ANALYSIS <b>The Agency Business:</b> The Agency Business: Agencies ride newest waves by branding specialty divisions

To stay competitive, many PR firms are creating new practices in which they offer clients their expertise in a particular area. But to stand out, firms must really know their stuff.

To stay competitive, many PR firms are creating new practices in which they offer clients their expertise in a particular area. But to stand out, firms must really know their stuff.

Catching the latest PR wave often means branding a new practice area. Agencies catch the wave these days by touting expertise on subjects like corporate governance, homeland security, offshoring, and litigation support. Firms wipe out, however, if credibility doesn't raise them above the pack. Investing in new practices makes the most sense when client companies find themselves ill-equipped to deal with emerging issues on their own, notes Patrick Ford, chairman of Burson-Marsteller's US corporate practice. Burson formed an environmental communications division in 1989 leading up to 1990's Earth Day revival, for example. "Lots of corporations didn't have fully developed points of view and capabilities in that area," Ford explains. Chicago's Dome Communications, on the other hand, builds niches around growing consumer groups and demographics, and gives them catchy names like Dome Drive (targeting teens) and Concepto (its Hispanic division). The obvious first step in creating a new specialty involves identifying an unmet need. Agency execs do this by keeping in touch with existing clients' concerns or by testing services in new markets. Peppercom, for example, is mining a new vein by pitching crisis communication drills to sports teams normally served by consumer-focused sports-marketing firms. Next, agencies must find specialized expertise in-house or recruit for it. "You can't fake it. You put your company at risk when you do that," says Paul Johnson, a regional president for Fleishman-Hillard in Washington, DC. "You can't just put a flag up and say, 'Today we're experts on something.'" In addition to hiring hotshot staff, some agencies form practice advisory boards. For example, Burson teamed with academics studying unions and activist campaigns against corporations when developing its labor-communications practice. Fleishman lined up Clinton drug-policy chief Barry McCafferty as a homeland-security adviser. Most firms wait to have relevant client work and a few case studies under their belts before publicizing and branding a specialty. Training employees also should come before public launches because new-practice offerings often can be most effectively sold to existing clients first. Some agencies use their own twists when unveiling new specialties. Peppercom managing partner Steve Cody favors co-branded surveys. After conducting a crisis-communication drill for the Anaheim Mighty Ducks hockey team, Peppercom posed relevant questions in a sports business journal. "Now we're going to quantify the need in a co-branded survey, then we will package what we've done with the Mighty Ducks," Cody explains. Others firms use speaking opportunities to plug new practices or build training seminars around them. Burson wants to partner with more law firms for training and conference opportunities because lawyers often refer business to its labor practice, Ford says. Execs warn that creating new specialties shouldn't hinder or be hindered by existing reporting structures. Cody, in fact, eschews traditional practice organization. In the dot-com days, Cody says, Peppercom established formal hardware/software, internet, and corporate practices. "They literally became agencies unto themselves. They were starting to morph our philosophies and our methodologies," he says. "We don't want politics. We don't want silos." Now, senior managers lead large accounts, and no one wields authority over specialties. New specialties also might gradually become integrated into other agency and client communication programs when business in general becomes more accustomed to the issues that spawned them. Burson's environmental practice is a good example, having eventually melded into its corporate social responsibility efforts. "The issues didn't go away," Ford says. "The companies developed very sophisticated in-house capabilities. Now, it's a part of everyday life." The origins of new practice areas
  • Agency: Burson-Marsteller; new practice: labor US corporate practice chairman Patrick Ford: "We could see that as union membership was declining across the country, the unions were becoming much more assertive in corporate campaigns and that this was an area that companies were going to have to gear up very quickly to deal with."
  • Agency: Fleishman-Hillard; new practice: homeland security Washington, DC, regional president Paul Johnson: "There are two ways in which practice groups are formalized. One that kind of grows up through the trenches would be something like litigation support. The other kind of practice group is a little more opportunistic. A recent example would be our homeland security practice. Frankly, where the money is can spark the development of a new practice and provide a competitive advantage."
  • Agency: Peppercom; new practice: pain-based selling Managing partner Steve Cody: "Clients said, 'Our sales force is marching to their own beat. Can you media train our sales force?'"

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