With mergers and acquisitions changing the competitive landscape on both the client and agency side and a number of start-ups entering the game, Boston is delicately positioned.
With mergers and acquisitions changing the competitive landscape on
both the client and agency side and a number of start-ups entering the
game, Boston is delicately positioned.
On the one hand, acquisitions such as BankBoston (by Fleet) and Digital
(by Compaq) are transforming Boston from a rich region of Fortune 500
companies into a regional office city. On the other hand, it
traditionally competes with Silicon Valley for the title of hi-tech hub
- companies include Lycos, Lotus, Polaroid and Raytheon. Others, like
Xerox, have major division in the Massachusetts region.
According to the Greater Boston Chamber of Commerce, nearly 180,000
people are employed by the region’s hi-tech companies, and more than
half work in the software industry. But even this predominance is being
Boston is now only the fourth-biggest center of hi-tech activity, after
Silicon Valley, Dallas and Los Angeles, according to the LA-based Milken
But it’s not a one-industry town. With approximately 100 biotechnology
firms, Boston has the nation’s second largest biotech revenue.
Healthcare is the largest employer in the state, creating nearly one out
of every seven jobs, and Boston is home to world-class hospitals such as
Mass General Hospital and Brigham and Women’s Hospital.
And the city is one of the nation’s top financial centers, home to
Fidelity Investments and Putnam Investments. More than 25% of all US
mutual fund assets are managed by Boston firms. The nonprofit sector
also plays an important role. And on the consumer front, Gillette, Ocean
Spray and Saucony are major brand names.
What this combination is doing for business is a bit difficult to
Figures from PRWeek’s Top 200 (see chart) show that the Top 25 Boston
agency offices had dollars 117 million of business in 1998. Stripping
out agencies that could not supply 1997 figures, growth was only 9%,
well below the 24% average nationwide. Looking at the Top 10 firms, and
stripping out Lois Paul and Schwartz, growth was a mere 4%. Clearly,
this is not an easy market right now.
What makes the market all the more tantalizing is that there is so much
potential for new business. Sixty-eight colleges and universities in and
around Boston, including MIT, Harvard University, and Tufts, have
spawned tech-savvy, business-minded individuals who are creating some of
the nation’s hottest start-ups. CEO John Brodeur of number one agency
Brodeur Porter Novelli advises: ’All agencies should try to do some work
with Internet companies. They could be the next Netscape, and if you
close your agency, you could miss the next wave of the technology
Combine this hi-tech savvy with the top communicators from Boston
University, Boston College, Emerson and Northeastern University, and
you’ve got the perfect blend of tech companies and PR support. Nine of
the 10 top agencies are hi-tech (consumer agency Cone is the exception).
Several of these have been bought out by larger global agencies in the
past decade (Brodeur, Weber, Miller Shandwick, Copithorne & Bellows).
But a number of big-name firms are still not represented in Boston,
including Burson-Marsteller, Ketchum and Edelman (although subsidiary
PR21 reports a dollars 54,000 presence). And while Hill & Knowlton
established a presence earlier this year by acquiring Blanc & Otus, H&K
has only succeeded after several attempts.
This lack of ’big boy’ agencies has enabled a new crop of independents
to take advantage of the flourishing tech market and establish their
reputation as hi-tech PR leaders, including Weber, Lois Paul & Partners
The biggest agency is Brodeur Porter Novelli, founded as Brodeur &
Partners in 1985, now employing 160 people and counting 35 clients from
its Boston headquarters. The agency’s 1998 income - dollars 15,942,000 -
grew 25% from 1997 and comprises approximately 54% of the agency’s US
income (see chart).
Focusing on technology, healthcare, consumer technology and
business-to-business, Brodeur’s clients include Pitney Bowes, IBM and
Number two ranked Weber Public Relations Worldwide, headquartered in
Cambridge, arrived on the scene in 1987.
It established its reputation in the late 80s helping Lotus launch Lotus
Notes, and it worked with Digital Equipment Corporation through the
mid-1990s, when CEO Larry Weber took the firm on a fiercely aggressive
expansion route that has seen Weber extend its PR tentacles to an
Now, with a reputation as a global hi-tech PR leader, servicing Gateway,
3Com and Lexmark, the agency saw its 1998 income increase 5% from 1997,
a modest growth especially by its own standards.
The agency has also worked with consumer clients, such as Marshall’s,
since the beginning. With 25 to 30 clients in Cambridge and 110 staff
members, the agency generated dollars 14,954,134 in 1998 revenue, 26% of
the agency’s US income.
Lois Paul & Partners’ Burlington, MA headquarters generates 89% of the
company’s income (dollars 11,965,627), although founder and president
Lois Paul says that will number will decrease as the agency grows its
Founded in 1986, the agency provides strategic relations and IR counsel
to 23 hi-tech companies, including Lotus Development Corporation, Tivoli
and Bell Atlantic Data Solutions Group.
Schwartz Communications, founded in 1990, focuses on emerging growth
companies. With 137 employees and clients including Lycos, GTE and
Hewlett-Packard, Schwartz derives nearly 78% of its dollars 11,646,113
income from Waltham.
FitzGerald, the newest agency in the top five, experienced 17% growth in
1998 vs. 1997, with 1998 income totaling dollars 7,660,365. Founded in
1994, the agency’s Cambridge headquarters generated 86% of the agency’s
With 70 employees in Cambridge and 50 clients shared between the
agency’s Cambridge, San Francisco and Washington, DC offices, FitzGerald
provides hi-tech PR and IR services. While it represents a few
multinational corporations, including Newbridge Networks and GTE
Internetworking, the agency generally works with small, emerging or
Several agencies, including Brodeur, FitzGerald and Schwartz say they
are turning away as much as 80-90% of new business opportunities because
they don’t have the staff to service the work.
Aftermath of acquisitions
But it’s not all rosy in the hi-tech garden. M&As have greatly affected
many Boston agencies, particularly the mid-size ones.
’Four or five years ago, we used to do PR for the Route 128 giants -
Wang, Digital, Prime Computers, the leaders in this industry,’ says
Sterling Hager EVP Jim Joyal. ’As their business went, so went ours.
Then, they were not in a position to afford our fees, and they had to
downsize or take PR in-house.’
For Miller/Shandwick the acquisition of Digital by Compaq brought a big
change in its fortunes in 1998. ’We used Compaq to go beyond the PC
hardware market, into the consumer tech space when Compaq launched its
first home PC product,’ says president Tony Sapienza. However, when
Compaq acquired Digital, Miller/Shandwick’s Boston office saw its income
decrease by 28% as the agency moved the business to its Houston office.
Today’s the agency is focusing on dot.com business, says Sapienza.
The merger also affected Golin/Harris, which opened its Boston office
primarily to service Digital. Following a downsizing and restructure
that shares administrative facilities with its New York practice, it is
now attempting to branch out to other practice areas such as financial
and business-to-business. With Miller Shandwick, TSI and Weber owned by
parent company Interpublic, it makes no sense to have a fourth competing
for tech, says general manager Richard Wolff of G/H New York.
Cunningham, which relies on large companies such as Motorola and IBM,
has also had trouble finding the large clients it is looking for in
’Boston has gone from a headquarters city to a regional office city,’
says Kristin Hilf, SVP/managing director for Cunningham’s Cambridge
office, which has no Boston-based clients. ’The large companies aren’t
headquartered here. Many have been purchased by West Coast companies. On
the flip side, there’s a lot of activity in the start-up arena. Their
budgets tend to be small, but the net companies are competing in a very
noisy market,’ she adds.
It’s the same story for financial institutions and their agencies.
McDermott O’Neill, which represents BankBoston, is unsure whether it
will retain the business once the merger with Fleet is completed, and is
currently researching other banks that may enter Boston.
Another source of competition generates from Chen PR, which opened in
Waltham in 1996. Chen is one agency that competitors say is causing them
to lie awake at night. With nine clients and 25 staff members, Chen is
ranked number 15 in the Boston market and boosted its 1997 income 60% in
1998 vs. 1997, from dollars 1,500,000 to dollars 2,400,000.
Fleishman-Hillard opened a two-person office in Boston in March 1997. By
the end of 1998, it was generating revenues of dollars 669,000, a 139%
increase from 1997. However, it comprises only 0.49% of the agency’s US
income, so it’s still a blip.
The agency currently employs six people, with plans to grow to 10 by the
end of this year, and services 14 clients, including Cellular One, SNET,
and Astra Pharmaceuticals.
UK-based Text 100 is also making waves. It arrived on the scene less
than two years ago, picking up hi-tech clients such as Xerox and
With 11 staff members, new GM Chris Nahil says the agency is generating
15% of Text 100’s global income and plans to double the office in terms
of revenue and employees.
While the number of hi-tech companies and agencies seems to outweigh
other industries, many of the public affairs and consumer agencies are
experiencing high growth, notably The Rasky Baerlein Group, which
recorded 65% growth.
Schneider & Associates, founded by Joan Schneider in 1980, specializes
in launch PR. The agency increased its revenue by 34%, from 1997 to
And with clients like Welch’s, Pepperidge Farms, CVS and Arthur
Andersen, Schneider is proving that hi-tech agencies in Boston aren’t
the only ones being selected by large multinationals.
Schneider says that with assignments increasingly spanning several
practice areas, she is now competing with almost all the agencies in
’Everyone in PR will be in the technology business, particularly with
the Internet,’ says Schneider. ’I don’t think assignments are all of any
one thing - consumer, business-to-business, technology, launch or crisis
communications. There’s an opportunity for hi-tech firms to work
hand-in-hand with other firms.’
Bishoff Solomon, established in 1989, represents major retail clients
such as Starbucks, and Yankee Candle; business-to-business clients
including Nextel and RE/MAX New England; and public affairs, non-profit
and crisis communication clients such as the city of Chelsea and Planned
McDermott O’Neill, founded in 1991, boasts more than 100 public affairs,
financial services, healthcare, real estate and transportation
With 40 employees in Boston, the agency is servicing Children’s
Hospital, Xerox and non-profit accounts like the Boston Food Bank.
According to Geri Denterlein, senior VP and managing director of
McDermott O’Neill, public affairs is a very strong segment in the Boston
’Boston corporations are so civic-minded and mindful of the public
process that public affairs firms have thrived,’ says Denterlein. ’I
predict that there will be a greater blending of public affairs firms
and hi-tech firms.’
She adds that any generalist PR firm not doing healthcare PR is missing
an important industry sector. Feinstein Kean Partners is the number two
specialized healthcare agency in the US, according to chairman Peter
Feinstein, and the 12th largest healthcare agency overall. Figures were
not supplied for these rankings, but the Boston Business Journal showed
revenues of dollars 9 million in 1998, up 50% from dollars 6 million the
Meanwhile IR agency Sharon Merrill Associates says that with an absence
of local IR firms, their business is thriving. ’The field of IR is
growing immensely,’ says Sharon Merrill VP Jim Buckley. ’Over the last
few years, there have been so many people going public, and all these
folks need to communicate with investors.’
So which area of agency business will be most profitable in the future?
’The start-up business in Massachusetts is second only to California,’
says Weber’s EVP Phil Greenough. ’A tremendous amount of innovation has
spawned a myriad of Internet, networking, software and telecom
But with so many mergers and acquisitions, perhaps the brightest future
is offered by healthcare.
FitzGerald says hospitals, HMOs and medical technology will remain as
hot as the demographics of the population drive healthcare.
’Biotech, like real estate, has had its ups and downs,’ adds
’It can make a big entry into the PR scene, but it hasn’t yet. It might
be one to watch out for in the next couple of years.’
Boston: the top 25 PR players
Rank Company 1998 Income 1997 Income %
1 Broudeur Porter Novelli 15,942,000 12,795,000 25
2 Weber PR 14,954,134 14,218,963 5
3 Lois Paul & Partners 11,965,627 N/A N/A
4 Schwartz Communications 11,646,113 N/A N/A
5 Fitzgerald Communications 7,660,365 6,562,592 17
6 Shandwick International 7,151,000 9,983,000 -28
7 Copithorne & Bellows 7,060,856 6,694,254 5
8 Golin/Harris International 4,600,000 4,800,000 -4
9 Cone Communications 4,505,000 4,685,000 -4
10 Cunningham Communications 4,120,000 3,975,964 4
11 The Rasky Baerlein Group 4,068,786 2,458,766 65
12 Agnew, Carter, McCarthy 3,656,451 3,040,996 20
13 Clarke & Co.* 3,287,470 2,970,000 11
14 BSMG Worldwide 2,840,000 2,758,000 3
15 Chen PR 2,400,000 1,500,000 60
16 Schnieider & Associates 2,158,875 1,615,841 34
17 BB&K 2,090,065 1,859,089 12
18 Manning Selvage & Lee 1,799,500 N/A N/A
19 Blanc & Otus* 1,795,763 N/A N/A
20 The Horn Group 1,023,000 566,801 80
21 Fleishman Hillard 669,000 280,000 139
22 Morgan Walke Assoc. 627,329 N/A N/A
23 KVO 500,000 N/A N/A
24 Technology Solutions** 355,800 234,000 52
25 KCSA 330,000 N/A N/A
Rank Company 98 US income 98 Bos- 97 US Income 97 Bos-
98 ton % ton %
1 Broudeur Porter Novelli 29,278,000 54 20,812,000 61
2 Weber PR 57,866,543 26 49,020,178 29
3 Lois Paul & Partners 13,482,032 89 N/A N/A
4 Schwartz Communications 15,019,646 78 10,930,159 N/A
5 Fitzgerald Communications 8,900,000 86 6,600,000 99
6 Shandwick International 91,485,000 8 80,292,000 12
7 Copithorne & Bellows 23,563,683 30 19,863,246 34
8 Golin/Harris International 48,612,000 9 47,327,000 10
9 Cone Communications 6,312,000 71 5,785,000 81
10 Cunningham Communications 20,437,000 20 17,390,000 23
11 The Rasky Baerlein Group 4,068,786 100 2,458,766 100
12 Agnew, Carter, McCarthy 3,656,451 100 3,040,996 100
13 Clarke & Co.* 3,287,470 100 2,970,000 100
14 BSMG Worldwide 109,537,000 3 58,136,000 5
15 Chen PR 2,400,000 100 1,500,000 100
16 Schnieider & Associates 2,158,875 100 1,615,841 100
17 BB&K 2,090,065 100 1,859,089 100
18 Manning Selvage & Lee 50,173,300 4 37,767,000 N/A
19 Blanc & Otus* 8,091,587 22 6,428,376 N/A
20 The Horn Group 4,373,000 23 3,658,000 15
21 Fleishman Hillard 136,272,000 0.49 115,193,000 0.24
22 Morgan Walke Assoc. 23,143,604 3 19,606,544 N/A
23 KVO 8,800,000 6 8,300,000 N/A
24 Technology Solutions** 15,907,100 2 12,964,900 2
25 KCSA 9,290,000 4 N/A N/A
* Based on figures supplied to the Council of Public Relations Firms
** Also included in Weber WW figures.