Blurred borders

Varied business sectors and reemerging clients present opportunities and obstacles to PA and NJ agencies.

Varied business sectors and reemerging clients present opportunities and obstacles to PA and NJ agencies.

Standing in the shadow of New York City, yet at the same time basking in the glow of an economic recovery, PR pros in Pennsylvania and New Jersey are expressing a measured optimism about their current prospects. Clients are re-emerging, both from sectors the industry knows well, such as technology and financial services, and from fresh sectors PR firms heard little from before the downturn, such as the nonprofit sector in Western Pennsylvania. Pennsylvania has the largest rural population of any state in the Union.

Marc Jampole, founder and president of Jampole Communications in Pittsburgh, says people unfamiliar with the state should heed the old saying, Pennsylvania is Pittsburgh in the west, Philadelphia in the east, and Alabama in between.

 "You can divide Pennsylvania PR into two parts," Jampole says. "One is Philadelphia; the other is Pittsburgh. Much of our business is in Western Pennsylvania, which is a very different economy than in Philadelphia. ... Western Pennsylvania is not growing."

With Philadelphia increasingly a PR hub competing with New York, Chicago, and LA, the rest of the state has become a hub centered on Pittsburgh. (PRWeek will profile the Philadelphia PR market in the December 6 issue.)

But the slow pace of economic growth in Western Pennsylvania leaves PR firms there competing for clients from outside the region. Much new business is coming from beyond Pennsylvania's borders, from clients rolling out products in the mid-Atlantic region or that are setting up shop in the state.

The Penn Traffic Co. is a supermarket company based in Syracuse, NY, that operates BiLo Foods and Quality Markets throughout Pennsylvania. A Jampole client, its budget for PR has recently increased slightly, says Mary Anne Hankins, director of consumer and public affairs. Some of the new business in Western Pennsylvania is coming from nonprofits.

The hits taken by Pennsylvania industry and business during the recession have left these outfits with a disproportionate place in the state's economy, especially in the West. "Western Pennsylvania has lost a lot of business," Jampole says, "and because of it, nonprofits are bigger components of the economy than they used to be. But I've seen signs recently that tech is coming back and using PR services."

The recession triggered layoffs at several PR firms in Pennsylvania, most notably Ketchum, which laid off six employees late last year when its founding Pittsburgh office was placed under a Chicago-based leadership. These and other layoffs spawned a crop of freelance PR pros who have upped the competition for new business, says Robert Oltmanns, president of Skutski & Oltmanns in Pittsburgh.

"Whenever you have these kinds of recessions, you have downsizing," Oltmanns says. "And that leads to people freelancing, and, lo and behold, they hire a staff, and you have another small or midsize firm to compete with."

That same Ketchum office is hiring people, says Ketchum Midwest partner and director Adaire Putnam. Two people since January 1 have been added to the office, she says.

The hiring extends beyond Pittsburgh, too. At Sacunas & Saline in Harrisburg, five posts have been filled in the last six months alone, says president Nancy Sacunas. Two more positions remain unfilled, she adds, as the PR firm seeks to balance its everyday business with interviewing prospective talent.

"We're hearing from people that they have learned a lot about the value of PR during the upswing," Putnam says. "[They] had to curtail spending in every area, but now that they've got some resources available, they really remembered the value that PR delivered and are looking to us, in some cases, kind of above the other marketing disciplines. It's a fun time to be a PR person."

New Jersey PR rebounding
Sandwiched between Philadelphia and New York City, New Jersey has always occupied a unique position in the PR universe. Much of the state's PR industry is tied to the markets in those two metropolises.

Still, the Garden State's economy, say industry locals, has been outpacing the rest of the nation's in its recovery, and that has provided New Jersey with a faster rate of hiring and acquiring new business. "New Jersey's recovery has had a steady pace for quite some time," says Michael Cherenson, president of the Cherenson Group in Livingston, NJ. "But, still, obviously, our industry is tied to the economy overall."

 The job board for the New Jersey chapter of the PRSA has seen a recent rise in employers posting ads for employees, says Cherenson, a national PRSA board member. "Where we would go a month or two without any," he says, "now there's maybe a few a week."

Firms need the fresh talent for the new business. "We're in an aggressive hiring cycle at the moment," says Jim McQueeny, chairman of Winning Strategies in Newark.

Prudential Financial, one of New Jersey's largest employers and most lucrative companies, used the Cherenson Group for its Global Volunteer Day, when the Newark-based company's 30,000 employees fan out into local communities. Prudential uses outside PR firms for such projects, says Robert DeFillippo, VP of corporate PR, and otherwise does most of its PR in-house.

DeFillippo says he knows of anecdotal evidence about other regionally based companies bringing their PR operations in-house over the last year because of the recent slump. "Our PR budget and our use of PR agencies in New Jersey has remained pretty level," he says. "I know it's been difficult out there. I know a lot of companies have brought in their assignments from outside firms in-house."

But that is changing. New Jersey's multifaceted economy is helping the industry emerge from the economic funk, says Michael Kempner, CEO of the state's biggest PR firm, MWW Group. Hiring and revenue at the East Rutherford-based firm are both up over the past 18 months, says Kempner. "This is a multi-economy state," he adds. "It is not dependent on one particular sector of the economy or another.

So if you're a smart PR businessperson in New Jersey, you can ride different waves of the economy by focusing on different sectors. You're not bound like, say, Seattle with just tech." Kempner says MWW's status as a national firm with New Jersey headquarters gives it an interesting perspective on the state's PR market.

A lot of business generated by the state's economy provides opportunities for the PR industry, inside and outside of the state. "There is a tremendous amount of business that is funneled into the public relations industry from New Jersey," he says. "However, a lot of that business does not stay with New Jersey agencies. There are a lot of high-quality small agencies in New Jersey that tend to stay high quality and small year after year."

The fact is, clients are not wedded to having their agency in the same location as their HQ. As multi-office PR firms organize themselves as much by practice and expertise as they do by geography - if not more - then New Jersey and Pennsylvania corporations are not incentivized to go with a local agency. So here, as in many regions outside the country's major PR markets, new business flows from both within and beyond both states' borders.

In the case of this particular region, the agencies are often in direct competition with New York- and Philadelphia-based PR firms. "When I worked for an agency years ago, most of our work was Pittsburgh-related," says Ann Fisher, president of the Pittsburgh chapter of the PRSA. "The trend I see now is agencies whose work is outside the city. They are landing accounts that are not necessarily headquartered here."

"Some companies just need to have New York," says Jampole. "We do very well when we're in pitches against large companies from New York because we're able to demonstrate we've got the same quality, except our price is less."

With a belief in the continued economic recovery ensconced in their minds, PR pros in New Jersey and Pennsylvania say they can shrug off the doldrums of the past few years and continue a successful reemergence. "There's a renewed sense of optimism," says Cherenson. "I think it was wait-and-see. Now it's, 'Let's go do it.'"

Fact file New Jersey Population (2000) White: 66% Black: 13.6% Hispanic: 13.3% Asian: 5.7% Other: 8.1% Source: Census Bureau
Top public companies (2003) Johnson & Johnson Medco Health Prudential Financial Honeywell Merck Source: NJBiz
Employment by industry (2000) Educational, health, and social services: 19.8% Manufacturing: 12% Professional, management, administrative, scientific, and waste management services: 11.5% Source: Census Bureau
Pennsylvania Population (2000) White: 84.1% Black: 10% Hispanic: 3.2% Asian: 1.8% Other: 1.8% Source: Census Bureau
Top public companies (2003) AmerisourceBergen Corporation Alcoa CIGNA Comcast Rite Aid Sources: Hoover's and the Pennsylvania Department of Economic Development
Employment by industry (2000) Educational, health, and social services: 21.9% Manufacturing: 16% Retail trade: 12.1% Source: Census Bureau

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