REGIONAL FOCUS: NEW JERSEY - How does the Garden State grow? EricArnold discovers local PR agencies rule in a market of majorcorporations

In Woody Allen's 1985 film The Purple Rose of Cairo, a man walks out of a New Jersey theater screen and into the audience - from celluloid to flesh and blood. Michael Tucker, playing a Hollywood agent, offers a simple explanation: "Anything can happen in New Jersey."

In Woody Allen's 1985 film The Purple Rose of Cairo, a man walks out of a New Jersey theater screen and into the audience - from celluloid to flesh and blood. Michael Tucker, playing a Hollywood agent, offers a simple explanation: "Anything can happen in New Jersey."

That may be true, especially when considering the Garden State's PR industry.

Not only have most New Jersey firms weathered the economic storm, but they're surviving in a market whose population is huddled around two major cities that aren't even within the state's borders, not to mention the fact that New Jersey doesn't have a single major media hub through which messages can be disseminated.

It's a confusing market, one that few multinational PR firms have figured out how to navigate. "This is a state of hard-to-reach audiences, says Jim McQueeny, chairman of Newark-based Winning Strategies. "Ben Franklin said New Jersey is a keg tapped at both ends. And here we are in the media era, where indeed, the market is tapped at both media ends, since New Jersey has no broadcast TV station."

What it does have, however, is an extremely diverse economy, with more than 20 Fortune 500 companies - from finance to pharmaceuticals to technology - providing not only a strong economic backbone, but a steady flow of work for local PR firms.

Small firms have biggest presence

Mike Cherenson, VP of the The Cherenson Group and president of the New Jersey PRSA, believes that because of the state's diverse economy, "the PR industry is also very diverse. We're home to many smaller firms, which are more nimble, and can adapt to a changing landscape."

Most of the state's more prominent local firms are feeding off a steady stream of project work from their corporate neighbors, and growing to the point that they can go after and retain a flow of stable work both within and beyond the borders of New Jersey. And all the while, these firms are providing more accessibility and bang for the buck than their New York and Philadelphia multinational competitors, who have yet to cross the Hudson and Delaware Rivers. The big boys tend to stay off this playground.

There are two reasons, in fact, why large PR firms avoid New Jersey: Firstly, it's right across the river, so some work already comes their way. Secondly, the state is a notoriously difficult one in which to communicate, with smaller, local accounts having the potential to become New York-size headaches.

Availability, accessibility, and finely-tuned expertise are what local agencies pride themselves on. "The big firms provide better global work, but for general PR, local branding, and promotions, they stick with us, since we give a lot of special attention, says Tom Coyne, founder of Fairfield-based Coyne PR.

"We're able to compete because what we do here in New Jersey is infinitely harder, and we're better at doing more with less, says McQueeny. "I get called by major national corporations to explain why New Jersey is so hard to communicate in, and I say that you have to be unique here. The first bit of advice we give them is that money doesn't buy your way to success here."

But, McQueeny contends, those who figure it out do well. "Word of mouth in New Jersey is as good as a network endorsement, he says. "It's harder to get and slower to build, but longer to last. If you know the hand signals, you're going to do well."

So does that mean that New Jersey is PR's next big growth market? Most of the heads of smaller firms seem to think so, but Michael Kempner, president and CEO of The MWW Group, the largest (and only multinational) firm in the state, remains unconvinced. "It's still a place that has a lot of high-quality small firms that have yet to significantly break out nationally, he says. He does concede, however, that many of New Jersey's firms, because of their proximity to several major corporations, get to work with some high-profile brands.

"We are not top of mind to companies here, agrees McQueeny, "but on the other hand, even the droppings off the table have us doing very well."

The companies providing those scraps range from pharmaceutical powerhouses Pharmacia, Merck, Schering-Plough, Johnson & Johnson, and American Home Products, to tech be-hemoths Avaya, AT&T, Lucent Technologies and Cendant, and financial giants Prudential and Dow Jones.

"You don't always have to go to New York to get the best PR talent," says Jeff Winton, VP of global PR for Pharmacia, which works with agencies all over the world, including some New Jersey firms. "I'm disappointed and surprised that there aren't major PR agencies setting up shop here.

Granted, we're an hour away, but agencies like MCS (which grew nearly 40% last year, pulling in $5 million worth of work) are realizing that it makes a lot of sense to be here. They're five minutes away, and this is a time-sensitive business. Agencies that are here are going to prosper along with the companies."

Success beyond state lines?

But that isn't the formula for a growth market, says Kempner, whose firm draws only 20% of its revenues from within the state. "I think New Jersey firms tend to think that they're New Jersey firms, and not project themselves as national firms. You must act big to be big. I think there's a mindset that holds back many of these firms."

Some of the big corporations may even contribute to the problem. Lucent has rarely called in outside PR help, even during the company's prosperous times. "PR has always been a core strength of ours from the beginning, says VP of PR Mary Lou Ambrus. "The fact that we have a very talented in-house team has been an advantage."

Ambrus doesn't rule out the possibility of Lucent hiring outside PR counsel, but she claims the company would not give any special consideration to its neighbors.

"The jury's still out on whether you'll see another large firm emerge from the current pack, says Kempner. "It's an extraordinary state, but not necessarily for the other firms that reside here. I don't know if you'll see another breakout firm."

While some local agencies boast out-of-state accounts - Anne Klein & Associates has clients as far away as Ohio; Rosica Mulhern represents Keebler in Chicago and an aviation company in Oregon; and Winning Strategies has had accounts in Bangladesh - most of these growing firms tend to stick close to their home base.

Coyne PR, which doubled its revenue to $1.3 million in 2001, is poised for 100% growth again in 2002. During this time, the firm has worked with such clients as Campbell's Soup, Merck Medco, Cendant, and Nabisco. And although the firm has clients as far away as California, Coyne says he likes to stay close to home. "We prefer to work inside New Jersey, he says, because "it makes us a better firm to work with. We keep really close contact with our clients - it won't cost us a lot of money to go to a meeting."

This is something that also keeps fees among New Jersey firms competitively low. "You're not paying for the office view, says Coyne. "$100,000 to New Jersey firms is important. We don't turn our noses up at budgets like New York firms do."

Nor do they turn their noses up at the smaller clients. Paramus-based Rosica Mulhern snubs pharmaceutical work in favor of professional service firms, while Anne Klein works mainly with hospitals and, most recently, a law firm.

"There's a bargain to be had here, says Chris Rosica, partner at Rosica Mulhern. Regardless, the big firms probably wouldn't be welcomed into New Jersey by their fellow practitioners anyway. "I don't know why they're not here, and I hope they don't come, says PRSA chief Cherenson.

McQueeny offers what he calls the "Turnpike answer when it comes to whether or not he thinks large firms should be taking advantage of New Jersey PR work: "When you're on the Turnpike, and you see all those oil refineries, why would you want to see the rest of the state? he jokes.

"So my Turnpike answer is, don't come here! It's too saturated and cluttered!"

They may not believe him, but large firms seem to be taking his advice, leaving New Jersey firms to rise or fall of their own volition. "You can't just come here and say, 'I'm New Jersey,' says Kempner. "Either you're of it, or you're not."

A HOTBED FOR PHARMACEUTICALS

"In order to be a leading pharmaceutical company, our management felt we needed to be in New Jersey, says Jeff Winton, VP of global PR at Peapack-based Pharmacia. The company works with a number of major PR firms, such as Weber Shandwick Worldwide, MS&L, Edelman, and near-by Bedminster-based MCS. But the heart of its global PR operation is at its corporate headquarters.

Pharmacia, in its current form, moved to New Jersey from the UK after it had merged with Upjohn a few years back. Previously, the Upjohn Company was based in Kalamazoo, MI, and the former Pharmacia Corporation was Swedish-based. The company later merged with the Monsanto Company (Searle).

"A number of the functional groups were reorganized and put together again, and PR was one of those, says Winton. "The global PR group is based here, and we have responsibility for all product PR including pharmaceuticals, consumer healthcare, animal health, and diagnostics." Notable brands include Celebrex, Rogaine, Detrol, Nicotrol, and a variety of others.

With a new company and global responsibility, Winton believed that the company needed to have a different outlook on how PR is practiced. "The end user is the consumer, he says, "and how you talk to a consumer about a product for arthritis is not necessarily unlike how you talk to someone buying a new car, house, or shoe. We need to speak the consumer language."

Therefore, he assembled people with backgrounds ranging from the traditional pharmaceutical work to entertainment to sporting goods to packaged goods, including some with agency and association experience.

The idea was to be able to communicate with doctors and patients alike, and reach the widest possible audience. "We do advocacy work, whether it's with patient- or physician-focused groups, Winton says. "It gives us credibility, and, working in tandem with them, we can reach a greater number of people."

Winton's staff now numbers 33, plus local practitioners at various affiliates around the world (Pharmacia calls them "market companies"). "We're treading new territory, he says. "A lot of pharmaceutical companies are worried about getting the message through to the healthcare professional. But that's the point of entry, not where it stops."

NEW JERSEY PR AGENCIES

Rank Firm Name/Location                           Revenue  Growth  Staff
                                                (dollars)
                                         2001        2000     (%)
1    The MWW Group                  8,003,231   9,001,586     -11     75
     East Rutherford
2    MCS                            5,291,049   3,818,778      39     30
     Bedminster
3    Winning Strategies             3,942,374   3,398,773      16     15
     Newark
4    Communications Strategies      1,749,981   3,570,380     -51     10
     Chatham
5    Rosica Mulhern - Strategic PR  1,285,570   1,406,600      -9     15
     Paramus
6    Spring O'Brien & Co.           1,190,133   1,081,300      10      1
     Morristown
7    Berry Associates PR              686,285     752,316      -9      8
     Cedar Knolls

Source: Council of PR Firms Auditing: No audit was required for
inclusion in the rankings. The CEO/CFO/principal was required to sign a
statement verifying the accuracy of the data and agreeing to possible
participation in a random audit Disclaimer: While every effort has been
made to ensure the accuracy of these figures, PRWeek cannot accept
liability for, nor make financial guarantees based upon the information
in this chart.

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