If the prime-time soap Dallas had debuted in 1988 instead of 1978, we might have seen JR Ewing holding his Stetson in an unemployment line.
If the prime-time soap Dallas had debuted in 1988 instead of 1978,
we might have seen JR Ewing holding his Stetson in an unemployment
line.
Yes, oil poured much of the state’s economic foundation in the first
half of the century. But when banking and real estate followed crude
prices down the tubes in the late 1980s, Texans learned one lesson the
hard way: diversify or die. Companies too closely invested in affected
industries - including a few PR firms - collapsed. Some national PR
agencies packed up and left like fair-weather friends.
Luckily, the seeds of diversification had already been sown. ’I think
(the oil bust) helped significantly in the long run,’ offers Ken Luce,
general manager of BSMG’s Dallas office.
Dallas/Fort Worth International Airport opened its gates in 1974 and
American Airlines moved its headquarters to the area four years
later.
Southwest Airlines fought legal battles to stay at Dallas’ Love Field
and began low-cost commuter flights to Houston in 1971. Continental
Airlines merged with Texas International in 1982 and has since called
Houston home.
Both Dallas airlines employ agency-sized in-house PR staffs. American’s
parent, AMR, works frequently with BSMG and Burson-Marsteller, and
Southwest retained Porter Novelli earlier this year for special projects
and strategic planning.
When a federal judge ordered AT&T’s break-up in 1984, telecommunications
flourished in Dallas’ northern suburbs. Texas’ relatively cheap real
estate and labor, favorable tax policies and strong universities also
enticed organizations like JCPenney, Boy Scouts of America and Kimberly
Clark to relocate. And technology stalwarts such as Texas Instruments
and Tandy paved the way for newer hi-tech companies like EDS, Compaq and
Dell.
Oil spill
Today, oil continues to fuel a significant segment of the economy.
Exxon, which moved its headquarters to Irving in 1990, reports the
highest revenue of any Texas corporation. But that oil is no longer king
was shown in the temporary price plunge that prompted the pending
Exxon/Mobil merger.
The dip didn’t halt Texas’ overall economic boom and 1998 PR fee income,
up 21%, reflects that. ’There are not a lot of people in Dallas doing
any kind of manual labor,’ notes M/C/C president Mike Crawford. In
Houston, energy and communications giant Enron, which runs neck and neck
with Compaq as the city’s largest public company, has spun off most of
its oil and gas exploration business, says senior PR director Karen
Denne. The in-house PR staff of 50 there handles broad duties with some
occasional project help from local agencies.
Now the top 10 national PR firms all have outposts in Texas and most
predict strong growth in 1999. ’In terms of the PR profession, (Texas)
has matured,’ especially in the last three years, says Stan Levenson,
CEO of Dallas-based Levenson PR.
Boasting three of the nation’s 10- largest cities and one of its
fastest-growing technocenters, Texas easily could be divided into
multiple PR markets. Dallas/Fort Worth is the state’s most diverse
economic area and the country’s seventh-largest TV market. Many view
Houston as a business-to-business city with strong ties to oil,
biotechnology and aerospace.
SBC calls San Antonio home and NAFTA has increased international trade,
but the city’s economy traditionally has hinged on military bases and
tourism, ’neither of which supports PR very well,’ notes Texas Public
Relations Association president Marilyn Pippin.
And then there’s the Austin factor. As well as the 120 staff public
affairs shop Public Strategies Inc. (PSI), the state capital opened its
own international airport this year and has positioned itself as a
hi-tech hot bed. Ten to 12 agencies opened Austin offices in the last
year, estimates local PR veteran Dale Chrisman. Blanc & Otus and
Pierpont are among the agencies expected to move into the city soon.
Figuring out why Fleishman-Hillard tops PRWeek’s Texas listing doesn’t
take much math. The firm represents two of the state’s 10 largest
companies - Austin’s Dell and San Antonio’s SBC (parent company of
Southwestern Bell) - and does some project work for two others, Exxon
and EDS in Dallas.
Fleishman typically follows its clients into new markets. Regional
president Janise Murphy opened the Dallas office in 1993 to serve EDS.
The two companies no longer have an on-going relationship, although
Murphy says Fleishman wrapped up a project for EDS recently. In the past
six years, Fleishman has also opened offices in Houston, Austin and San
Antonio.
The other large firms have also been active. Edelman is among the few
national firms that saw Texas through the rough times. However, Edelman
recently lost its Houston and Dallas managers to a brutally competitive
job market; the agency announced last month that Samuel Falcona would
leave his own agency, Alert Five Communications in Chicago, to lead its
Texas operations. Edelman clients include Ericsson, Raytheon and the Boy
Scouts. The purchase of Austin-based hi-tech firm GTT last year should
boost 1999 revenue, however.
Publicis Dialog can trace its complicated root system in Dallas back at
least 20 years to the Bloom agency. Publicis represents clients like
Nestle and Samsung. However, a conflict that arose when Publicis merged
with EvansGroup in July 1998 forced the company to drop an unnamed big
client, causing income to fall.
BSMG integrated what was Temerlin McClain’s Dallas PR shop in March
1998. Later in the year, it pulled out of Houston and Austin, cut loose
some local accounts and dropped a few practice areas. But access to
BSMG’s national resources put the office on a strong future footing,
says Luce.
Shandwick moved to Houston to serve Compaq, a 17-year client it made no
bones about dropping last month in favor of Hewlett-Packard’s PC
account.
However, the firm says its Houston jobs are secure. Business development
VP Calvin Fudge cites clients in the oil and gas, telecom and aviation
defense industries. Meanwhile, Compaq’s corporate PR director, Jim
Finlaw, says the company could double its 25-person in-house staff
within the next year and is assessing its needs for external PR
counsel.
Other national agencies to watch in Texas include Burson-Marsteller,
which quietly opened a Dallas office this summer; The Weber Group, which
gained an Austin presence at about the same time; and Golin/Harris,
which launched branches in Dallas and Houston last year after winning
the lucrative Texas Instruments account.
Mavericks
Befitting Texas’ maverick reputation, the three agencies posting the
largest percentage gains in 1998 were independents. Revenue for
Houston’s Pierpont Communications jumped 64% to nearly dollars 2
million. President Phil Morabito says he has been approached by bigger
firms talking acquisition, but hasn’t taken the bait.
Houston-based Vollmer PR opened offices in Austin and Dallas this year,
and saw its revenues almost double in 1998 with clients such as Quaker
State and Pennzoil. Also nearing the 50% mark in growth was Dallas’
Levenson PR. In addition to working for Zale and three movie studios,
Levenson helped W.R. Grace respond to damaging publicity generated by
the movie A Civil Action.
A number of firms claiming revenues of dollars 1.5 million or more in
Texas didn’t submit audited financial information for the PRWeek survey:
they include Halcyon, Read-Poland, Bates Churchill, Springbok and
PSI.
Some Dallas PR pros claim their hometown really enjoys more hi-tech
business than Austin, which many view as an emerging PR market. Most
concede, however, the capital city boasts better scenery and a higher
per capita concentration of start-ups and Internet companies. ’It’s like
musical chairs and somebody’s not going to have a chair,’ Crawford says
of Austin’s hi-tech gold rush.
His Dallas-based integrated marcom agency dropped some small, start-up
PR clients last year in favor of companies with bigger advertising and
marketing budgets, flat lining PR income.
Cunningham Communications runs its Texas operation solely from
Austin.
The office has grown to 40 employees in three years and ranks second in
the state. ’We feel the market is just beginning to show its true
capabilities,’ says Morris Denton, Cunningham’s managing director.
Cunningham, like a growing number of agencies in the state, exclusively
serves hi-tech clients.
But could these late comers to Texas, along with a few who remember the
1980s all too well, eventually regret putting too many eggs in one
basket?
Pierpont ’s Morabito, who moved to Houston just as the state’s economy
bottomed out, doesn’t think so. ’Technology isn’t an industry that lives
and dies by the price of a commodity,’ he points out. ’Technology itself
is a diverse specialty.’
TEXAS STARS BIG AND BRIGHT: THE TOP 10 TEXAS PR AGENCIES
Rank Company Income Change
98 97 1998 1997 %
1 1 Fleishman-Hillard** 8,263,000 5,755,000 44
2 N/A Cunningham Communications 4,991,000 N/A N/A
3 3 BSMG Worldwide 4,523,900 4,366,000 4
4 2 Publicis Dialog 4,017,400 4,508,300 -11
5 5 Vollmer Public Relations 3,400,000 2,300,000 48
6 4 Edelman PR 2,887,023 2,482,078 16
7 N/A Miller/Shandwick
Technologies 2,713,000 N/A N/A
8 7 Pierpont Communications 1,946,132 1,189,941 64
9 6 M/C/C 1,500,000 1,500,000 0
10 8 Levenson PR 988,431 662,793 49
Totals 27,525,886 22,764,112 21
Rank Company US income Texas %
98 97 1998 1998
1 1 Fleishman-Hillard** 136,272,000 6
2 N/A Cunningham Communications 20,437,000 24
3 3 BSMG Worldwide 109,537,000 4
4 2 Publicis Dialog 11,403,700 35
5 5 Vollmer Public Relations 3,400,000 100
6 4 Edelman PR 101,868,218 3
7 N/A Miller/Shandwick
Technologies 91,485,000 3
8 7 Pierpont Communications 1,946,132 100
9 6 M/C/C 1,500,000 100
10 8 Levenson PR 988,431 100
Totals 366,915,481 8
Rank Company US income Texas % Location
98 97 1997 1997
1 1 Fleishman-Hillard** 115,193,000 5 Dallas
2 N/A Cunningham Communications 17,390,000 N/A Austin
3 3 BSMG Worldwide 58,136,000 8 Dallas
4 2 Publicis Dialog 10,817,598 42 Dallas
5 5 Vollmer Public Relations 2,300,000 100 Houston
6 4 Edelman PR 86,833,594 3 Dallas
7 N/A Miller/Shandwick
Technologies 80,292,000 N/A Houston
8 7 Pierpont Communications 1,189,941 100 Houston
9 6 M/C/C 1,500,000 100 Dallas
10 8 Levenson PR 662,793 100 Dallas
Totals 276,632,926 8
Source: PRWeek Top 200.
** Includes both Houston and Dallas offices.
