MARKET FOCUS: ST. LOUIS - New spirits of St. Louis Fleishman-Hillard dominates the St. Louis PR scene. But there is more to the city on the Mississippi than one giant agency. John Frank reports.

Surviving in the backyard of a giant requires being nimble. Just ask the PR firms based in St. Louis, hometown of PR giant Fleishman-Hillard International Communications. Fleishman’s income dwarfs that of other PR firms in this Mississippi River city. Its nearest competitor, Shandwick, can only manage about a tenth of F-H’s St. Louis billings.

Surviving in the backyard of a giant requires being nimble. Just ask the PR firms based in St. Louis, hometown of PR giant Fleishman-Hillard International Communications. Fleishman’s income dwarfs that of other PR firms in this Mississippi River city. Its nearest competitor, Shandwick, can only manage about a tenth of F-H’s St. Louis billings.

Surviving in the backyard of a giant requires being nimble. Just

ask the PR firms based in St. Louis, hometown of PR giant

Fleishman-Hillard International Communications. Fleishman’s income

dwarfs that of other PR firms in this Mississippi River city. Its

nearest competitor, Shandwick, can only manage about a tenth of F-H’s

St. Louis billings.



But PR in St. Louis is about more than just Fleishman. A variety of

other firms are prospering by going after niche business - especially in

the emerging agricultural sciences, health care and Internet sectors.

’Unless you have a niche, you get overwhelmed by F-H,’ explains Katie

Burckhalter, president of the local PRSA chapter.



PR firms occasionally win business from some of the same corporate

giants that work with Fleishman, as those companies farm out more and

more projects.



Agencies are also looking outside the city for clients.



’There’s very healthy competition here,’ says Cathy Dunkin, a principal

with The Standing Partnership, a St. Louis PR firm. ’There’s enough work

for everybody.’



There is also a ready supply of new talent, with three local

universities pumping out PR or communications majors and other schools -

such as Southern Illinois University - nearby. Salaries for entry-level

PR people are in the dollars 20,000 to dollars 25,000 range, with as

much as a dollars 10,000 premium for people with Web experience,

according to Kit Jenkins, an associate professor and head of the PR

program at Webster University in St. Louis. Salaries in the three- to

five-year experience range are around dollars 40,000 and account

supervisors earn dollars 60,000.



While PR internships in the city were scarce a decade ago, today

students often work for two or three before graduating, says Leise

Hutchison, a professor in the department of communications at St Louis

University.



Fleishman alone takes on 45 interns each year.



St. Louis is a major corporate headquarters town, ranking fourth on the

Fortune 500 list in terms of companies based there. Many of those majors

have been Fleishman clients. But today they’re doing more PR outsourcing

and tapping a variety of firms to work on different projects.



Corporate residents like Monsanto and Ralston Purina have also served as

training grounds for PR people who have gone on to start their own

agencies. Interestingly, St. Louis has a high proportion of PR

operations run by women, often started by those trying to balance work

and family who felt there was little chance for advancement in

conservative St. Louis.



Tech offshoots



There are an increasing number of new technology companies - offshoots

of the agricultural and aerospace industries that long have dominated

the local economy. McDonnell Douglas, now owned by Boeing but once a St.

Louis corporate mainstay, nurtured the city’s aerospace base, while

Monsanto and the Missouri Botanical Gardens trained agricultural and

biotech experts who have gone on to make the city a hub for new

businesses in those sectors.



After a relatively slow year in 1998 (with the top five firms growing by

only 5.7% against a national average of 24%), local experts see PR

revenues growing in the 10% to 20% range this year. Income for St. Louis

PR firms grew 6.5% in 1998 to around dollars 49.45 million compared with

1997’s dollars 46.43 million. The St. Louis Business Journal, which also

looks at PR revenues at ad agencies, puts the market at more than

dollars 56 million in annual revenues for the 10 largest firms.



Still, St. Louis is a relative latecomer to the PR boom sweeping the

rest of the country. Blame that on the conservative Midwest nature of

many of its corporations, says Jon Sloane, general manager at the

six-person St. Louis office of Cushman/Amberg.



’They would gather the wagons in a circle and just hope the media

wouldn’t come,’ he says of St. Louis corporate thinking a decade or so

ago.



Ron O’Connor, a 25-year veteran of the St. Louis PR scene who now runs

his own local firm, O’Connor & Partners, agrees. He says that 10 years

ago, when PR firms started to multiply in cities like Minneapolis,

Cleveland and even Kansas City, St. Louis was still largely a Fleishman

town. But in recent years, as businesses have consolidated and new

enterprises have emerged, attitudes towards PR have changed and new

firms have sprung up.



’The appreciation of PR is slowly growing in the corporate world,’ says

Ann Tretter, president of the Tretter Group. Middle market companies are

searching for more PR help, spurred by the speed with which the Internet

spreads information - and misinformation - about a company.



Tretter is also experiencing demand in the area of marketing

communications.



’Everyone in St. Louis does marketing PR,’ she says. Her firm normally

goes after business below the Fortune 500 level and has made a push in

the service sector, handling accounts such as the Visiting Nurses

Association.



The Standing Partnership’s Cathy Dunkin started her firm in 1991 after

working for such local corporations as Monsanto and Ralston Purina, as

well as Golin/Harris and Hill & Knowlton. With dollars 1.3 million in PR

fees and 15 people, she sees her organization as a midsize firm that can

compete for a variety of business.



Kupper Parker Communications has set itself up as a ’super-regional,’

says Mary Scholz Barber, director of KPC PR. With offices in Kansas

City, Columbus, OH, Louisville, Nashville and New Orleans, it realized

PR income of roughly dollars 3.1 million in its last fiscal year,

compared to dollars 2.5 million in its fiscal 1997. Kupper Parker offers

a full range of communications services, including direct marketing and

advertising. Barber also sees the healthcare market as a major growth

area in St. Louis PR.



Donna Vandiver, founder of the Vandiver Group, says she’s built her

business by providing corporate value statements and helping companies

define their corporate cultures. She works with a broad range of

clients, but finds many in the dollars 1 billion to dollars 5 billion

sales category. St. Louis PR business has picked up considerably the

past three years, she says, with her firm realizing growth of 57% from

1996 to 1998.



Fleishman still thrives



So what about Fleishman? Its St. Louis office - which is also its

corporate HQ - has 34 people at either partner or senior partner level,

with an average tenure of 13 years. ’That enables us to go out and win

and serve new business,’ says Bill Anderson, general manager of the St.

Louis office and regional president. ’We can bring the whole spectrum of

service,’ adds Dave Senay, an EVP and senior partner.



The firm’s 1998 performance was modest, with income up 7%, against

nationwide growth of 18% for FH. The St. Louis office now accounts for

30% of the business.



As the St. Louis business environment has changed, so has Fleishman.



It has taken on more small-to-midsize clients and has a thriving

interactive operation aimed at Internet activities. It has also reached

beyond St. Louis, handling such accounts as Wal-Mart of Arkansas and

Texas-based Dell Computers. ’Our size gives us a lot of depth and

diversity,’ Anderson says of the St. Louis office. Indeed, it can

provide any of Fleishman’s specialties, which include corporate and

financial PR, marketing communications, internal communications and

healthcare.



Fleishman has 365 employees in St. Louis. About 100 of those are

strictly PR people, with roughly 155 considered account staff, including

designers and research people. It’s a formidable array of talent - and

the agency offers perks such as paid daily parking and weekly massages

to keep its turnover down to a lower than industry average of 14% a

year.



Other national firms which tried to compete in St. Louis, notably

Edelman and Hill & Knowlton, have since pulled out. They failed because

they never became part of the St. Louis business world, believes PR

veteran O’Connor.



’It was out-of- town folks trying to change the St. Louis way of doing

business,’ he says. Webster University’s Kit Jenkins agrees. ’It’s a

conservative town. It’s an old-boys network and Fleishman is very tied

in.’



Today, Shandwick is the only other major national with a presence. It

bought a local firm several years ago, a strategy which may have helped

it avoid the pitfalls other out-of-towners faced. Shandwick’s office

ranks second to Fleishman in St Louis, with roughly dollars 4 million in

PR income last year.



Dan Harrison, St. Louis managing director for Shandwick, says he’s

stressing the strategic approach to PR. Shandwick also has an

interactive operation in St. Louis, seeing it as a growth opportunity

for its 50-person office.



’There are a lot of opportunities out there,’ he says.



That’s what most PR people in St. Louis are saying. They’re not

boasting, mind you - that would run counter to their Midwest character.

Missouri, after all, is called the ’Show-Me’ state.





St. Louis’ Fortune

500 Companies

COMPANY                          Fortune Ranking

Emerson Electric                             118

May Department Stores                        120

Anheuser-Busch                               150

Monsanto                                     187

Ralston Purina                               293

Genamerica                                   392

Graybar Electric                             404

Clark USA                                    414

Ameren                                       444

TransWorld Airlines                          454

ARCH DELUXE: THE TOP FIVE PR FIRMS IN ST. LOUIS

98    Company                               St Louis Income            %

Rank                                          1998         1997   Change

1     Fleishman-Hillard                 40,349,000   37,713,000        7

2     Shandwick International            4,045,000    4,357,000       -7

3     Kupper Parker Communications       2,557,531    2,338,508        9

4     The Standing Partnership*          1,276,774    1,325,355       -4

5     The Vandiver Group                   874,518      694,372       26 

98    Company                            1998     St         1997     St

Rank                                US income  Louis    US Income  Louis

                                                   %                   %

1     Fleishman-Hillard           136,272,000     30  115,193,000     33

2     Shandwick International      91,485,000      4   80,292,000      5

3     Kupper Parker Communications  3,100,261     82    2,481,007     94

4     The Standing Partnership*     1,276,774    100    1,325,355    100

5     The Vandiver Group              874,518    100      694,372    100

* figures supplied by the Council of Public Relations Firms.



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