REGIONAL FOCUS <strong>Canada: </strong>Breaking away

While some still see Canada as an add-on to the US, the country's PR and business scene is very much its own.

While some still see Canada as an add-on to the US, the country's PR and business scene is very much its own.

PR agencies used to accuse the Canadian offices of multinational companies of treating Canada like an extension of the US. Last year showed why that would be a mistake. Not only did Canada split from the US on Iraq, but also on social issues, such as gay marriage and marijuana possession. While President Bush called for a ban on same-sex marriage, Paul Martin's Liberal government introduced a bill to legalize such unions. The Liberals also reintroduced a bill to decriminalize marijuana possession, which would replace criminal charges with fines akin to those resulting from a traffic ticket.

Articles last year in The New York Times and The Washington Post addressed the growing division between the neighbors in terms of their social values, with Canada being viewed as more liberal. Multinational marketers are taking note. Seven years ago, furniture retailer IKEA consolidated its North American marketing strategy in the Plymouth Meeting, PA, head office. Last year, IKEA restored its Canadian marketing department.

And while McDonald's Restaurants of Canada works "very closely" with the US on its balanced-lifestyle communications, Richard Ellis, VP of communications and public affairs for McDonald's Canada in Toronto, says it exercises "a lot of autonomy." Case in point: A new line of menu items, called toasted deli sandwiches, is a Canadian-specific launch.

"We've seen over the past two years a dramatic increase in our PR budgets," says Ellis.

The Canadian PR industry is strong. The country's economy is expected to grow by 2.5% this year, according to the Conference Board of Canada, although the rising value of the Canadian dollar will hurt firms that sell to the US and other international markets because buyers might not want to pay higher prices for their goods and services. Marketers also had to think up new communications plans to replace those they would have launched around the National Hockey League (NHL), which, because of a labor dispute, has had its season wiped out. And media relations skills are more in demand than ever, as the media has become increasingly cynical because of a long-running government scandal. An inquiry is under way after an auditor's report revealed that CDN$100 million had been misspent in a federal government sponsorship program. The spotlight is on Liberal-friendly Montreal marketing firm Group-action, but there are a number of ad and PR firms that, the report said, received fees and commissions that benefited these companies more than they benefited the Canadian public.

The agency business

Look at the leading PR firms in Canada's three largest cities, and the one constant is National Public Relations, the country's largest firm, which chairman and CEO Luc Beauregard says grew revenues by 7% last year to CDN$43 million. Otherwise, it's not surprising to see different firms dominating different regions: In Montreal, it's firms with roots in French-speaking Quebec; in Toronto, where most offices of multinational companies have headquarters, it's offices of multinational PR firms.

In Vancouver, agencies specializing in crisis communication rose to the top. Just as British Columbia rebounded from SARS and mad cow disease, early last year it was hit by another outbreak, avian influenza, which threatened the CDN$1 billion-a-year poultry industry.

Vancouver's Wilcox Group guided 40 clients through the crisis. "Our mandate was to keep the consumer from not overreacting, like what happened with SARS and mad cow," says founder and principal Mat Wilcox. Buoyed by the success - sales of chicken-based products remained stable - an office Wilcox recently opened in Toronto has taken off, with nine staff and plans to grow to 20 by year end.

Cohn & Wolfe has seen a resurgence following a disappointing 2003, growing revenues last year by 50% and profits 25%, says John Crean, national managing partner for the Toronto and Montreal offices. The healthcare practice is working with Bayer to launch the world's first cannabis-laced prescription drug, Sativex. Health Canada expects to approve Sativex this spring for the treatment of pain and multiple sclerosis. C&W is now strategizing for the US. "The politics aren't minor, even in Canada," says Crean. "We have a variety of stakeholder interest from pro-marijuana liberalization to 'just say no' folks."

Agencies in Ottawa, Canada's capital, are struggling. The sponsorship inquiry has effectively paralyzed the awarding of government work. PR executives blame not only the inquiry, but the result of the election last summer, in which the Liberals were handed a minority government. "I have a competitive bid for a CDN$8,000 media relations contract. It's not to anyone's benefit that the government is asking for bids on work under CDN$25,000," says Jonathan Goldbloom, VP at Optimum Public Relations, the PR arm of Cossette Communication Group.

The corporate world

For corporate communication VPs at some of the country's biggest brands, the major issue wasn't the high value of the Canadian dollar hurting exports or concerns about a minority government. It was the loss of NHL hockey, which for many marketers represents a major way brands communicate with men. Unlike in the US, NHL hockey scores huge TV ratings in Canada and NHL-themed PR programs are generally very successful. Last spring, BMW Canada outfitted two red and black Minis with the decals of the Calgary Flames to celebrate the team's Cinderella run to the Stanley Cup finals. Kevin Marcotte, BMW's corporate communications manager, says it turned into "one of the most successful PR programs ... in terms of media exposure," picking up coverage not only in the Canadian media, but even as far away as ABC News in Tampa Bay.

Companies that were to sponsor the NHL this year included Esso/Imperial Oil and Home Depot Canada. Imperial Oil is instead trying to leverage its relationships with community-driven hockey programs, such as one that promotes minor hockey in Quebec. And Molson Canada won positive buzz by launching a campaign called "Hockey, Please Come Back." In the monthlong promotion, which ran in Ontario, Calgary, and Edmonton, more than 5,000 fans called a toll-free support line, 866-MISS-HKY, created by the brewer. "It was very successful from a PR perspective," especially because it wasn't promoted with mainstream advertising, says Nathalie Masse, manager of corporate affairs at Toronto-based Molson.

Consumer tech players are also active in the PR field. C&W won Nintendo over 13 other firms, and Sony Computer Entertainment Canada hired Toronto's Maverick Public Relations to launch in Canada the PlayStation Portable console. Perhaps the most anticipated launch is that of Virgin Mobile Canada, which hired Hill & Knowlton for it. Nathan Rosenberg, chief marketing officer, and president Andrew Black, a former marketer for Dr Pepper/7Up, say they plan to "legitimize" the prepaid cell-phone market.

Navigating the media

Canadian media continues to be concentrated in the hands of a few players. Winnipeg-based CanWest Global Communications, for example, owns the National Post newspaper, as well as 13 other daily newspapers across the country and 48 daily and weekly papers in smaller communities; 11 TV stations in eight provinces; and internet portals canada.com and globaltv.com. Ownership is dominated by domestic companies because of restrictive media-ownership laws that prevent foreigners from buying a controlling interest in Canadian media, although lobby efforts are under way by interested parties to change those laws.

Bob Reid, chief media strategist at Veritas Communications in Toronto, says media consolidation can prove especially beneficial for clients who might have a hard time getting the attention of a reporter at a major daily. He says such clients can approach a reporter at a smaller daily, with the hopes of having the published story picked up in more prominent papers.

CanWest this month will launch a free commuter paper. Such newspapers, mostly distributed free in cities with extensive transit systems, have a high number of youth readers. In Toronto, readers already can choose between Metro (owned jointly by Swedish-based Metro International and Torstar, publisher of the Toronto Star) and 24 Hours (owned by Sun Media, publisher of the Toronto Sun). CanWest will debut its entry, Dose, in Vancouver, Calgary, Winnipeg, Toronto, and Ottawa. "The commuter newspapers are particularly popular with high-school kids," says Reid, adding that Dose gives marketers another vehicle to sell quirky or youth-driven story ideas - and, perhaps, another way by which to spread a story through a media network.

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