AGENCY RANKINGS 2002: Smaller shops: some sweet successes - Call ita year for the little guy. We present a few big performances from theseunsung players

140 IMADA WONG GROUP - $2,760,000 + 82%

140 IMADA WONG GROUP - $2,760,000 + 82%

In Asia, mothers don't want their sons to grow up to be PR chiefs.

According to Bill Imada, president and founder of Imada Wong Group in Los Angeles, Asians do not understand why Americans need to hire someone else to forge relationships.

Since 1990, Bill Imada has been helping companies override their handicap when it comes to communicating with Asian people in America. Surprisingly, while general-market agencies were feeling the sting of 2001, Imada Wong was signing contracts with clients such as Blue Cross and DaimlerChrysler.

The agency also experienced organic growth among its existing clients, many of which have been with the firm since its inception. "We are finding a lot of clients are interested in community relations, minority and women vendor programs, creative partnerships and social marketing," says Wong.

He credits the 2000 census for solidifying the arguments he's been making for the last decade. "In a down economy, clients are looking for incremental sales wherever they can get them,

says Wong. "Marketing to Asians is just a good business case.

Wong also cites a growing number of marketing executives from the African-American, Asian and Hispanic communities, and says these new leaders are beginning to demand that agencies represent the cultural intelligence among their ranks. If they don't find it in the traditional shops, they look for it elsewhere.

"If you look at the decision makers in PR now and the next generation of people making decisions, they are going to be looking for tangible evidence that agencies understand multicultural marketing,

says Wong.

173 SACUNAS & SALINE - $2,013,877 + 76%

Living slightly off the beaten path has helped 12-year-old Sacunas & Saline continue to grow in 2001, increasing its income 76% to just over $2 million.

Located in Harrisburg, PA, S&S sits in an area that traditionally has been one of the country's most industrially productive, remaining relatively insulated from the economic hoopla of the recent past. "We were so busy last year, I didn't even know the rest of the industry was having as difficult a time as they were,

says president and CEO Nancy Sacunas.

She makes sure her agency doesn't become dependent on any one industry, serving healthcare, manufacturing and transportation clients while dedicating about 15% of her business to working with government agencies. "Ever since I started the business, I was careful to make sure we had a mixture of clients so that in the event of an economic downturn, we would be covered,

Sacunas says. She describes her shop as the "largest PR firm between Philly and Pittsburgh,

serving major-market clients at regional prices.

Growth in 2001 came more from increased work for existing clients than from attracting new ones. Wins in 2001 included the Pennsylvania Turnpike Commission and the American Veal Association. In June, S&S acquired upstart new media firm Apogee 3, whose staff accounted for two of the half-dozen or so new employees added in 2001.

Sacunas expects modest growth in 2002. "We will continue to have difficulty attracting high-level talent to our smaller market,

she predicts.

75 DOME COMMUNICATIONS - $5,200,000 + 63%

When the economy began turning south in the latter part of 2000, Dome Communications founder Douglas Dome did what business textbooks say CEOs should do in such times - he invested in new business development.

"Others viewed the downturn as a deterrent,

Dome says. "We saw it as an opportunity.

Dome describes his Chicago agency as a creative PR boutique and prefers project work to retainers. "We like that accountability,

declares Dome, who attributes his firm's success not only to its new business development program but to its creativity, culture and ability to compete economically against the big boys.

Staff doubled in 2001 to 40, about half of whom are full-time freelancers and interns, and employees were lured from big agencies such as Golin/Harris, BSMG, Edelman and Manning Selvage & Lee. The agency divides its work into seven practice areas, with particular strength in promoting consumer food products.

Clients added to the roster in 2001 included Kraft Foods, Sears and Service Master. Dome lost some work last year from Dean Foods and Sara Lee Bakeries due to mergers and relocations, and the College Illinois tuition program brought its PR activities in-house.

Expansion plans for 2002 focus on multicultural specialty practices, particularly the development of Concepto PR, a Hispanic agency founded this spring. Capitalizing particularly on Concepto's niche, the CEO says he expects the parent company to grow 50% this year.

160 LANE MARKETING - $2,321,433 + 62%

When you think of the Northwest, you don't think marketing Mecca - unless its saving the spotted owl or, of course, Nike. You might say Oregon is on the edge of the bubble, so when it burst last year, agencies there were in dire straits.

It is, therefore, all the more remarkable that Portland's Lane Marketing Communications was able to show more than 60% growth last year. "In about July 2001, we started to see some of our current clients retrench,

says Wendy Lane, who founded her agency in 1990 as a media relations magnate.

"We mounted a major marketing effort, and within eight weeks we were able to bring in six clients.

Lane didn't use expensive, gimmicky prospecting kits. She did it the old-fashioned way - she picked up the phone to drum up referrals. She also knew she had to get outside the Oregon market. "We have 8% unemployment and no Fortune 500 companies (except Nike),

says Lane.

She succeeded in signing CashTech of Los Angeles and West Coast commercial litigation firm Bullivant Houser Bailey. Houston-based tech firm Encompass Systems also signed on last year to ride the last breath of venture capitalism but resigned recently due to financial difficulties. A smattering of Oregon-based entities - including Nike, Boyd's Coffee and the state wine board - rounded out her growth last year.

With 23 staffers, she is maintaining her development drive. "To grow at all this year we have to stay out there marketing and expand out of Oregon,

says Lane.

130 VOCE COMMUNICATIONS - $2,861,736 + 55%

Three years ago, Richard Cline and some fellow Compaq account managers went to their boss at Miller/Shandwick, chairman Fred Hoar, to confess that they'd been bitten by the entrepreneurial bug. With his blessing, they left the security of a large agency to start their own - a tech boutique called Voce Communications.

Avoiding dot-coms, the Palo Alto, CA, shop started with the decidedly unsexy niche of electronic storage. "We worked with financial analysts for months and determined that infrastructure was the way to go,

says Cline. Since Sept. 11, storage has been the hottest sector in the market.

Voce's big wins were Fujitsu, Ariba and Key3 Media, the trade show behemoth responsible for Comdex. The firm also received increased budgets from Network Appliance and Extreme Networks. But, as the tech sector retrenched, Voce further stabilized its position by accepting short-term projects nobody else would touch.

"We asked clients, 'What do you need now?' and said 'Let us be the air support for your sales team,'

recalls Cline. He says embattled corporate communications staff needed real-time help with media relations and trade show management to help them tread water. They also felt burned by agencies touting strategy and charging high retainers but delivering anemic results.

Cline admits significant cost-cutting made the difference in the numbers his firm posted. "We asked everyone to take a 15% reduction in salary after the partners took a 30% cut,

says Cline, who adds that salaries are back up.

188 SIGNOVA - $1,775,676 + 53%

Healthcare provided a safe and stable port in the economic storm last year for many PR firms, making Philadelphia's Signova well positioned to grow as other shops struggled.

The four-year-old agency, a subsidiary of healthcare marketing firm Vox Medica, gained ground in 2001 by facilitating collaborative relationships between its pharmaceutical clients and the managed-care organizations they serve, says president and partner Eve Dryer, a veteran of Manning Selvage & Lee. "I think we just became more efficient and smarter in our use of time this year,

Dryer said.

This time last year, flagship client MedUnite, a healthcare IT firm founded by leading health insurers, accounted for a disproportionate share of Signova's business, Dryer says. The agency's work became more balanced as accounts grew for clients such as Forrest Laboratories and Eli Lilly.

Signova brought on new client Par Pharmaceuticals in late 2001, and more recently the agency has done project work for the Arthritis Foundation and expanded its relationship with AstraZeneca. The 12-person shop also is involved in ongoing pro bono work for the National Alliance of Breast Cancer Organizations.

Signova was not immune to the recession, however. With national PR agencies hungrier than ever, Dryer says her healthcare firm competed against them for small contracts that the big boys normally wouldn't bother pitching.

She also delayed some plans for 2001 until this year, including the hiring of new pharmaceutical practice SVP Linda Dyson.

234 BITE PR - $1,033,980 + 53%

Born in the UK, Bite PR crossed the pond in 1999 and headed for San Francisco with the intention of capitalizing on the dot-com craze. There was still money to be made, and while double-digit growth is easier for small shops to prove, Bite's tenacious energy as the new kid on the block gave it an advantage over those exhausted by the go-go pace of the decade.

Bigger does not necessarily mean more successful. According to the rankings, relatively few of the PR firms with less than $1 million in revenues reported a loss over the previous year - nine out of 43, to be exact. The results for the $2 million-$3 million club were similar - with seven firms out of 44 showing a loss.

"We are an ambitious company, and we weren't prepared to sit on our laurels,

says Judy Wilkes, general manager of Bite San Francisco, referring to a sharp rise in reputation since its founding in 1995. "San Francisco was the obvious choice because things were so buoyant."

The year 2000 was the last blush of the tech craze before last year's collapse, and there was more work than agencies to execute it. Wilkes attributes Bite's success last year to the beachhead the agency established in its first 18 months with account wins that carried through 2001. "People were just trying to plow through the amount of work on their plates, and many had become complacent,

says Wilkes. By late 2000, more established Bay Area firms began to feel the first breeze of the bubble's burst.

Wilkes admits that most of the companies Bite represented last year no longer exist. As assignments drew to a close or as clients moved off the roster due to acquisition or business failure, the agency was unafraid to accept short-term projects to mitigate its losses. She believes her peers were either too shell-shocked or too full of hubris to act with such nimbleness at the time.

The largest group of agencies on the main US rankings table is the $1 million-$2 million group - to which 60 firms belong. Twenty-four of those agencies reported that revenues were down from 2001. But that's still better, on average, than the $100+ million club, where more than half were down from the previous year.

True, it's impossible to draw meaningful conclusions from this data alone, but the PR industry has been built on a solid foundation of entrepreneurship.

If all politics are local, it's fair to say that all PR is local as well.

While the entire industry faced adversity in 2001, each small firm has its own story to tell, its own successes and failures that say a lot about the state of the industry at its most personal and responsive level.

For example, MSR Communications, a technology boutique in San Francisco, has a staff of six senior practitioners. Located in the heart of the Bay Area - and the center of the tech turmoil - MSR managed to boost its revenues by 14% last year, to $876,968.

Mary Shank Rockman, principal and founder of MSR, says one of the most important factors contributing to her shop's success is the fact that she's deeply involved with every account.

"I have weekly meetings with every client,

she says. "When I founded the firm, that was my number one priority. I just know that clients are expecting and demanding these days that senior management be a part of their team.

MSR's client list includes MetaTV, Evolve Software, Face Time Communications and Soliloquy Learning.

MetaTV in particular found it needed that deep level of involvement when its CEO became embroiled in a sex scandal last summer, arrested for allegedly luring an undercover police officer posing as a 14-year-old girl to Golden Gate Park for sex. Rockman's handling of the crisis led to a front-page story for MetaTV in the business section of the San Francisco Chronicle, focusing on how the company had ably responded to the problem.

Rockman says she is coming up against larger agencies in business pitches these days, firms that a year or so ago would not have even looked at small accounts. Other small agencies - including Everett Clay Associates in Miami - are also finding that they are pitching against the local offices of large firms.

"The story here is that many of the large firms have come and gone," says Dana Clay, president of Everett Clay. Clay's father, formerly a sports editor for the Miami Herald, founded the agency, which has been in business for 62 years. At one time, Everett Clay focused about 50% of its time on healthcare, and it still does a lot of work in that area.

The agency's revenues grew 22% in 2001, from $732,192 to $894,100. Dana Clay says the firm was founded on an unusual principal. "We only take one type of each business - one law firm, one hotel, etc.,

she explains, "because the pool of writers is so limited in certain areas."

The agency's logic is that if you represent five real estate companies and there is only one real estate reporter at the local paper, you will not be able to pitch all your clients equally. "Won't you be more likely to pitch the client who pays the most?

Clay asks.

Her clients include Florida's Home Depot stores and litigation support.

Clay too has seen big agencies go after smaller accounts recently. "Now you see (big agencies) willing to go for a single hospital as an account.

In the future, she would like to get the agency more involved in community issues and do more pro bono work.

Gail Cooksey, president of Cooksey Communications in Irving, TX, saw revenues reach a million in 2001 for the first time in her agency's eight-year history - up 27% from 2000.

She credits some of the success with avoiding technology clients altogether and "sticking to things people will always need,

such as restaurants, professional services and retail.

One of Cooksey's most successful strategies has been finding ways to bring clients together on projects of mutual benefit. For example, one of her clients is Grapevine Mills, a shopping center. When client Scarborough Fair, a renaissance festival, was about to open its big event, Cooksey arranged for a mini-Scarborough Fair show to come to Grapevine Mills, providing added publicity to both clients.

Cooksey says she's seen an enormous difference in how much clients are willing to spend these days. "There is a barrier of people willing to buy at mid-range, but not willing to go to $20,000 a month or something,

she says. "You start talking about $10,000 and it's just too much.

She sees an opportunity in expanding offerings to professional services firms, particularly in light of Arthur Andersen's recent troubles.

Anne Klein & Associates is celebrating its 20th anniversary this year - as well as the fact that it held its own in 2001 with revenues of $895,800, a 4% increase. Located in Marlton, NJ, the agency has been retained for the entire term of its existence by the National Association of Investors Corporation and by Main Line Health for about 16 years.

With a client list that includes healthcare, chemical, real estate and professional services companies, president Anne Klein says there are certain things small firms must do to survive, including diversifying their roster.

"Don't jump on the fads unless you really have your bases covered with the traditional things,

she says. "You also have to have some accounts that are insulated from the vagaries of the economy."

Klein would eventually like to expand beyond her current staff of nine, but she does not want the agency to grow too large. Like many other top executives in boutique firms, she believes her personal involvement in her client's accounts is instrumental to her success. Small agencies will have less presence in terms of name recognition, but poor quality of work will haunt a business, Klein maintains.

"If you are a smaller firm and you can't deliver, that reputation follows you around,

she says. "I always like to say that when you work with us, you don't get any surprises."

251 XENOPHON STRATEGIES - $852,281 + 2,077%

When he founded Xenophon Strategies in October 2000, former Air Transport Association (ATA) communications VP David Fuscus could not have predicted just how needed his services would be only a year later.

Specializing in airline and transportation crises, the DC agency's founding clients included the ATA, Alaska Airlines, Midwest Express and Airbus Industries. "We got a tremendous amount of work out of our existing clients

after Sept. 11, Fuscus says. Crisis activities included counseling Airbus after one of its jets crashed into a Queens neighborhood in November.

The firm counts the Salvation Army among its clients, but none of its 2001 work for the organization related to the terror attacks, Fuscus says.

Xenophon lists among its capabilities the development of somber, "dark websites

devoid of product promotion to use as a backup in case a company becomes involved in a major disaster.

Xenophon had less than one fiscal quarter under its belt when it reported $39,150 in 2000 revenue. Last year, it grew from a two-person operation to an agency with nine employees and $852,281 in revenue. By April 2002, it had opened a satellite office in the San Francisco area. Those who have joined include Gabby Richards, previously a national editor for the Washington Post, and former GCI Group SVP Jay Silverberg, who heads up the California outpost.

"When you do crisis work for the airline industry, it allows you to do crisis work for anybody else,

says Fuscus, adding that he hopes the agency will grow an additional 40% in 2002.

271 RUANE COMMUNICATIONS - $512,550 + 156%

Michael Jordan is not a bad name to have on your client roster. It definitely opens doors, and Ruane Communications parlayed that curiosity into triple-digit growth last year.

Founded in Chicago in 1992, Ruane moved to Atlanta in 1999 to capitalize on the consistent 20% growth in the business market and the respect the city seemed to have for boutique agencies. Ruane used its work with Air Jordan to win celebrity endorsement campaigns for Parkinson's with Muhammad Ali and for childhood ear aches with Florence Henderson.

Thus, the boutique established itself in Atlanta as a healthcare marketer at a time when the sector was retrenching. The balance of the healthcare business there had dried up by the end of the decade with the acquisition of HBOC, WebMD and others. As a boutique, Ruane was positioned to offer high touch without high overhead. "We will not grow as quickly as other agencies,

says founder John Ruane. "But at the same time, our clients feel we are an extension of their staff."

Ruane says he has been steadily building business organically, and a single assignment with Boehringer Ingleheim doubled his agency's revenues in 2001. "We've been working for them for four years, but they got a co-marketing agreement with Pfizer for a new respirator drug, and we were the beneficiaries,

says Ruane. He says the contract is open-ended, and recognizes the exposure that such a large client represents.

Ruane recently hired 24-year industry veteran Kevin Feeney as senior vice president to aid business development.

62 GREENOUGH COMMUNICATIONS - $6,114,000 + 115%

Greenough Communication's spot on the list of top-growth PR agencies might seem unlikely for two reasons: First, the other three shops reporting growth of 100% or more last year made less than a quarter-million dollars each in 2000, while Greenough brought in 10 times that much. Secondly, it's a tech-only firm.

Founded in September 1999 by former Weber Group EVP Phil Greenough, the Boston agency topped $6 million in revenue for 2001 and went from 20 to 35 employees. Greenough grew relationships with existing clients such as Citrix Systems and Qwest Cyber Solutions while picking up Sonus Networks, Ascential Software and eXcelon. The firm opened a Boulder, CO office in January 2001 to serve Qwest and Rational Software.

In last year's tech-unfriendly environment, Greenough's leaders debated expanding the firm's focus but decided to stick with a diverse technology clientele. "We're not consumer. We're not public affairs. We're tech,

says operations and technology VP Matt Hegarty, who credits the firm's success to customer service and accountability. The relatively young agency already has conducted two broad client surveys and uses media measurement tools religiously.

Greenough's prudence undoubtedly helped as well. The firm was careful not to overextend itself during the heady days of 2000 and didn't, therefore, find itself with a bloated payroll or staggering overhead when the recession hit. Although management had eyed San Francisco for some time, they waited until they could get what Hegarty calls "a sweetheart of a deal on real estate

before opening an office there earlier this year.

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