Financial PR: Battling for European financial supremacy - As the landscape of the European financial market changes global PR networks are fighting independent financial PR firms for pan-European accounts

The last few months have seen international networks like

Burson-Marsteller and Edelman PR Worldwide taking steps to boost the

strength of their London PR operations. To date, with the exception of

Shandwick, none have been able to seize the high ground in UK financial

PR.

This has traditionally been dominated by financial PR agencies without

international networks, but with large local operations, such as

Brunswick and Financial Dynamics.

In September, with this in mind, Burson-Marsteller recruited Gavin

Anderson senior director Adrian Shaw to a new post, to head financial

relations across its 17 European offices.

Shandwick is widely held to have lacked muscle in the City since losing

Chris Matthews, chief executive of its financial PR operation, last

year.

Following a major reorganisation, Shandwick is understood to be hunting

again for a heavyhitting financial consultant.

Edelman, which has nine offices in Europe, succeeded last week in

recruiting its own heavyhitter, Kirsty Macmaster, a founder of investor

relations consultancy Frew Macmaster.

These agencies are hoping that European financial integration will give

them an advantage over strong local operators in competing for

clients.

But there is a question over whether international networks or local

operators, most of whom are based in London, Europe’s most sophisticated

financial PR market, are best-placed to take on pan-European financial

work.

The merger of Citigate and Dewe Rogerson has created an agency which

combines a strong London presence with a spread of offices in the

world’s financial centres which could soon rival that of the established

networks.

The firm already has financial PR offices in New York, Hong Kong and

South Africa.

Kevin Soady, MD of international business at Citigate Dewe Rogerson

says: ’It is important to have domestic area of expertise but increased

international links are useful in certain markets.’

Macmaster is joining an operation which does not compete with the likes

of Financial Dynamics for UK clients, and mostly handles UK financial

work for international clients, like Chase Manhattan Bank and Bank of

Austria. She does not see Edelman developing as a direct competitor to

large UK firms for lucrative mergers and acquisitions work, but wants to

make sure the agency is poised to pick up business from companies

needing to communicate with investors in more than one European

country.

Macmaster believes the big investors, like pension firms, will

eventually want to hold shares listed in pan-European indices, rather

than single country indices like the FTSE 100. This will force not only

UK, but German and French companies, for example, to use PR to

communicate with investors and the media across Europe.

This year London, Frankfurt, Madrid, Switzerland, Austria, Sweden and

Brussels all agreed to the development of a pan-European stock

exchange.

According to Shandwick director Andrew Best: ’The pan-European stock

exchange will eventually replace the current exchange.’Once the exchange

is up and running, he believes agencies with offices across Europe will

be best placed to handle large flotations.

Financial Dynamics director Hugh Morrison maintains that despite these

planned changes, London will retain its position as the largest equity

market centre in Europe for some time to come.

’London’s financial pre-eminence won’t disappear overnight and even if

there is a European stock exchange it will allow foreign stocks to be

traded for a long while yet,’ says Morrison.

Financial Dynamics bought itself out from its French-run network, BDDP,

earlier this year and remains unaffiliated to any other network. It

operates solely out of London, but counts several European clients on

its books including Dutch bank ABN Amro. Morrison acknowledges the

growing likelihood of Euro-exchanges but says that agencies need not be

driven by this fact.

’Agencies that have no worldwide offices but are strongly affiliated

with independent companies can guarantee quality control. We are winning

business hand over fist from larger companies with large networks

because we can pick companies which are tailored to suit the client’s

needs.’

However, international networks argue that it is harder to guarantee the

quality of an affiliate which is not wholly owned by the agency.

Some PR practitioners believe changes in Europe will require companies

to communicate on a pan-European basis on day-to-day issues.

The introduction of a single European currency will create a new market

with 300 million customers. More companies will find themselves in

competition with each other, and consumers will be able to compare

cross-border prices.

This could lead to more day-to-day pan-European corporate and consumer

PR work.

In building up their London offices, international networks like

Burson-Marsteller and Edelman are unlikely to find themselves competing

successfully for the larger UK clients with local needs. But they will

be well placed to snap up the pan-European work that is likely to be

generated as the single market takes shape.