David Swanston, president of the PR

division of McLean agency TMP/Stackig.



The hi-tech business is no-doubt responsible for the great success the

state’s PR firms are enjoying. Between 1997 and 1998, the 10 Virginia

firms that provided financial details to PRWeek averaged growth of 37%,

compared with the national average of 24%.



But Virginia’s economy has been booming in other areas too. Fortune 500

companies headquartered in Virginia include Circuit City, CSX, General

Dynamics, US Airways and Gannett.



Virginia is pushing economic development, staging a new marketing

campaign that proclaims the state is ’for business.’ Jill Lawrence,

communications manager for the Richmond-based Virginia Economic

Development Partnership, a state agency, says she regularly pitches

stories about Virginia with the help of the agency’s PR firm, Martin

Public Relations. Recently, a tour was staged for national and

international trade publications to promote Virginia as an attractive

site for automotive manufacturing. (Part of the agency’s challenge is

that its research shows many executives view Virginia more as an ideal

place to vacation rather than to conduct business.)





Competition



One thing Virginia PR firms are contending with is the interest that

large Washington, DC agencies are showing in northern part of the

state’s client base. Some even talk about opening Virginia satellite

offices.



For example, David Wickenden, Fleishman-Hillard senior VP and senior

partner in DC, says the agency is actively looking at the possibility of

opening a technology-oriented outpost in northern Virginia. Further

afield, FitzGerald Communications, based in Cambridge, MA, recognized

the potential of the state’s hi-tech market and opened an office in

Arlington in 1998.



The close ties to Washington are also reflected in the Virginia firms

specializing in public affairs and political PR. Northern Virginia has

become home to many associations. ’There’s still a lot of opportunity

for PR professionals in areas other than tech,’ maintains James Ashurst,

senior manager of communications for the American Society of Travel

Agents in Alexandria.



Smith & Harroff in Alexandria handles PR for trade associations,

corporations and Republican political candidates; clients include

Teligent, the Nuclear Energy Institute and the Aluminum Company of

Canada.



Principals in Alexandria’s The Hawthorn Group transferred their skills

in running political campaigns to a profitable enterprise advising

corporations and trade associations. Hawthorn chairman and CEO John

Ashford attributes his agency’s impressive 88% growth percentage between

1997 and 1998 to one large client, which he declines to name. Ashford

says Hawthorn’s new business wins since then have continued its growth

but at a slower pace, in the teens.



Another Alexandria agency with notable growth is Creative Response

Concepts, which grew 58% to dollars 2.4 million. The agency does a lot

of government-relations work for clients such as Visa, AT&T, Voter.com

and the Pharmaceutical Research and Manufacturers of America. It also

worked for Steve Forbes’ presidential campaign.



The largest Virginia PR firm, according to the PRWeek listing, is

Arlington’s Weber/McGinn, which resulted from a 1998 merger between

Weber Public Relations Worldwide and Ryan/McGinn, a lobbying and public

affairs outfit. Recently, the diversification-minded agency has brought

on board ex-politicians with names that have marquee value in DC. It

just acquired DC lobbying firm Barbour Griffith & Rogers, which is

headed by Haley Barbour, former chairman of the Republican National

Committee. A new division, G&L Strategies, headed by former Secretary of

Labor Lynn Martin and former Congresswoman Geraldine Ferraro, will

advise Fortune 500 corporations on issues involving women and

minorities.



The Weber Group, Weber PR’s technology arm, joined its sister agency in

Virginia last year to capitalize on the fast-growing Virginia tech

market. An added benefit is that the two entities can partner as more

tech companies need public affairs support.



Many agencies in the state offer integrated communications, and PR is

becoming a more important part of the mix. Rhonda Bergeron, account

supervisor at Herndon-based E. James White Co., contends the PR

component of her agency’s work (this year) is expected to at least

double. Karen Kennedy, president of Vienna-based KSK Communications,

estimates that PR has consistently represented about one-quarter of her

firm’s revenue. But the demand for PR has been going up over the past

six months. The reason? ’I’d guess that right now you’re seeing more in

start-up companies with limited dollars for marketing,’ she says. ’It’s

better to do a good comprehensive PR campaign for a start-up client than

a PR, advertising and marketing campaign that can’t devote enough

resources to any one thing.’



Further south, Richmond is an advertising and PR hub for the state. Mark

Raper, president and CEO of Carter Ryley Thomas, says there is an

emerging biotechnology scene in Richmond and public affairs there

remains strong.



’It’s surprisingly good for the size of the market,’ Raper says of the

city’s PR and support-services talent pool.





Tech, tech and more tech



Carter Ryley Thomas set up a tech practice - now its fastest-growing -

two years ago to serve not just clients in Virginia but also in Los

Angeles. It may open an office in northern Virginia.



Martin Public Relations, part of an advertising agency, is opening a

northern Virginia presence next month (it also has a New York

office).



’It could be one of our biggest offices given the potential of northern

Virginia to continue with fast-paced growth,’ comments Martin PR

president Joe Slay. Fee income at Slay’s firm went from dollars 4.8

million in 1998 to dollars 5.5 million last year (and 1998 had already

seen a 28% increase over 1997). ’Tech growth is a real plus, yet we have

a good brand portfolio,’ Slay says.



PR professionals in Virginia think the state’s importance as a PR center

will only increase.



’The formula is the Internet growth in northern Virginia plus the

Internet’s friendliness to PR,’ says Slay. Steve O’Keeffe, principal of

O’Keeffe & Associates, shares that view, suggesting the strategies and

tactics of tech PR will set the pace in the state for PR in general.





VIRGINIA: PR to handle the ’Internet capital of the world’


Rank    Company                               VA Income           Change

98  97                                      1998          1997         %

1   1   Weber/McGinn                   9,379,534     6,522,932        44

2   3   The Hawthorn Group             8,051,443     4,282,338        88

3   5   Martin PR                      4,816,246     3,772,008        28

4   2   TMP/Stackig                    4,570,721     4,291,270         7

5   4   Carter Ryley Thomas            4,460,000     3,960,000        13

6   6   Smith & Harroff                3,100,000     2,700,000        15

7   7   Creative Response

        Concepts*                      2,371,100     1,498,600        58

8   10  O’Keeffe & Co.                 1,386,495       404,000       243

9   9   Geddings & Phillips            1,300,000     1,100,000        18

10  8   Amann & Associates*            1,111,624     1,170,193        -5

        Totals                        40,547,163    29,701,341        37


Rank    Company/Location          US Income   VA %     US Income    VA %

98  97                                 1998   1998          1997    1997

1   1   Weber/McGinn             57,866,543     16    49,020,178      13

        Arlington

2   3   The Hawthorn Group        8,051,443    100     4,282,338     100

        Alexandria

3   5   Martin PR                 4,816,246    100     3,772,008     100

        Richmond

4   2   TMP/Stackig               4,570,721    100     4,291,270     100

        McLean

5   4   Carter Ryley Thomas       4,460,000    100     3,960,000     100

        Richmond

6   6   Smith & Harroff           3,100,000    100     2,700,000     100

        Alexandria

7   7   Creative Response

        Concepts*                 2,371,100    100     1,498,600     100

        Alexandria

8   10  O’Keeffe & Co.            1,386,495    100       404,000     100

        McLean

9   9   Geddings & Phillips       1,300,000    100     1,100,000     100

        Arlington

10  8   Amann & Associates*       1,111,624    100     1,170,193     100

        Glen Allen

        Totals                   89,034,172     46    72,198,587      41

Source: PRWeek Top 200.

Includes New York, Atlanta and Los Angeles offices *Denotes 1998 income

is based on audited information supplied by the Council of Public

Relations Firms.



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