When Ohio PR executives were toasting the start of 2002, they
probably were also muttering something else under their collective
breath: Thank God 2001 is finally over.
Battered by the tech wreck, by problems in the industrial base of the
northeastern part of the state, and by general client reluctance to do
anything after September 11, most Ohio PR firms couldn't wait for 2001
"2001 had a double cliff to it," explains Scott Chaikin, CEO with Dix &
Eaton in Cleveland. "We saw a drop early in the year, and then September
11 sucked whatever optimism there was in the system right out."
The resulting bottom-line carnage spared few firms. Even mighty
Fleishman-Hillard, which charged into Cleveland in 1999 by buying a
local shop, couldn't dodge the bad-business bullet. At the start of
2001, Fleishman was predicting major growth for the year, saying its
Cleveland revenues would leap from $4.2 million to $6
million. The reality was that revenues fell to $3.4 million, a
19% plunge. "No question we were overly optimistic about this year,"
says Jay Lawrence, a Fleishman SVP who was shipped in from Cleveland in
October to help revive growth there.
In downstate Cincinnati, formerly fast-growing Northlich also hit a
The firm had seen PR fees grow 31% in 2000 to about $5.4 million.
It started 2001 projecting 15%-18% growth. Instead, revenues fell
15%-25% and staff shrunk by 13 people to 22, says EVP Richard Miller.
Northlich saw 20% of its business evaporate in just 10 weeks early in
2001 as the tech wreck hit full force.
Most other major Ohio shops, not as heavily involved in tech as
Fleishman and Northlich, saw smaller, single-digit losses for the year.
Those that eked out small gains or stayed even with 2000 are feeling
"I'm proud to be flat for the year, which is not something you would
normally say," says Kathy Obert, CEO with Cleveland-based Edward
With a year like that, it's no wonder Mark Nylander, EVP and GM with
Cleveland-based Liggett-Stashower Public Relations, says: "There seem to
be more firms struggling in this market than I can recall in recent
years. It will almost be a relief to turn the page for the year."
Better days ahead?
With that January 1 page now turned, Nylander and others are expressing
optimism that the worst has ended.
Already, those who work with consumer goods companies are seeing clients
who postponed new product introductions in late 2001 gearing up to bring
those products to market this year. Howard Landau, president of Wyse
Landau Public Relations in Cleveland, says he has three clients
preparing new product rollouts this year.
That list includes the school supplies division of Mead, an account his
firm recently won back after two years when the paper company used a
different agency. "Our consumer products clients seem to have more
optimism associated with them," says Landau. "Business-to-business is
Some Ohio companies in the b-to-b market are planning PR pushes this
year as well. Mettler-Toledo, whose four divisions deal in everything
from laboratory equipment to supermarket scales, expects to introduce
new scales and new software this year and sees PR as a major part of its
marketing mix, says Sheila St. Jean, marketing communications
When it comes to reaching the sophisticated business audience she wants,
"You get more from third-party endorsements in the media than you do
with ads," she says.
While Cincinnati-based Procter & Gamble is always quiet about its
marketing plans, some see its recent rollout of a new type of corn chip
- packaged in cans like its familiar Pringles potato chip - as a sign
P&G has finished its internal cost-cutting and is again ready to roll
out new products.
The food business has generally been one of the few safe havens in the
slowing economy. Some pundits note that Americans staying closer to home
after September 11 means more demand for at-home meals and eating at
local restaurants rather than far-off destinations.
Bob Evans Farms, an Ohio-based chain of folksy family restaurants, has
seen its business hold steady after September 11, helped by more people
driving rather than flying to destinations, says Mary Cusick, VP of
corporate communications. Cusick didn't cut her PR spending in 2001, and
she doesn't expect to this year either. "Our business is in decent
shape, so we're feeling pretty confident," she says.
Nonprofits could be a bright spot for PR this year as charities and
community groups strive to maintain a public profile in the wake of the
September 11 rush of donations to the Red Cross and other
Sara Neikirk, executive director of the Columbus-based Communities in
Schools, says her group plans to roll out a new logo and a newsletter
for corporate donors this year. "We're trying to make ourselves more
visible," she explains.
Neikirk's group provides social services to Columbus' 65,000 public
Making the best of a difficult situation
Another area where PR firms are seeing business grow is a direct result
of the slowing economy. Whether called "change management" or corporate
restructuring, PR firms are getting more business from clients hit by
"This is a hotbed of activity for us right now," says Obert of Edward
Howard. The firm has had a turn-around and reorganization practice for
years, usually handling one to three clients a year in that area. As
2001 ended, however, it had eight clients dealing with bankruptcy or
other business issues. Obert expected that practice area to account for
15% of her 2001 revenues, roughly three times normal levels.
Chan Cochran, head of Columbus-based Cochran Public Relations, expected
to end 2001 with single-digit revenue growth, and was looking ahead to
double-digit growth this year, thanks to his work in corporate change
management and public affairs.
The state capital, Columbus, has a base of public affairs work that
makes it the strongest market for PR of Ohio's three major metro areas -
Cleveland, Columbus and Cincinnati.
Lord, Sullivan & Yoder Public Relations, another Columbus firm, saw
revenues down in single digits last year. He expects 10% growth this
year as clients ask for more internal communications and crisis
Dix & Eaton, which also expects 2001 revenues to be down by
single-digit percentages, would have done worse if not for a steady
stream of IR business related to Reg FD, says Chaikin.
While firms can find bright spots for this year, no one is saying the
gold rush days of 2000 are coming back anytime soon. The business
climate has caused clients, and PR firms, to change how they do
business. "Nobody wants to spend a nickel they don't have to," says
That means clients want better measurement of results and a definable
return on their spending. That's been good news for firms like RMD
Public Relations in Columbus, which charges clients only after they
receive placement in various media. Vince McMorrow, director with RMD,
expects revenues to grow 15% this year after a 5% gain last year, thanks
to the firm's performance-based fee structure. "Performance-based is
something clients can take back to their superiors and say 'here's what
we got for our money,'" he maintains.
Even firms that don't follow the pay-for-play route agree clients are
spending less but expecting more. Project work, not long-term
commitments, is the norm now. Says Landau, "My clients, particularly on
the b-to-b side, don't like the R word anymore. The R word is
Neil Mortine, LSY's president, notes that 2001 was his firm's best
new-business year ever with 25 new accounts, yet overall revenues still
"We had a great new business year, but the wins are smaller, in the
$5,000-$10,000 a month range versus $20,000-$30,000," he says. With revenues down, Mortine is examining all costs,
from seminars to subscriptions, to try and lower spending.
Dan Pinger of Dan Pinger Public Relations in Cincinnati, says his
revenues were flat last year, but his net was higher because of expense
Pinger let his staff drop through attrition from 60 to 40 as 2001 turned
from a good year into a tough one. "July 2001 was better than July 2000,
August was down a little, and September just dropped," he says, with
business off 28% compared to September 2000. That continued with
business off 28% in October and 21% in November compared to the same
months in 2000. December saw a 10% increase, however, a hopeful sign to
Landau says he ended 2001 with many clients unsure of their 2002
budgets, a fact that's making it difficult for him to predict how this
year will go.
Other clouds also are on the horizon. In industrial Cleveland, the area
is still reeling from the after-effects of the bankruptcy of LTV Steel
last year, says Landau. "LTV's demise sends a signal to the community.
The feeling is downbeat right now. You hate to see those smokestacks
idle," he says.
Ohio PR shops don't want to be idle this year. If business keeps
improving, as many hope, they may pop champagne corks to celebrate 2002
sooner than New Year's Eve.
OHIO PR AGENCIES
Firm Name Revenue Increase Staff Location
Edward Howard & Co 6,413,146 10 52 Cleveland
Relations 6,188,875 37 39 Cincinnati/Columbus
Fleishman-Hillard 4,207,000 94 34 Cleveland
HSR Business to
Business 3,176,000 N/A N/A Cincinnati
Liggett-Stashower PR 1,922,365 32 17 Cleveland
Marcus Thomas PR 1,444,590 -12 10 Cleveland/Youngstown
Weisheimer & Assoc. 1,400,000 8 15 Westerville
Partners 1,272,004 9 14 Cleveland
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.