MARKET FOCUS: SEATTLE - Northwest explosion. Once better known for forestry and flannel, Seattle is experiencing an unprecedented boom driven by coffee, computers and cash. Aimee Grove reports

Seattle is the city of the moment. The rise of companies like Microsoft, Starbuck’s and Amazon.com and the growing influx of ex-Californians eager to escape clogged freeways and inflated real estate prices has thrust this drizzly city into the national spotlight. The fact that Fortune deemed Seattle ’the best place to live and work’ in 1996 and Money Magazine called it ’the best West Coast city to live in’ in 1998 has boosted the hype.

Seattle is the city of the moment. The rise of companies like Microsoft, Starbuck’s and Amazon.com and the growing influx of ex-Californians eager to escape clogged freeways and inflated real estate prices has thrust this drizzly city into the national spotlight. The fact that Fortune deemed Seattle ’the best place to live and work’ in 1996 and Money Magazine called it ’the best West Coast city to live in’ in 1998 has boosted the hype.

Seattle is the city of the moment. The rise of companies like

Microsoft, Starbuck’s and Amazon.com and the growing influx of

ex-Californians eager to escape clogged freeways and inflated real

estate prices has thrust this drizzly city into the national spotlight.

The fact that Fortune deemed Seattle ’the best place to live and work’

in 1996 and Money Magazine called it ’the best West Coast city to live

in’ in 1998 has boosted the hype.



But how has all this attention - and the booming economy - affected the

local PR market? And what does the future hold?



’Ten years ago, most Seattle PR was advertising’s red-headed stepchild.

The big money was with banking, healthcare or government industries,’

reports Paul Owens, president of Owens Media and a seasoned veteran of

the Seattle scene. ’Today, PR agency revenues are growing almost twice

as fast as those of ad agencies here, and the big money is in

hi-tech.’



The numbers confirm Owens’ claims. According to data from the Puget

Sound Business Journal’s Book of Lists, total revenue for the top 25

Seattle PR agencies in 1987 was about dollars 11.6 million, with only

119 employees among them. Today, the figure is closer to dollars 86

million and 575 employees. Traditional consumer and corporate-oriented

firm The Rockey Company headed the 1987 agency list, with dollars 2.5

million and 38 employees. Today, top-rated Waggener Edstrom, brings in

dollars 40.9 million and boasts about four times as many employees in

Washington alone.



Media, money & marketing



Obviously, the growth of Microsoft turned the whole economy, business

climate and PR scene here upside down. And while the Wag Ed/ Microsoft

connection has been covered at length, less has been written about the

media attention, money and marketing talent that both companies have

drawn to the Northwest. That’s not even accounting for the influence of

the ’Baby Bills’ - Microsoft millionaires starting their own

ventures.



Where you find dot.com and other start-ups hungry for press and funding,

you inevitably find new agencies eager to feed them. Those who were

first to identify this potential are now among the biggest grossing

agencies in town. Firms which opened their doors in the early 1990s

include MWW/Savitt, now the city’s third-largest PR firm, with about

dollars 4.7 million in 1998 income and 40 employees; Imagio Technology,

a dollars 4 million integrated agency with 60 employees; and the

seventh-ranked KMC Group.



’When I first moved out here from New York, Seattle was dominated by

major corporate players like Boeing,’ recalls Kathy Savitt, who opened

her branch of the New Jersey-based MWW Group in 1993. ’The whole PR

industry was dominated by two or three regional firms run by white men

in suits who had all gone to University of Washington together. I saw

the need for a strong, independent, national agency.’ Today MWW/Savitt

has some of the city’s most high-profile clients, including uBarter.com,

Starbuck’s (regional work), Visio and the Seattle Supersonics.



Microsoft also helped raise the status of PR within the marketing

mix.



As people saw what Wag Ed had achieved for Gates and the company as a

whole, the entire PR profession gained respectability. ’PR plays a major

role in the hi-tech industry, and that has helped the whole field to

grow and gain recognition. Also, the talent here is at an all-time

high,’ says Jay Rockey, chair of what is probably the city’s oldest and

most traditional PR firm, The Rockey Company.



While major manufacturing and transportation companies like Boeing and

financial institutions like Washington Mutual remain important to

Seattle’s bottom-line, these have declined as economic influencers. In

fact, here - as in Silicon Valley - the real growth engine is emerging

business, mostly the Internet and e-commerce.



Copithorne & Bellows GM Will Ludlam confirms: ’Six or seven years ago,

the smaller tech companies were just niche players and Seattle was more

of a faraway outpost. Now because of the Internet business, that’s

changing. Bigger players are entering the market, making it more

competitive and driving the salaries up.’



Ludlam joined to open the Seattle office in 1997. Over the past two

years, C&B has increased business by more than 300%, and the office

already boasts a roster of clients such as HP, Itronix and Aris

Corporation.



C&B is not the only major national agency to have smelled opportunity in

so-called Silicon Northwest. Within just the past four years, such

global players as Shandwick, APCO, Text 100 and Edelman have set up shop

or made acquisitions in Seattle to mine the e-commerce fields.



Scrambling for talent



The arrival of these big guns, along with the need to compete with

start-ups offering pre-IPO stock, has sent local agencies scrambling for

talent - and paying more for it. According to data from a recent Gould &

Company survey, Seattle agencies pay an average of dollars 50,000 for

VPs, dollars 48,000 for account supervisors and dollars 36,000 for AEs.

On the corporate side, the average salaries for PR managers and

directors has risen at least 20 % in the past year, with directors

typically commanding salaries of dollars 120,000 plus benefits.



For all of its similarities to the Bay Area, Seattle’s PR scene does

possess several unique characteristics. First of all, perhaps because of

its extreme northern latitude and reputation as the one of the last

Western frontiers, it’s often described as a haven for pioneer

spirits.



’Seattle has historically been a city that supports innovation. Because

it’s so far out of the way, people come here seeking a different kind of

life, and have always been strong supporters of new business,’ says Ted

Leonhardt, principal of The Leonhardt Group, a Seattle-based graphic

design firm that collaborates with many PR firms.



Local headhunter Judith Cushman adds: ’There are very few old-line

companies, and even non-hi-tech companies here, like REI or Starbucks,

are relatively unconstricted by history and the traditional ways of

doing things. People have more of a short-term focus, rather than

thinking in terms of a career track. The attitude is ’Who knows where

this company will be in two years? It may go public and then I will take

off and go sailing for two years.’’



Despite the arrival of more and more national and multinational players,

Seattle remains somewhat of a provincial, untapped market. For example,

where is BSMG? What about Fleishman-Hillard? These, along with Burson

Marsteller, Golin-Harris, Hill & Knowlton and Ruder Finn are all

conspicuously absent. Even major Boston and/or California-based hi-tech

agencies such as Cunningham, Weber, Fitz-Gerald and Blanc & Otus have

yet to arrive.



Those that do enter the market are willing to throw out the old

separation of church and state, forging PR, advertising and other forms

of marketing into integrated practices. Unlike in Silicon Valley or San

Francisco, integrated agencies figure highly in the top 10 rankings and

are some of the city’s biggest success stories. Publicis Dialog,

MWW/Savitt, Imagio Technology and Elgin DDB have all successfully

combined disciplines - and revenues - under one roof.



While Seattle may be dominated by hi-tech, that’s not all there is to

its thriving PR scene. It is also the home of such major retailers as

Nordstrom’s, Eddie Bauer, Starbuck’s and Tully’s, and the site of large

agricultural interests. One of the top five agencies in town, Publicis

Dialog (formerly the Evans Group), specializes in consumer food and

agricultural accounts, grossing about dollars 4 million per year on work

with clients such as Nestle, the Washington Potato Board, PetSmart and

Gardenburger.



Neglected niches



Others, such as Richmond PR, have found a niche in the areas that

everyone else has neglected or abandoned. Founded in 1992, the

20-person, dollars 1 million firm handles mainly restaurant and

hospitality clients such as Starwood Hotels, DaVinci Gourmet and the

Restaurants Unlimited chain. According to CEO Louis Richmond, the influx

of young, wealthy entrepreneurs has given his agency’s area of expertise

a major boost. ’You have all these successful software entrepreneurs

deciding they wanted better food. Money is pouring in to the restaurant

business,’ he says.



There is still room for traditional business PR. The Rockey Company has

maintained its success by developing a senior consultancy role. The

agency, founded in 1962, provides high-level strategic corporate

communications and crisis/issues management for corporate clients such

as Brooks Sports, Washington Mutual and Boeing.



Some of the biggest growth in Seattle has come from the public affairs

arena. For example, since selling his international trade PR firm TRADEC

to APCO Associates 18 months ago, president Scott Jackson reports that

the agency has grown from a 12-employee, dollars 1 million firm to a

60-person, dollars 6 million (1999 figures) full-service public affairs

agency. As in SF, even the hi-tech firms are experiencing demand for

these services.



’Tech companies are becoming more sensitive to the need for connecting

with government audiences and for considering things like Internet

taxation.



Also, post-Microsoft, regulatory issues have become a huge deal. This

will only increase in the next ten years,’ predicts Savitt, whose public

affairs practice is booming.



Tech of course will continue to be king here, especially technologies

within the wireless, broadband and telecom-wireless convergence. But as

in San Francisco, growth in the consumer tech arena - and movement into

consumer tech by old-line companies - is good news for everyone. Steve

Bryant, president of the Seattle chapter of PRSA and an account

supervisor at Publicis Dialog quips, ’The dot.com companies care more

about being on the Today show than on the cover of PC Week.’



With all the promising business to be won, it seems inevitable that more

of the major players will raid the Seattle PR picnic.





PACIFIC NORTHWEST HEIGHTS: Top 10 Seattle PR agencies

98    COMPANY                             1998           1997          %

Rank                                    Income         Income     Change

1     Waggener Edstrom+             40,900,000            N/A        N/A

2     Shandwick Intl                 5,711,000      5,469,000          4

3     The MWW Group                  4,704,107      4,306,000          9

4     Publicis Dialog                4,018,300      3,979,100          1

5     The Rockey Company*            2,656,381      2,800,000         -5

6     Gogerty Stark Marriott*        2,286,090      1,900,000         20

7     GCI/APCO                       2,045,000        250,000        718

8     Imagio                         1,430,000      1,260,000         13

9     The KMC Group*                 1,240,212      2,100,000        -41

10    The Wiley Brooks Co.*          1,016,600        885,500         15

98   COMPANY                        1998      1998        1997      1997

Rank                           US income  Seattle%   US Income  Seattle%

1    Waggener Edstrom+        40,900,000       N/A         N/A       N/A

2    Shandwick Intl           91,485,000         6  80,292,000         7

3    The MWW Group            17,220,267        27  14,367,000        30

4    Publicis Dialog          11,403,700        35  10,817,598        37

5    The Rockey Company*       3,996,209        66   4,046,204        69

6    Gogerty Stark Marriott*   2,286,090       100   1,900,000       100

7    GCI/APCO                 44,539,245         5  37,786,457         1

8    Imagio                    1,430,000       100   1,260,000       100

9    The KMC Group*            1,240,212       100   2,100,000       100

10   The Wiley Brooks Co.*     1,016,600       100     885,500       100

*Figures supplied by the Council of PR Firms Partial year income in 97 +

Figures reflect income from offices in Oregon, California, Washington

and Germany.



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