MARKET FOCUS OHIO - PR bucks in Buckeye State - Ohio PR pros work in a cloistered PR scene. Now, two national PR agencies have moved in What happens next as local economy changes?

Think of Ohio and you think of old-line industries churning out obsolete products and pollution, right? Not these days.

Think of Ohio and you think of old-line industries churning out obsolete products and pollution, right? Not these days.

Think of Ohio and you think of old-line industries churning out

obsolete products and pollution, right? Not these days.



Ohio’s business base has transformed itself. ’It’s no longer

characterized by manufacturing and heavy industry like back in the days

of the Rust Belt,’ notes Mark Nylander, EVP and GM of Liggett-Stashhower

Public Relations in Cleveland.



In 1990, service jobs accounted for only a slightly larger share of the

state’s job base than manufacturing. But last year, services had

increased that lead substantially, accounting for roughly 1.5 million of

the state’s 5.6 million jobs. Manufacturing accounted for just over 1

million, with retail trade about the same.



Statewide, the biggest locally based employer is supermarket chain

Kroger Co., headquartered in Cincinnati. Long-time Ohio companies such

as B.F.



Goodrich and NCR (once known by the now archaic sounding National Cash

Register) are transforming themselves into companies that can survive

and prosper in the changing US marketplace. The two largest employers in

Cleveland, a city once known for Lake Erie’s industrial pollution, are

healthcare providers.



The rejuvenation of Ohio’s economy - unemployment stands at roughly 4.2%

compared with 6.3% at the start of the ’90s - has been good news for

Ohio PR firms. Major operations in Cleveland, Columbus and Cincinnati -

the three key metro areas - are expecting double-digit growth this

year.



The PR pros in these cities see that growth coming from many places:

old-line companies looking for help in crafting messages about what they

have become; technology start-ups proliferating in Ohio; the growing

healthcare and financial services industries and the public affairs

arena.



In the private sector, PR pros expect more business from Ohio-based

consumer goods companies that increasingly are turning to PR to reach an

ever-more-fragmented consumer market.



The move by such companies as Cincinnati-based giant Procter & Gamble

and Columbus-based family restaurant chain Bob Evans Farms to do more

local marketing, which includes local PR work, ’reflects the

fragmentation of the national media,’ says Charlotte Otto, global public

affairs officer with P&G. For Evans, when it opens a new restaurant in a

locality, it’s ’looking at being ingrained in the community’ and uses

local PR to achieve that, says Mary Cusick, VP of corporate

communications.



As for public affairs, the onset of state-mandated term limits for

elected officials has many firms expecting a bonanza of lobbying work;

interest groups will scramble to get their points across to new

legislators brought in as term limits force out long-time pols. Indeed,

to go after the business it expects to emerge in the state capital,

Northlich Public Relations in Cincinnati has formed a public affairs

joint venture, called Groundswell, with lobbying firm State Street

Consultants in Columbus, says Rick Miller, managing director at

Northlich.



’With term limits, the ability to persuade will be much more

information-based and not just relationship-based,’ explains Jan Allen,

president of Columbus’ HMS Success Public Relations, a firm that does

public affairs work.



Another major PR plum is expected to be work awarded by the state’s

public utilities commission to educate consumers about energy

deregulation in 2001. Total spending on the campaign, including

advertising and PR, is projected at about dollars 33 million over two

years. While most of that is going to advertising, the PR chunk is

expected to exceed dollars 3 million. (PRWeek, Jan. 24, 2000)



National Attention



Some wonder if positive PR prospects in Ohio will draw more outside

competition.



Right now, not many of the large national agencies are in the state.

Fleishman-Hillard last year bought Watt, Roop & Co., then the

third-largest firm in Cleveland. Early this year, Golin/Harris took on a

Cleveland office with plans to add people there. Minneapolis-based

Bozell/Kamstra, which is owned by Bozell Worldwide, has an outpost in

Cleveland with 35 people, only a third of whom do strictly PR (Sherwin

Williams is a major client).



Until those moves, the state’s PR business had been relatively immune

from outside takeovers or incursions. True, major companies like P&G

routinely looked to New York or Chicago for their lead PR agencies. But

there’s enough business below that top tier, in addition to project work

from even the largest companies, so that Ohio PR firms can grow.



’The big companies use the nationals out of their headquarters’

offices,’ confirms Tom Schick, who coordinates the PR program at Xavier

University and just finished a term as president of the Cincinnati PRSA

chapter.



But ’you drop down to the next level (of corporations), and there’s a

great loyalty to the locals.’



More often than not, ’local’ for Ohio means in the same metro area.



’We have grown up as communities and business centers quite separate,’

notes Otto. Adds Chan Cochran, president of Cochran Public Relations in

Columbus: ’Ohio is really three or four very distinct states.’ There is

the industrial belt in the northeast, the rural farm economy in the

central and western parts of the state and Cincinnati in the south.



Cleveland



The state’s PR scene last year varied by market. The major Cleveland

agencies, preoccupied by management transitions and acquisitions, are

not reporting major jumps in business. Those firms include Dix & Eaton,

with 1998 PR income of roughly dollars 8.5 million, and Edward Howard,

with roughly dollars 5.8 million in 1998.



Edward Howard officials say they don’t have 1999 results as yet, but

outgoing chairman Stanley L. Ulchaker calls last year’s performance

’solid.’ The company added such major clients as Rubbermaid. ’They felt

they wanted to have the comfort of an agency nearby,’ explains Kathy

Obert, who on March 1 becomes president and CEO at Howard.



Dix & Eaton saw modest growth last year but had not been focused on

that, says CEO Scott Chaikin. The company completed an employee buyout

last June as its long-time scion, Henry Eaton, retired. From 1997 to

1998, the agency experienced 14% growth in billings, to dollars 8.5

million, according to the PRWeek Top 200 survey.



Fleishman’s Cleveland operation had 1998 income of about dollars 3.1

million and dollars 3.5 million in 1999, says Ron Watt, who sold his

firm to Fleishman last year and now runs the Cleveland office. The deal

caused Watt to take his eye off growth last year, he admits, but this

year he expects to expand to the dollars 6-million level, nearly

doubling the firm in size.



Columbus



In Columbus, major players include Lord Sullivan and Yoder Public

Relations, with about dollars 3 million in 1999 revenues, up from

dollars 2.6 million in 1998, roughly 15% growth. The company expects

growth in the mid-20% range this year, says Neil Mortine, president and

COO. Other key Columbus agencies include Cochran’s shop and HMS Success,

which do not release revenue figures, and Paul Werth & Associates.



HMS is only about a year and a half old, created by an ad firm, HMS

Partners, and a PR operation formerly known as The Success Group. All

its principals have backgrounds in government, says Allen. It has about

a dozen employees and roughly 30 clients around the state.



Cincinnati



Cincinnati’s PR scene is dominated by Northlich, which saw a 25% jump in

its PR fees last year to roughly dollars 4.2 million; Dan Pinger Public

Relations with 46 staffers; and the recently renamed HSR

Business-to-Business, an integrated communications company. ’There is a

new appreciation for business-to-business marketing’ among Ohio

companies, notes Steve Kissing, who heads up the 19-person PR operation

at HSR. Kissing expects to double his staff this year. HSR estimates its

overall revenue at dollars 11 million but doesn’t break out PR

income.



Observers wonder how long Ohio’s PR parochialism can survive in a PR

business becoming increasingly national and international.



The native-born agencies don’t have many branch offices. Today, only

Edward Howard & Co. maintains offices across the state. But other

agencies have started to move beyond their local markets in the state

and have out-of-state clients as well. HMS Success does considerable

public affairs work in Cincinnati, for example. And Northlich got the

attention of some state PR pros with its decision to start the

Groundswell joint venture.



DanPinger PR has reorganized into five practice groups - consumer

branding, community/public affairs, transportation/infrastructure, IR

and business-to-business - to better serve its roughly 60 active

clients. It sees growth coming this year from cross-selling services to

existing clients while also expanding its client base toward Dayton and

into Kentucky cities such as Louisville and Lexington, says Ellen

Knight, a VP who heads up the business-to-business practice. Pinger

often finds itself competing with New York-based agencies, even for

business from new companies, she says. ’A lot of really growing

companies feel they are making the safe bet by going with a New York

agency.’



But old habits die hard in this state, as major corporations find they

like having PR help nearby. Mike Monroe, EVP of public affairs at

Cleveland-based banking firm KeyCorp., works with several agencies,

including Dix & Eaton. ’I’ve been very impressed with the quality of the

(PR) talent’ in Ohio, says Monroe, who joined KeyCorp last July after 16

years with Philadelphia’s Cigna Corp. KeyCorp, in the midst of a major

business restructuring, has reorganized its internal PR into one public

affairs unit. Also, ’KeyCorp is looking to increase its proactive

programs and activities extensively at the product/services level,’

Monroe notes.



Those types of efforts could mean more local PR - and that’s the way

Ohio PR firms want to keep it.



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