Dot.coms occupied the minds of many European PROs in 2000 with the
first quarter of the year described as 'crazy' by several agencies. But,
in sharp contrast to 1999, the main occupation in the latter half of the
year was spotting and avoiding failures rather than counting the money
from new accounts.
But the dot.com boom's legacy will remain long after ill-judged sites
have been forgotten. Roused by the example of internet companies, bricks
and mortar businesses have woken up to the advantages of PR in brand
building on a pan-European and global scale.
US marketing services groups continued to demonstrate their interest in
European PR agencies by parting with cash to buy them. Golin/Harris,
Cohn & Wolfe, Incepta and Edelman have all proved the depth of their
pockets during the past 12 months.
This was no great surprise, simply a function of basic business
development: US companies are going where the money is, because dot.bomb
or not, European agencies in general had another good year.
But not everyone sees the march towards international consultancy as
entirely positive. While most European agencies are upbeat about
prospects, Adrian Wheeler, GCI chief executive has noted some
disquieting trends. 'There are several threats attacking the quality of
client services. The frenzy of consolidation is having the effect of
bodging together companies that are not really bodgeable. It is
impossible for clients to get the same kind of untrammelled attention
and that is having an effect on the way clients view the industry.
There is a degree of scepticism I've never encountered before. The one
thing that worries me about pan-European business is the tendency for
clients to buy European PR by the kilo. That is a very bad thing for
clients and agencies in the long run. (Agencies') profit is secondary to
topline figures. It's quite insidious.'
Despite these concerns, the stock of PR continues to rise in European
countries that had traditionally been resistant, preferring advertising
to put messages across. Another reason for PR's change in status is an
issue familiar to people over the last two years from Seattle to
Trafalgar Square: globalisation.
Elaine Cruikshanks, Hill & Knowlton chairman and CEO (western
continental Europe), believes this phenomenon can be turned to the
advantage of agencies.
'Globalisation is pushing national or European players onto a world
Daimler Chrysler, for example, is still a very "German" company but it
is operating in an international market and is therefore coming up
against US majors with a history of communicating well.'
This represents something of a culture shock, especially for German and
French firms, she argues. 'These companies have formerly only
communicated by advertising. Now they find the need for communicating to
stakeholders.' The role of PR is becoming better understood, with
Germany in particular appearing increasingly comfortable with a
distinction between PR and advertising, which has not always been the
It is this sort of advance that has led UK-based Chime Communications
into the European owned groups league table this year. Its purchase of
Harvard gave it a foothold in continental Europe for the first time,
with Chime chairman Lord Bell predicting that the increasingly
deregulated German economy will offer attractive prospects for PR
agencies. M&As there are often handled by UK PR groups as it is and
Chime will shortly open a financial agency in the country, in
anticipation of a boom in the quantity of work.
Of all the countries in Europe, the dot.com and dot.bomb seem to have
done French PR agencies fewest favours, with spiralling salaries and
acute staff shortages followed by massive cuts in personnel. It is
remarkable, given this background, that trade association Syntec
reported an average 27 per cent income growth for its members.
But France, where large companies tend to be state-owned, remains more
or less tied to the notion of having PR and advertising under one roof.
In this environment, H&K has entered a joint venture with its sister
advertising agency, JWT - the sort of 'when in Rome' attitude which
indicates that 2001 may not be the year for PR firms alone to challenge
the dominance of native giants such as Publicis with any confidence.
But one area for general optimism for agencies is corporate social
responsibility (CSR), according to James Thellusson, Cohn & Wolfe MD
(Europe): 'CSR is growing at a pan-European level. It is a premium area,
and will dovetail there over the next five or six years with people who
have savings, shares and pensions.' Increased public scrutiny has
continued to force businesses to take reputation management seriously.
Jonathan Wootliff joined Edelman's Brussels office from Sweden-based
Kreab as MD (stakeholder strategies), a reflection in part of the
increasing importance of public opinion in clients' strategies.
'Everything is converging towards the consumer,' said Rosanna d'Antona,
Edelman president (Europe).
CSR is just one of several'microspecialisms' on which agencies are
concentrating, says Lutz Meyer, chief executive (Europe), Weber
Others include broadcast, litigation, and internal comms, he says, while
macro specialisation staples like IT, healthcare, corporate, public
affairs and IR continue to be developed on a pan-European basis. 'Global
players looked into synergies in 2000 and wanted more integration of
messages,' Meyer concludes.
Ketchum Europe MD James Maxwell agrees: 'Our strategy is to take global
practice groups like healthcare, corporate and technology and develop
them across Europe. French, German and Swiss companies, particularly in
pharmaceuticals, are for the first time not looking for a market by
market approach; they want effective programmes out of one location.'
Italy, a key maturing market, showed a growing trend on behalf of major
agencies to develop specialist practices.
PR companies found themselves pushed harder than before by clients in
2000 in terms of delivering quality, according to the head of one
agency.'It is not only dot.coms who have discovered money is a limited
resource,' he said wryly. Allied with this increasing pressure was the
view that the speed of clients' decision-making on pitches 'was slower
this year than last', according to one network head.
Elsewhere, individual countries reported strong performances with
Sweden's PR success story continuing during 2000. Although Kreab remains
pre-eminent, with fee income double that of its nearest rival, other
agencies reported outstanding years too. New entrant Havanna PR and
Information flourished on the back of the dot.com boom and reports that
IR, PA and lobbying work is also growing. Its growth, by more than 300
per cent in 2000, is unmatched but results from other agencies suggest
Sweden's reputation for high-tech PR expertise remains deserved.
Austria's second appearance in these tables confirms the growing
importance of the German-speaking region of Europe, with PR firms, the
majority of which are Vienna-based and independent, performing
The market is also geographically well-placed for campaigns in central
and eastern Europe, which is a major reason why Germany's number one
agency, Kohte Klewes, took a 40 per cent stake in Austria's number one,
the Weber Shandwick affiliate Publico. As in 1999, the ranking and
report were compiled with the help of PRWeek's sister magazine PR Report
and with Austria's marketing magazine, Bestseller.
Switzerland, on paper at least, remains the hardest country for foreign
agencies to penetrate, despite its commercial importance to a plethora
of multinationals. A logical strength in financial PR has been joined in
the last year by a concentration on dot.coms and other fast-growing
start-ups, with biotech a likely sector for future PR growth.
Spain is absent from this report because PR association Adecec is
required to present its members' figures to the Spanish ministry of
finance before making their income public in July. Figures will be
published later in the year.
Networks, for their own part, saw 2000 as the year they closed the gap
with owned groups in terms of service quality although Chime chairman
Tim Bell believes his approach renders the networks, at least for some
clients, obsolete. 'You don't need to be in every country,' he says.
'The battleground is about producing quality businesses in different
Networks are constructed on the principle that you have to open an
office everywhere and that's old-fashioned.'
The networks are unlikely to be impressed with this notion since they
see the flexibility of wide geographical reach as crucial to their
success. But whatever the disagreements between various schools of
thought on the provision of pan-European campaigns, the industry as a
whole should be encouraged. In 2000, European PR in all its forms
continued to be taken seriously by businesses.
TABLE RANKINGS: THE FACTS ON THE FIGURES
The 2001 PRWeek Top European Agencies league tables rank owned groups,
networks and consultancies in leading European markets by calendar year
fee income. For the fifth year, PRWeek has enlisted the help of trade
associations in some of the main continental markets in order to produce
the most comprehensive cross-border league tables in Europe.
Gessellschaft Public Releations Agenturen (GPRA) in Germany,
Associazione delle Agenzie di Relazioni Pubbliche a Servizio Completo
(Assorel) in Italy, Bund der Public Relations Agenturen der Schweiz
(BPRA) in Switzerland, Precom and the VPRA in the Netherlands, the
BGPRA/ABCRP in Belgium, and Precis in Sweden all advised on definitions
of PRWeek's criteria to avoid misunderstandings in different
According to PRWeek's criteria, European income includes fees for public
relations work carried out in the EU and Switzerland. It does not
include income relating to non-PR activities such as advertising, direct
mail, design or exhibitions. To avoid possible misinterpretation of the
term mark-up in different markets, consultancies were asked to submit
fee income only. To avoid an imbalance in the tables caused by the use
of different exchange rates, consultancies were also asked to provide
sterling fee incomes for 2000 and 1999 according to average exchange
rates (see below).
Once PRWeek's tables had been compiled, the trade associations in the
relevant countries checked members' figures against their own records to
help ensure the accuracy of the PRWeek rankings. The German and Austrian
tables were provided by PRWeek's sister magazine in Frankfurt, PR
Report, and the Swiss table was put together as an independently-audited
ranking by the BPRA.
For the 2001 PRWeek Top European Agencies league tables, local currency
was converted to sterling as per the average Financial Times exchange
rates for 2000 quoted below. For comparison purposes, both 2000 and 1999
incomes were converted at the same rate.