WASHINGTON: Two midsize DC public affairs firms have come forward
with news of their performance during the second half of 2001. Taken
together, they paint a portrait of a sector reacting to a changed
environment in very different ways.
The Hawthorn Group, a 10-year-old, $9 million firm, was forced to
revisit its business plan in the face of decreasing profits. Sixteen of
the agency's 65 positions were eliminated, including the two that made
up its New York office. The agency is left with its Virginia
headquarters and an Atlanta office.
"On balance, we had a good year," said SVP for communications Peter
"We had 18% fee growth over 2000. But during the fourth quarter, we
experienced many of the same problems other firms experienced. Prudent
planning dictated that we adjust our business plans accordingly."
Though the firm has not seen clients leave outright, it is believed to
be, like many agencies, a victim of decreased spending following
September 11. With Congress wrapped up in antiterrorism efforts and
foreign policy, many of the battles that yield corporate public affairs
spending have been tabled.
In contrast, Qorvis Communications, an 18-month-old, $10 million
private firm, was so proud of its performance in the second half of last
year that it took the unusual move of publicly announcing its results.
Qorvis saw second-half growth increase 74% from the same period last
year. Its net operating profit margin for that period was a healthy
Ironically, some of Qorvis' success can be attributed to September
Qorvis signed the royal family of Saudi Arabia, a major diplomatic
factor in the war on terror. The firm also staged a 10-city satellite
meeting for the UN and Ted Turner's Better World Campaign one month
after the attacks.