The new Old Dominion

Virginia is emerging from DC's shadow and has its own PR industry to boast about.

Virginia is emerging from DC's shadow and has its own PR industry to boast about.

They say Virginia is for lovers. That moderately edgy slogan most likely originated in the mind of a marketing pro who was inspired by gazing out at the boardwalk of Virginia Beach, or the lapping waves of Chesapeake Bay, or the extramarital affairs of politicians in the Northern Virginia suburbs.

In its own quiet but determined way, Virginia has emerged from the long shadows of the monuments of Washington, DC, to become a force to be reckoned with on the national PR stage. Business is booming, by all accounts, as agencies and clients flock to the federal dollars pouring into the northern part of the state and the several hot, stand-alone sectors clustered across the rest. In 2006, Virginia is prepared to stake its claim as a home to PR talent equal to that of many of the better-known major markets across America.

The agency world

Although it has long been considered a Washington offshoot, Northern Virginia is in breakout mode. Tracy Schario, president of the National Capital chapter of PRSA (which encompasses both DC and Northern Virginia), says many of her chapter members are focused heavily on certain business sectors in order to distinguish them from the public affairs-heavy DC field. "The job market is strong in Northern Virginia," she adds. "A lot of it is driven by Homeland Security money."

Schario, who is the head of media relations at George Washington University, says some government agencies seemed to pull back from PR after some of 2005's controversies. But chapter members tell her that strong markets in other fields like healthcare have more than made up for that caution. "With the increasing growth of Northern Virginia... healthcare PR is very strong," she says. "If I had to pick one industry to keep my eye on," that would be it.

Technology is also a strong sector in the area. One agency that has long been taking advantage of the nexus of politics, power, and technology firms in Northern Virginia is the Merritt Group, which has been based in Reston for the past decade. "There are a lot of established companies here, as well as emerging growth companies [and] international companies," notes agency CEO Ben Merritt. "[The Dulles corridor] is pretty rich with a large cross-section of different types of tech companies."

Partner Alisa Valudes also notes that an entire infrastructure of law and venture capital firms has sprouted up in the area, as well, setting it on the path to becoming the new Silicon Valley, even.

Merritt says his agency has tallied 25% growth for each of the past three years, and he sees no reason for that to slow in 2006. "The government market has always been a little bit insulated from some of the vagaries in the marketplace," he says. "The telecom sector, which was hard-hit here, has rebounded nicely."

Outside of the northern part of the state, Richmond is Virginia's most important market. Besides being the capital and home to most of the state-level public affairs work, the city is also home to some of Virginia's largest PR firms.

One of those is the Interpublic-owned Slay PR, which has been doing business with both national and regional clients for two decades. President Joe Slay calls business "pretty lively," but says the marketplace has become "fractured" lately, with competition from agencies large and small, in-state and out. "More of the work is transactional now, more project-oriented," Slay says.

The flow of government RFPs remains steady, and Slay notes upticks in other areas like travel and tourism, and education-related work. "Universities, year by year, are getting more sophisticated and competitive with their communications," he says.

Richmond's other heavyweight is Carter Ryley Thomas (CRT), which recently wrapped up its acquisition of Patrice Tanaka & Co. Agency CEO Mark Raper says the move of major corporations like Philip Morris and Wachovia into the area has opened up new opportunities for firms like his, not only in traditional standbys like IR and government relations, but also in their vigorous CSR practices. And while federal government contracts fluctuate on political whims, he says, state contracting is stable; schools like the University of Virginia, Virginia Tech, and William & Mary are upping their PR usage; and healthcare PR spending is on the rise.

With CRT being a nationwide firm, "We tend to compete almost exclusively with others from outside the market," Raper says.

Two years ago, Burson-Marsteller became one of the only major, owned agencies in the central Virginia market by opening a Richmond office. Ken Rietz, Burson's US CEO, says the move was "mainly to work with our clients there, but also to explore opportunities that may come up in North and South Carolina and Tennessee."

Kate Lipsitz, who heads the office, says that it has competed against local, regional, and national agencies and is handling four clients in the city. "We started out with two [employees]," she says. "Now we're at seven."

Outside of the major markets of Richmond, Virginia Beach, Norfolk, and the DC suburbs, the state is wide open for small PR firms to flourish. Suzanne Henry, who runs the boutique Four Leaf PR in Charlottesville, says there is so much work to be had that she and other small independents frequently refer clients to one another or band together to take on larger projects. "[Clients] are very much into finding talent and getting the best bang for their buck," Henry says. "It has very little to do with traditional structures."

The corporate picture

Virginia is home to dozens of Fortune 500 companies, ranging from telecom and defense contracting firms to retailers of auto parts or discount items. Some tap into the resources of local PR agencies, such as MCI's partnership with the Merritt Group. Others turn to more ubiquitous national firms for their national brands, like Richmond-based Circuit City's work with Fleishman-Hillard.

Defense contractor General Dynamics, the second-largest company in the state after MCI, doesn't use any Virginia agencies, preferring to handle its corporate PR in-house, according to VP of communications Kendell Pease. But other large corporations take advantage of more than one state firm. Virginia Beach-based AmeriGroup Corp., a healthcare provider, works with CRT, as well as Burson's DC and Richmond offices.

The decision to go with state agencies was motivated not only by the quality of work, but also by the advantages of geography, says AmeriGroup VP of communications Kent Jenkins. "They are proximate to us," he explains. "They have, historically, strength in consumer communications and marketing. It's a great fit. What they do not have is... a Washington presence."

That fact is common to most Virginia agencies outside of the northern part of the state: They are too close to DC to make it worthwhile for a separate office, but not close enough to be truly in the mix of day-to-day national public affairs work. This may hamper agencies seeking large, full-service corporate clients, who may prefer major agencies offering a more complete network of offices.

The local media

For local and regional clients, agencies often target the state's largest newspapers. They include The Virginian-Pilot (covering the Hampton Roads area) and the Richmond Times-
Dispatch
, which one PR pro calls "essentially a statewide newspaper." Virginia Business magazine is a well-read monthly that covers state business news.

National clients favor Gannett-owned and Virginia-based USA Today or The Washington Post.

Large TV and radio markets include Richmond, Norfolk, Roanoke, and Portsmouth.

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