There’s an old Pennsylvania saying that the land between Philadelphia and Pittsburgh is Nebraska - Pennsylvania has the largest rural population in the nation and its economic keystone is agriculture.
There’s an old Pennsylvania saying that the land between
Philadelphia and Pittsburgh is Nebraska - Pennsylvania has the largest
rural population in the nation and its economic keystone is
agriculture.
The Pennsylvania heartland is bookended to the east by cosmopolitan
Philly, with its insurance and pharmaceutical businesses, and to the
west by almost-Midwestern Pittsburgh, with its hi-technology and
healthcare industries.
The state’s infrastructure, communications and transportation
capabilities enticed many national and international companies to make a
home and often their headquarters in the Keystone State.
Fortune 500 companies like H.J. Heinz, Alcoa and PNC Bank are all a part
of Pittsburgh’s culture and the changing face of the local economy.
Alcoa’s new innovative, glass-heavy headquarters building on the city’s
North Shore garnered national media attention. PNC Bank will lend its
name and some of its cash to the new baseball stadium, dubbed PNC
Park.
For years, Philadelphia’s outgoing mayor, Ed Rendell, led the city’s PR
bandwagon by helping agencies with community-based programs, sometimes
attending six or seven events a day. Many in the PR community are
saddened by his departure and wonder if the incoming mayor, John Street,
will be as accessible. The waterfront ’Phillywalk’ is a dollars 98
million project geared toward bringing in even more tourism revenue. And
this solidly Democratic town will be hosting the Republican National
Convention next year, proving it really is the City of Brotherly
Love.
The mood wasn’t always so bubbly. The late-eighties economic downswing
caused the state’s big employers to tighten up. A lot of the largest PR
agencies struggled as corporations dropped their large retainers and cut
back on their own communications staffs.
The business atmosphere, however, became friendlier to entrepreneurial
types, with local governments working hard to entice Internet start-ups,
research firms and software makers to open shop in their areas. These
mid-sized outfits are starting to make a significant economic
impact.
Pennsylvania’s two largest cities are both hot in the race with the rest
of the country for hi-tech dollars. The Greater Philadelphia Region has
the third-largest concentration of research institutions in the US. R&D
companies like SmithKlein Beecham and United Research Laboratories have
decided to call Philadelphia’s suburbs home. The area has been dubbed
’Philacone Valley.’ The Wall Street Journal, focusing on Carnegie Mellon
University’s robotics program, recently named Pittsburgh one of the
nation’s hottest hi-tech cities. Local newspapers have been talking
about the emergence of ’Roboburgh.’
The state’s economic boom has been keeping Pennsylvania’s PR agencies
busy. Ketchum PR is one of the oldest agencies in the country and the
largest in the state in terms of 1998 in-state revenue (dollars 7.8
million), according to the PRWeek list of top 10 Pennsylvania agencies
by revenue.
The BSMG-owned Tierney Group, in Philly, ranks number two, with dollars
6.3 million, trailed by Burson-Marsteller (in Pittsburgh) with dollars
4.9 million.
Not an ugly step-sister
Philadelphia pros say their shops have kept pace with their haughty
cousins in New York. ’Some big corporations and agencies probably have
the perception that we’re an ugly step-sister to New York City,’ says
Scott Tattar of Tattar Cutler, the firm that ranks ninth on the PRWeek
list. ’We may be a step-sister, but we’re really not that ugly.’
Tattar and others in the Philadelphia area are starting to see local and
national businesses’ perceptions change. More often, Pennsylvania
companies are looking for something other than a brand name and are
being well served by smaller, locally run shops.
’A couple years ago, there was a real push in the Philadelphia community
to keep accounts ’in the family’ - to award them to Philadelphia
agencies instead of New Yorkers,’ says Jeanne Russo, PR director for
Schubert Communications.
’I believe this campaign helped increase local corporations’ awareness
of the resources they have here in our own backyard.’
Brian Tierney of the Tierney Group understands the sentiment about
Philadelphia doing work with Philadelphians, but he also thinks that his
peers should look at the quality of the work. ’Some people in the
business whine about Philadelphia (companies) going elsewhere for their
PR work,’ Tierney says, ’but I’m not going to support a restaurant in my
neighborhood if I don’t like the food - and I don’t think anyone else
should, either.’ The Tierney Group’s income accounts for only 6% of BSMG
1998 revenue.
While Philly agencies are battling it out with New York and New Jersey
shops, Pittsburgh finds there is little crossover when wooing a
client.
’Unless you are talking about a state contract, I have found very little
competition with Philadelphia,’ says Katie McSorley, who heads the
business-to-business practice in the Pittsburgh office of New York-based
Creamer Dickson Basford.
But McSorley says she sees increasing competition within Pittsburgh.
’There are many new, young agencies with three to 10 employees that have
been launched in the last 10 years’ by people who left - and now compete
with - the established agencies.
Pittsburgh’s economic condition improved with shots of hi-tech and
healthcare capital. The entrepreneurial companies that started 10 to 15
years ago have grown to the point where they now need complements to
their in-house staffs or firms that provide niche capabilities.
’Firms like ours have grown largely on the strength of the middle market
in Pennsylvania - businesses with less than dollars 500 million in
sales,’ says Karl Skutski of the Pittsburgh-based independent Skutski &
Oltmanns, which is sixth on the PRWeek list, with dollars 1.7 million in
revenue. ’Many of these accounts are too small for the major agencies to
service well and cost-effectively, but the clients still need the best
talent and a full complement of resources.’
Live locally, work globally
Indeed, Ketchum credits the Keystone State with only 8% of its income,
though it has big Pittsburgh-based clients such as Heinz and
Highmark/Blue Cross. ’Our client work is about 50% local with large
Pittsburgh companies and 50% from Washington, DC, San Francisco, New
York,’ says Kelley Murray Skoloda, SVP of Ketchum’s Pittsburgh office.
’I have the good fortune of being able to work and live in a relatively
small city, and at the same time be exposed to multinational client
work.’
As the number-one agency in the state, Ketchum has provided a solid
education for independent shops like Tattar Cutler and the
Pittsburgh-based Jack Horner Communications. Both Scott Tattar and Jack
Horner came out of Ketchum armed with the skills to start their own
business and they have thrived, even with big companies. For example,
Horner’s agency handled the PR campaign to unveil the Alcoa Corporate
Center to internal and external audiences, earning media coverage
throughout the US, including a four-page spread in The New York Times
Sunday magazine and a CNN segment.
Smaller agencies can find niches and flex with market demands. Bigger
agencies, however, don’t always have the economic elasticity of smaller
shops since they often rely on the large retainers of multinational
companies.
Philadelphia-based Earle Palmer Brown felt that squeeze when its numbers
for 1998 dropped by 20% while everyone else was cruising near an average
gain of around 20%.
’We lost significant business largely due to being on the wrong side of
mergers and acquisitions,’ says John Moscatelli, SVP and associate GM
for EPB. ’For example, one of our largest PR clients was
(convenience-store chain) Split Second at Amoco. When Amoco merged with
BP, they changed their C-store marketing approach, which resulted in the
termination of our relationship.’
EPB Communications, to which Earle Palmer Brown belongs, is continuing
to expand despite last year’s numbers for its PR unit. The network
recently acquired Ketchum Advertising’s Pittsburgh office, now called
Egan/St. James. Moscatelli thinks that larger agencies like his will be
forced to find ways to reduce overhead to remain competitive but some
things will always stay the same.
’For clients marketing nationally or globally, the agency no longer has
to live down the street,’ says Moscatelli, ’but there will always be a
need for PR pros who know the local market and can help a client with
locally driven issues and initiatives.’
KEYSTONE’S KEY PLAYERS: TOP 10 FIRMS
Rank Company PA Income Change
98 97 1998 1997 %
1 1 Ketchum PR 7,787,000 7,210,000 8
2 2 BSMG (The Tierney Group) 6,306,592 5,871,865 7
3 3 Burson-Marsteller 4,859,000 3,850,000 26
4 5 Dorland Sweeney Jones* 2,977,000 2,237,000 33
5 4 Earle Palmer Brown PR 2,100,000 3,200,000 -34
6 6 Skutski & Oltmanns 1,657,399 1,334,490 24
7 7 Dudnyk PR 1,156,000 957,000 21
8 8 Andrews Sacunas & Saline 872,100 716,753 22
9 10 TattarCutler 819,147 636,569 29
10 9 Toplin & Associates 789,471 657,648 20
1998 Total Income 29,323,709 26,671,325 10
Rank Company US income PA %
98 97 1998 1998
1 1 Ketchum PR 101,485,000 8
2 2 BSMG (The Tierney Group) 109,537,000 6
3 3 Burson-Marsteller 136,596,000 4
4 5 Dorland Sweeney Jones* 2,977,000 100
5 4 Earle Palmer Brown PR 8,800,000 24
6 6 Skutski & Oltmanns 1,657,399 100
7 7 Dudnyk PR 1,156,000 100
8 8 Andrews Sacunas & Saline 872,100 100
9 10 TattarCutler 819,147 100
10 9 Toplin & Associates 789,471 100
1998 Total Income 364,689,117 8
Rank Company US income PA % Location
98 97 1997 1997
1 1 Ketchum PR 78,769,000 9 Pittsburgh
2 2 BSMG (The Tierney Group) 58,136,000 10 Philadelphia
3 3 Burson-Marsteller 119,330,000 3 Pittsburgh
4 5 Dorland Sweeney Jones* 2,237,000 100 Philadelphia
5 4 Earle Palmer Brown PR 6,500,000 49 Philadelphia
6 6 Skutski & Oltmanns 1,334,490 100 Pittsburgh
7 7 Dudnyk PR 957,000 100 Horsham
8 8 Andrews Sacunas & Saline 716,753 100 Harrisburg
9 10 TattarCutler 636,569 100 Horsham
10 9 Toplin & Associates 657,648 100 Dresher
1998 Total Income 269,274,460 10
Source: PRWeek Top 200
*Includes San Francisco office.
