European Report: PR Markets

Rob Gray takes a look at the differing health of the PR markets in Germany, Austria and the Czech Republic.

GERMANY

Chancellor Gerhard Schroder's surprise decision to call an early general election this year is the big story of the moment. Whatever its outcome, Germans are hoping it will clear the air of the negative mood that has afflicted the country in recent years - the economy has been sluggish and unemployment above five million has led to much soul-searching.

'PA is the strongest growth market in Germany,' says Molthan van Loon Communications Consultants managing partner Dietrich Schulze van Loon.

'It is a relatively young discipline in Germany. There is no comparison with the historic role of PA in the UK and the US.' Corporate communications is still going strong and there appears to be plenty of scope for CSR and corporate governance-related projects. In 2006, Germany hosts the World Cup, and the expectation is that this will precipitate a marketing boom.

'There is a crisis feeling among people and media,' says FischerAppelt Kommunikation managing director Andreas Fischer-Appelt. 'PR is picking up stronger than advertising.

The World Cup will bring a fast growth of comms in the home market.'

Dikom managing director Lutz Cleffmann sees recovery in the PR industry and points to growing demand for strategic cross-border programmes, with a special focus on the new EU members in central and eastern Europe, which German companies consider to be part of their 'natural' home market.

Pleon is aiming to become the first worldwide PR network based in continental Europe - namely in Dusseldorf.

TOP FIVE GERMAN CONSULTANCIES

Rank Company Fee income 2004/2003 Growth

(pounds) (%)

1 Pleon Kohtes Klewes 21,885,600 n/a* n/a

2 Media Consulta Deutschland 14,364,912 n/a n/a

3 Hering Schuppener Gruppe 9,948,000 8,114,153 27

4 FischerAppelt Kommunikation 8,798,010 8,788,336 0.1

5 Trimedia Communications

Deutschland 7,471,520 n/a n/a

All figures relate to year ended December 2004. Fee income = PR fee only.

Data supplied by neues-prportal.de. Exchange rate conducted 16 June 2005;

*figures not available

AUSTRIA

Almost all the top 15 PR agencies in Austria posted positive income growth last year. Although the rises tended to be modest they were very welcome following a couple of tough years. Top-ranked Pleon Publico lifted fee income by 2.3 per cent to more than EUR10.5m (£7m), while number-two agency Hochegger grew its income by five per cent to EUR9.1m (£6m).

Many client companies consider Vienna to be the gateway to eastern Europe and this is expected to trigger agency business as corporations expand their presence in the Austrian capital and treat it as a regional hub, although some of this has been slower in materialising than was expected in some quarters two or three years ago.

'Austria is focused heavily on central and eastern Europe (CEE) because of its geographical position,' agrees Trimedia global CEO Michael Murphy.

'While there are attempts from Prague and Warsaw to become the centre of CEE, there are a lot of international and Austrian companies investing very heavily in Vienna. We expect that to continue.'

Former Publico chief Wolfgang Rosam is to launch a consultancy bearing his name this autumn, which will specialise in 'change communications'.

Markus Schindler, Harald Mahrer and Claudia Muller-Stralz now run Pleon Publico.

Christian Kollmann, managing director of ECCO member Communication Matters, says there are signs of stronger growth for 2005. The public sector, he adds, is making increasing use of professional comms, while crisis comms and media training are 'big growth sectors' for Austrian agencies.

TOP FIVE AUSTRIAN CONSULTANCIES

Rank Company Fee income 2004/2003 Growth

(pounds) (%)

1 Pleon Publico 7,004,468 6,845,105 2.3

2 Hochegger I Com 6,072,430 5,780,000 5

3 Trimedia 4,014,175 n/a n/a

4 Ecker & Partner 2,808,297 2,673,859 5

5 Menedetter PR 1,062,418 1,049,565- 1.2

All figures relate to year ended December 2004. Fee income = PR fee only.

Data supplied by Extradienst magazine. Exchange rate conducted 16 June

2005

CZECH REPUBLIC

'In the Czech Republic, small and medium-sized companies are taking the lead to stimulate the dynamics of the PR market,' says GCI regional director for central and eastern Europe Katerina Wheeler. 'The awareness of PR is ever-growing and there are new opportunities to look forward to.'

While multinationals remain important clients, there has been a shift towards greater PR use by small and medium-sized local companies that several years ago would not have been in the market for agency support.

A by-product of this is that the market is no longer as completely centred on Prague as in recent years.

Companies based in the regions, says Wheeler, are much more concerned about how they are being perceived, presented and recognised in their area and place lots of emphasis on CSR programmes.

There is also growing demand from specialised clients that are eager to present their competencies and products.

According to Neopublic Porter Novelli, which covers the Czech market from its base in neighbouring Slovakia, mergers and acquisitions and employee communications assignments are booming.

Investor relations demand, on the other hand, remains weak, but public affairs opportunities are picking up, some of which have been triggered by the country's accession to the EU last year.

There are 23 members of the Czech PR agency association APRA. The largest agency, Edelman affiliate AMI Communications, had fee income of EUR2.3m (£1.5m) in 2004 and employs 50 staff.

TOP FIVE CZECH CONSULTANCIES

Rank Company Fee income 2004/2003 Growth

(pounds) (%)

1 AMI Communications 1,553,526 1,441,748 7.8

2 EMC Public Relations 1,215,852 706,264 72.6

3 Ewing Public Relations 1,082,972 n/a n/a

4 B.I.G 930,160 823,856 12.9

5 Bison & Rose Public Relations 783,992 706,264 11.3

All figures relate to year ended December 2004. Fee income = PR fee only.

Data supplied by Association of Public Relations Agencies - Prague.

Exchange rate conducted 16 June 2005

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