MARKET FOCUS NEW YORK: Big Apple PR blitz - New York is the home of public relations with nine of the world’s top 10 agencies based there But as Rebecca Flass discovers, New York is smaller than it looks.

The New York PR market is like Manhattan itself. All the tall guys are here, the big agencies in the midtown skyscrapers. There are cute brownstone boutiques. And nestled in between, like converted Soho warehouses, are some new and powerful medium-size businesses who have carved out niches for themselves in IR, healthcare, consumer, technology, and celebrity PR.

The New York PR market is like Manhattan itself. All the tall guys are here, the big agencies in the midtown skyscrapers. There are cute brownstone boutiques. And nestled in between, like converted Soho warehouses, are some new and powerful medium-size businesses who have carved out niches for themselves in IR, healthcare, consumer, technology, and celebrity PR.

The New York PR market is like Manhattan itself. All the tall guys

are here, the big agencies in the midtown skyscrapers. There are cute

brownstone boutiques. And nestled in between, like converted Soho

warehouses, are some new and powerful medium-size businesses who have

carved out niches for themselves in IR, healthcare, consumer,

technology, and celebrity PR.



But also like Manhattan, the New York PR scene looks bigger than it

actually is. Nine of the 10 largest firms in the world are headquartered

here.



’We made the decision to move our headquarters to New York because the

perception is that if you are a New York agency, you are a big-time

agency,’ says Ketchum CEO Dave Drobis. ’It’s because of the influence of

the media in this market, and the opinion leaders in this market. Most

people view the diversity of the market as an opportunity to get good PR

work and service in whatever area they need.’



But the amount of business generated from New York offices of some major

firms is surprisingly small in some cases - only 12% of Shandwick’s US

business was billed from New York in 1998, only 14% of

Fleishman-Hillard’s US business, only 20% of Hill & Knowlton’s. And

Porter Novelli, Ogilvy and Ketchum all have less than 30% of their

business in the nation’s corporate capital.



’There is no such thing as a New York market,’ explains Porter Novelli

EVP/GM Helen Ostrowski. ’Clients come to us because they want a national

agency. We get calls from clients in San Francisco when there are people

in their own backyard who can do the job just fine.’



This means medium-size firms figure surprisingly large in New York.

Edelman, which is the fifth largest agency in the US, is the biggest New

York agency.



Ruder Finn, which is the 12th largest agency in the US, is the second

biggest, generating 89% of its US business in the City. And Citigate

Dewe Rogerson, ranked 18th nationally, comes in at number seven.

Burson-Marsteller did not provide numbers.



Edelman conducts more than half its global business from New York, but

Richard Edelman, president and CEO of Edelman Public Relations Worldwide

says the firm has made a very strong effort not to put everything in New

York. ’By keeping our corporate business in cities such as San Francisco

and Chicago, it reduces operating risk.’ The firm is also

co-headquartered in Chicago.



Ruder Finn, on the other hand, is unashamedly New York-centric. ’In the

last decade, we’ve concentrated on building a great amount of expertise

in our headquarters office,’ says Peter Finn, chairman of the executive

committee for RF. ’Many clients want New York creative - they feel it’s

something special that they can get in New York.’



All agree, though, on the need for a New York presence. The latest firm

to establish an office here is Niehaus Ryan Wong, which opened this

month with two clients (research organization NFO and online financial

community Motley Fool) and five staff members. The office is headed by

GM Laura Hamilton and is expected to have 15-20 employees by year-end.

And trendy LA-based celeb firm IDPR has just nabbed Mara Buxbaum away

from PMK to launch here.



New York is attractive for bigger firms as well. Shandwick, acquired by

IPG last year, has a fairly small New York office. However, managing

director Steve Conafay says its goal is to be in the top 10 by year-end

and the top five by the year 2001.



Melting pot



New York is a melting pot and a catchment area for all sorts of PR

work.



One of the most famous NY firms, Rubenstein & Associates, has a classic

New York client mix of showbiz, media and real estate - Marv Albert,

Leona Helmsley, Rupert Murdoch, George Steinbrenner, Sarah Ferguson and

Donald Trump. Dan Klores, whose showbiz clients include Jay Leno and

Julia Roberts, is a big media player also, including VH1, HBO and MTV as

well as New York magazine, Cosmopolitan and Esquire. Also big in the

celebrity lifestyle PR game is Cairns & Associates, a 60 person firm

which pairs celebrities like Helen Hunt with Baileys Irish Creme, and

interior designer Chris Madden with Swarovski crystal.



Healthcare is also strong, perhaps because there are so many

pharmaceutical companies in nearby New Jersey. As well as big agency

practices like Edelman, Ruder Finn, Ogilvy and Cohn & Wolfe (which

attributed its 42% growth last year almost entirely to an increase in

healthcare work), several smaller firms are booming, including SCIENS

Worldwide, Chandler Chicco, Noonan/Russo and at 66%, the fastest-growing

of all, Cooney/Waters Group.



Nowhere does this small/large equation figure more highly than in the

financial sector. Wall Street and the preponderance of corporate HQs

make investor relations, financial PR and corporate work the most

obviously dominant practice area.



Although many of the big firms have a financial practice, the

peculiarities of Wall Street and investor relations created a breed of

small but powerful independent IR specialists. Some have been gobbled

up: Dewe Rogerson (by Citigate) still posts figures; others, like

Chicago-based Financial Relations Board, now part of BSMG, have been

incorporated into the parent business.



Citigate has had a relatively low profile in the US as compared to

Europe, but that is changing following parent company Incepta’s purchase

of financial communications firm Dewe Rogerson in September. The agency

also acquired Wall Street ownership tracking firm Kissel-Blake earlier

this month, further strengthening its shareholder intelligence capacity,

and recently added clients RJ Reynolds Tobacco Company, Wit Capital and

The Capital Markets Company.



Also undergoing a period of change is Golin/Harris New York. At 84%

growth in 1998, the fastest growing agency in New York has reshaped

itself as a specialist in financial communications. In addition to M&As,

IPO, proxy solicitation, shareholder litigation and IR work, the office

also handles marketing communications and corporate affairs. It has 50

employees and clients such as Sprint and DaimlerChrysler. Staff members

include nine Ph.Ds, five attorneys, and several MBAs.



’We’re not hiring traditional public relations people,’ says GM Richard

Wolff. ’We’re hiring the ability to think analytically and to write in a

professional manner. You have to have a higher level of sophistication

(in New York)than in other markets.’



Private



Some remain steadfastly private, however: Morgen-Walke Associates, Kratz

& Jensen, KCSA Public Relations Worldwide and GS Schwartz & Company, as

well as Kekst & Company, which declined to provide figures for our

rankings.



’New York is the money center of the world, almost irrespective of where

any company is headquartered,’ says Gershon Kekst, president and founder

of the firm. ’The majority of our clients are not NY-based.’ While it

currently has 65 employees, including 35 PR pros, the firm plans on

expanding its PR staff by at least 30% over the next 12-18 months.



Morgen-Walke Associates has had a lot of success surrounding Internet

accounts, with recent wins including iTurf, ZDNet and Careerbuilder.

’Our Internet business has been outstanding,’ says Morgen-Walke

Associates founder David Walke. ’We probably picked up dollars

2.5-dollars 3 million on an annualized basis this year in new

accounts.’



Internet and hi-tech



But it’s not just financial firms who are taking advantage. Technology,

which has been slow to take off in ’Silicon Alley,’ is finally emerging

as the Internet revolution takes hold. ’In the past few months, there’s

been a tremendous surge in the amount of requests we’ve received from

dot-com companies,’ confirms PN’s Ostrowski.



Hi-tech agencies TSI, Brodeur Porter Novelli, Middleberg & Associates

(with 66% growth last year) and LobsenzStevens are obvious

beneficiaries, but even generalist agencies like Peppercom (52%) and

Stanton Crenshaw (60%) have benefited from dot-com business.



Indeed, Bill Ryan at Niehaus Ryan Wong goes so far as to suggest that

hi-tech PR and the Internet are forcing a review of the whole practice

of public relations. ’There are a lot of big, old agencies in New

York.



But people involved with the Internet, new media and e-commerce don’t

want that kind of agency because they don’t understand the business.

They’re still doing PR the way they did 50 years ago.’



It’s possibly for this reason that Dorothy Alex Stanton, CEO of Stanton

Crenshaw argues, ’there is a renewed interest in mid-sized agencies.’

The consumer/technology/financial communications agency boasted growth

of more than 60% in 1998, and with major new account wins including

Mitsubishi last month, and Ebank, Stanton projects 1999 income of

dollars 4.7 million, up 46% from dollars 3.2 million in 1998.



Southard Communications is experiencing similar growth. President Bill

Southard projects 1999 income will increase by approximately dollars 1

million thanks to 1999 client wins Emerson Electronics, K’NEX, GP Toys

and Briar Patch. Other new firms like Sloane &Co. and Belsito & Co. have

already won dollars 1 million in billings in their first year.



Old-school PR certainly isn’t doing badly. But it’s not doing amazingly

well either. Of the top 10 firms in New York who provided both ’98 and

’97 figures, growth was 14%. The average for the top 60 New York firms

in this report was 16% - significantly below the national average of

24%.



Agencies at the top struggle to explain this entirely. ’No one will grow

that fast in New York,’ says Edelman. ’It could mean agencies have a

well-balanced portfolio,’ adds Nancy Rueth, MD of Ogilvy New York.



Clearly, percentage growth-wise, firms lower down the pecking order can

grow more quickly. Golin/Harris won about dollars 4.2 million in new

business and grew 84%. Edelman won the same amount but only grew 12%,

while third and fourth-place Porter Novelli and Ketchum did about

dollars 5million of extra business in 1998 and grew around 20%.



Perhaps the hottest New York shop right now, though, is GCI. The

consumer marketing group, headed by EVP/MD Carla Stanmyre, grew 200% in

1998 and accounts for 25% of GCI Group’s North America revenues. 1999

new business wins total over dollars 3 million and include British

Airways (a dollars 2 million global account), Starwood/W hotels and two

new brands from Procter & Gamble.



Stanmyre expects 70% growth from the consumer group this year, which has

been split into four divisions: travel and leisure, lifestyle marketing,

multicultural marketing and consumer technology.



GCI also spun off its NY-based healthcare practice from parent Grey

Advertising in the last quarter of 1998, which ’took off like a rocket,’

according to Ken Willis, president of GCI’s North American operations

and interim New York GM. EVP/MD Bob Pearson came on board in the summer

of 1998 to co-head the practice alongside Ilyssa Levins, chairman and

chief creative officer.



In early 1999, GCI acquired crisis/issues management firm Kamer Singer

and employee communications firm BoxenBaum Grates. According to SVP

Aaron Kwittken, the New York corporate practice has doubled in size over

the past year. Research firm Berrier Associates, acquired in March, has

set up a presence in GCI’s New York office, but remains based in

Philadelphia.



New York PR is enormous: the top 60 firms billed half a billion (dollars

507 million) in 1998. But this market features a particular high number

of medium-size companies. And judging by the number of successful

start-ups, and growth of medium-size agencies, like Manhattan itself,

there’s room for them all - provided they build up.



Additional research by Kelly Holman, Claire Atkinson, Matthew Boyle and

John Frank



THE TOP 60 NEW YORK PR AGENCIES

Rank     Company                            NY income             Change

1997 1998                                        1998        1997      %

1    2   Edelman Public Relations          41,213,135  36,957,905     12

2    1   Ruder Finn                        40,510,000  37,500,000      8

3    3   BSMG Worldwide                    31,094,869  25,987,500     20

4    4   Ketchum                           28,734,000  23,747,000     21

5    N/A Porter Novelli                    24,920,678         N/A    N/A

6    5   Hill and Knowlton                 23,100,000  20,800,000     11

7    N/A Citigate Dewe Rogerson (Incepta)  20,932,000         N/A    N/A

8    6   Fleishman-Hillard                 19,119,000  16,286,000     17

9    N/A Manning Selvage & Lee             18,216,500         N/A    N/A

10   N/A Morgan-Walke Associates           17,743,326         N/A    N/A

11   7   Rowland Worldwide                 16,136,000  15,985,000      1

12   10  Cohn & Wolfe                      15,924,807  11,243,000     42

13   8   GCI/APCO                          15,527,803  13,864,176     12

14   9   Ogilvy PR Worldwide               14,779,000  13,540,000      9

15   12  Shandwick International           10,813,000   8,964,000     21

16   11  Dan Klores Associates             10,393,000   9,027,000     15

17   13  Sciens Worldwide Public Relations 10,054,000   8,292,000     21

18   18  Golin/Harris International         9,200,000   5,000,000     84

19   N/A KCSA Public Relations Worldwide    8,960,000         N/A    N/A

20   16  Chandler Chicco Agency             8,735,194   6,891,828     27

21   17  Noonan/Russo Communications        7,930,000   6,800,000     17

22   15  Makovsky & Company*                7,100,000   7,023,000      1

23   14  Stratis/KPR                        6,367,000   7,803,000    -18

24   19  Cairns & Associates*               5,510,073   4,412,115     25

25   28  Middleberg & Associates            5,196,231   3,191,650     63

26   20  DeVries Public Relations*          5,069,182   4,261,714     19

27   N/A Kratz & Jensen                     5,004,565         N/A    N/A

28   29  Cooney/Waters Group*               4,743,355   2,854,674     66

29   22  Lobsenz Stevens                    4,616,276   4,032,800     14

30   23  GS Schwartz & Co.                  4,003,507   3,950,000      1

31   25  M. Booth & Associates              3,905,157   3,607,266      8

32   21  Gibbs & Soell                      3,895,000   4,114,000     -5

33   26  Alan Taylor Communications         3,801,049   3,370,566     13

34   30  LaForce & Stevens                  3,747,848   2,838,550     32

35   24  Patrice Tanaka & Company           3,711,700   3,705,876      0

36   33  Stanton Crenshaw Comms.            3,200,000   2,000,000     60

37   32  Issuesphere                        3,113,849   2,599,492     20

38   N/A Geduldig & Ferguson                3,034,084         N/A    N/A

39   27  Lou Hammond & Associates           2,951,000   3,311,000    -11

40   31  Hunter & Associates                2,603,524   2,747,171     -5

41   39  PepperCom                          2,542,861   1,672,302     52

42   36  Gilliatt & Campbell*               2,400,000   1,800,000     33

43   37  Eric Mower & Associates            2,030,022   1,794,858     13

44   40  Sumner Rider & Associates*         1,942,732   1,631,415     19

45   34  Middleton & Gendron                1,859,521   1,882,951     -1

46   44  Southard Communications*           1,850,000   1,200,000     54

47   47  Cone Communications                1,807,000   1,100,000     64

48   41  Spring O’ Brien                    1,775,000   1,591,000     12

49   38  Collins & Company                  1,743,000   1,705,331      2

50   35  Bliss, Gouverneur & Associates     1,662,796   1,845,074    -10

51   45  Earle Palmer Brown PR              1,600,000   1,200,000     33

52   46  Linden Alschuler & Kaplan*         1,505,000   1,150,000     31

53   43  Sawchuk, Brown Associates*         1,484,565   1,383,245      7

54   42  Vorhaus & Company                  1,460,786   1,542,848     -5

55   48  Donley Communications Corp.*       1,312,524   1,093,110     20

56   N/A The Kamber Group*                  1,275,000         N/A   N/AC

57   49  Cooper Katz                          993,442   1,048,656     -5

58   50  Bender/Helper Impact                 959,402     954,436    1CA

59   51  Access Communications                903,029     723,995     25

60   N/A Neale-May & Partners*                788,000         N/A    N/A

Rank     Company                                     Total income    NY%

1997 1998                                                    1998   1998

1    2   Edelman Public Relations                     101,868,218     40

2    1   Ruder Finn                                    45,601,000     89

3    3   BSMG Worldwide                               109,537,000     28

4    4   Ketchum                                      101,485,000     28

5    N/A Porter Novelli                                85,235,570     29

6    5   Hill and Knowlton                            113,000,000     20

7    N/A Citigate Dewe Rogerson (Incepta)              23,514,000     89

8    6   Fleishman-Hillard                            136,272,000     14

9    N/A Manning Selvage & Lee                         50,173,300     36

10   N/A Morgan-Walke Associates                       23,143,604     77

11   7   Rowland Worldwide                             16,136,000    100

12   10  Cohn & Wolfe                                  25,981,976     61

13   8   GCI/APCO                                      44,539,245     35

14   9   Ogilvy PR Worldwide                           54,457,700     27

15   12  Shandwick International                       91,485,000     12

16   11  Dan Klores Associates                         10,393,000    100

17   13  Sciens Worldwide Public Relations             10,054,000    100

18   18  Golin/Harris International                    45,249,000     20

19   N/A KCSA Public Relations Worldwide                9,290,000     96

20   16  Chandler Chicco Agency                         8,735,194    100

21   17  Noonan/Russo Communications                    8,230,000     96

22   15  Makovsky & Company*                            7,100,000    100

23   14  Stratis/KPR                                    6,367,000    100

24   19  Cairns & Associates*                           5,510,073    100

25   28  Middleberg & Associates                        5,196,231    100

26   20  DeVries Public Relations*                      5,069,182    100

27   N/A Kratz & Jensen                                 6,192,972     81

28   29  Cooney/Waters Group*                           4,743,355    100

29   22  Lobsenz Stevens                                4,616,276    100

30   23  GS Schwartz & Co.                              4,003,507    100

31   25  M. Booth & Associates                          3,905,157    100

32   21  Gibbs & Soell                                 11,689,000     33

33   26  Alan Taylor Communications                     3,801,049    100

34   30  LaForce & Stevens                              3,747,848    100

35   24  Patrice Tanaka & Company                       3,952,000     94

36   33  Stanton Crenshaw Comms.                        3,200,000    100

37   32  Issuesphere                                    3,708,000     84

38   N/A Geduldig & Ferguson                            3,034,084    100

39   27  Lou Hammond & Associates                       2,951,000    100

40   31  Hunter & Associates                            2,603,524    100

41   39  PepperCom                                      2,542,861    100

42   36  Gilliatt & Campbell*                           2,400,000    100

43   37  Eric Mower & Associates                        2,030,022    100

44   40  Sumner Rider & Associates*                     1,942,732    100

45   34  Middleton & Gendron                            1,859,521    100

46   44  Southard Communications*                       1,850,000    100

47   47  Cone Communications                            6,312,000     29

48   41  Spring O’ Brien                                1,775,000    100

49   38  Collins & Company                              1,743,000    100

50   35  Bliss, Gouverneur & Associates                 1,662,796    100

51   45  Earle Palmer Brown PR                          8,800,000     18

52   46  Linden Alschuler & Kaplan*                     1,505,000    100

53   43  Sawchuk, Brown Associates*                     1,484,565    100

54   42  Vorhaus & Company                              1,460,786    100

55   48  Donley Communications Corp.*                   1,312,524    100

56   N/A The Kamber Group*                             11,962,300     11

57   49  Cooper Katz                                      993,442    100

58   50  Bender/Helper Impact                           4,797,001     20

59   51  Access Communications                          6,800,000     13

60   N/A Neale-May & Partners*                          4,900,000     16

Rank     Company                        Total income  NY%   Headquarters

1997 1998                                       1997 1997

1    2   Edelman Public Relations         86,833,594   43    Chicago, IL

2    1   Ruder Finn                       42,650,000   88   New York, NY

3    3   BSMG Worldwide                   58,136,000   45   New York, NY

4    4   Ketchum                          78,769,000   30   New York, NY

5    N/A Porter Novelli                   66,594,342  N/A   New York, NY

6    5   Hill and Knowlton               103,100,000   20   New York, NY

7    N/A Citigate Dewe Rogerson (Incepta)        N/A  N/A   New York, NY

8    6   Fleishman-Hillard               115,193,000   14  St. Louis, MO

9    N/A Manning Selvage & Lee            37,767,050  N/A   New York, NY

10   N/A Morgan-Walke Associates          19,606,544  N/A   New York, NY

11   7   Rowland Worldwide                15,985,000  100   New York, NY

12   10  Cohn & Wolfe                     21,533,360   52   New York, NY

13   8   GCI/APCO                         37,786,457   37   New York, NY

14   9   Ogilvy PR Worldwide              33,053,000   41   New York, NY

15   12  Shandwick International          80,292,000   11   New York, NY

16   11  Dan Klores Associates             9,027,000  100   New York, NY

17   13  Sciens Worldwide Public Relations 8,292,000  100   New York, NY

18   18  Golin/Harris International       42,088,000   12    Chicago, IL

19   N/A KCSA Public Relations Worldwide   8,700,000  N/A   New York, NY

20   16  Chandler Chicco Agency            6,891,828  100   New York, NY

21   17  Noonan/Russo Communications       6,800,000  100   New York, NY

22   15  Makovsky & Company*               7,023,000  100   New York, NY

23   14  Stratis/KPR                       7,803,000  100   New York, NY

24   19  Cairns & Associates*              4,412,115  100   New York, NY

25   28  Middleberg & Associates           3,191,650  100   New York, NY

26   20  DeVries Public Relations*         4,261,714  100   New York, NY

27   N/A Kratz & Jensen                    5,003,115  N/A   New York, NY

28   29  Cooney/Waters Group*              2,854,674  100   New York, NY

29   22  Lobsenz Stevens                   4,032,800  100   New York, NY

30   23  GS Schwartz & Co.                 3,950,000  100   New York, NY

31   25  M. Booth & Associates             3,607,266  100   New York, NY

32   21  Gibbs & Soell                    10,817,598   38   New York, NY

33   26  Alan Taylor Communications        3,370,566  100   New York, NY

34   30  LaForce & Stevens                 2,838,550  100   New York, NY

35   24  Patrice Tanaka & Company          4,051,000   91   New York, NY

36   33  Stanton Crenshaw Comms.           2,000,000  100   New York, NY

37   32  Issuesphere                       2,739,000   95   New York, NY

38   N/A Geduldig & Ferguson                     N/A  N/A   New York, NY

39   27  Lou Hammond & Associates          3,311,000  100   New York, NY

40   31  Hunter & Associates               2,747,171  100   New York, NY

41   39  PepperCom                         1,672,302  100   New York, NY

42   36  Gilliatt & Campbell*              1,800,000  100   New York, NY

43   37  Eric Mower & Associates           1,794,858  100   Syracuse, NY

44   40  Sumner Rider & Associates*        1,631,415  100   New York, NY

45   34  Middleton & Gendron               1,882,951  100   New York, NY

46   44  Southard Communications*          1,200,000  100   New York, NY

47   47  Cone Communications               5,785,000   19     Boston, MA

48   41  Spring O’ Brien                   1,591,000  100   New York, NY

49   38  Collins & Company                 1,705,331  100    Buffalo, NY

50   35  Bliss, Gouverneur & Associates    1,845,074  100   New York, NY

51   45  Earle Palmer Brown PR             6,500,000   18  Greenwich, CT

52   46  Linden Alschuler & Kaplan*        1,150,000  100   New York, NY

53   43  Sawchuk, Brown Associates*        1,383,245  100     Albany, NY

54   42  Vorhaus & Company                 1,542,848  100   New York, NY

55   48  Donley Communications Corp.*      1,093,110  100   New York, NY

56   N/A The Kamber Group*                10,785,000  N/A  Washington,DC

57   49  Cooper Katz                       1,048,656  100   New York, NY

58   50  Bender/Helper Impact              4,742,175   20 Los Angeles,CA

59   51  Access Communications             6,000,000   12  San Francisco

60   N/A Neale-May & Partners*             4,800,000  N/A  Palo Alto, CA



Auditing: We do not accept entries unless the company’s CPA has approved

them, either in the form of a full audit or a review. An * denotes that

only the 1998 income has been audited. This is because in some instances

we have accepted figures supplied by the Council of Public Relations for

its industry rankings. We are indebted to the Council and the New York

accountants Rick Gould & Associates for their help in compiling this

information.



Disclaimer: While every effort has been made to ensure the accuracy of

these figures, PRWeek cannot make financial guarantees, nor does it

accept liability.



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