REGIONAL FOCUS: ATLANTA - Atlanta heat gives way to cold. For thefirst time in recent memory, marketers and economists in Atlanta areusing the 'R' word - and meaning it

For more than 20 years, Atlanta has been one of the most bankable

growth markets in the nation. During the '80s and '90s, the city's

upsurge was fueled by a dominating airport and a core of homegrown blue

chips like BellSouth, Coca-Cola, Delta Air Lines, and Georgia-Pacific.

Not to mention a cache of communications, technology and retail

innovators like CNN, First Data Corporation, Scientific-Atlanta, and

Home Depot. These companies anchored the region, substantiating it as a

hotbed of commerce, and stimulating the southward migration of many

Fortune 500 headquarters.

Then on a balmy September morn in 1990, world headlines screamed, "It's

Atlanta!" While every other metropolitan area was in the grips of the

Gulf War recession, Atlanta was awarded the 1996 Olympics, fueling a

boom through the first half of the decade. It was the ultimate PR coup

for a geographic desperate to improve its international business


With the technology boom also fomenting during this period, Atlanta was

preserved from a post-Olympic recession, and saw double-digit growth

throughout the decade. Certainly a second tier to Silicon Valley, but

still home to new-economy darlings iXL, WebMD, and a seraphim of others.

B-to-b and tech were the plays of the day and, riding the coattails of

both Alexander and Crescent Communications, almost every PR shop in town

was in an acquisition frenzy, and launching practice groups to address

the "new new thing."

Even though the big venture capital bucks did not cross the Mississippi

until late 1999, the Atlanta business community was fatter than a summer

tomato, and it was throwing green at PR. Of course, this same period

also witnessed the improvement of industry's lot in the marketing mix.

Finally sitting at the boardroom table and converting itself from a

source of ink to the brains of brand strategy, Atlanta PR grew an

average of 14% every year. In 2000, local firms grew a stratospheric


What a difference a year makes.

Perhaps the messy January headlines of the defection at Cohn & Wolfe

were prescient. The city's oldest PR firm was in deep trouble. Its GM

and top lieutenants were dismissed on the eve of their defection to

start up The Titan Network. More bad headlines followed. The VC vein had

dried up. iXL and WebMD imploded. BellSouth, Coke, Delta, and CNN

announced layoffs, and the seraphim of technology companies got their

wings clipped.

No one is quite sure what's going on at the world's most ubiquitous


Last year, Coke's new CEO and chairman Doug Daft announced a "new era of

openness," and positioned Charlie Holleran as head of


In February of this year, the company installed Dirk Vande Beek, former

press secretary to Vice President Dick Cheney and global PR director for

Haliburton, in the top PR spot. By fall, they were both gone. Vande

Beek's departure happened almost under the radar. Daft's former

executive assistant Clyde Tuggle was recently given the mantle. The

final reshuffle of the company's communications function, now two years

in the making, is said to be forthcoming. The question remains as to how

this will affect Coke's agency relationships.

September 11

World headlines on a more recent September morn screamed a more ominous

declaration. Unfortunately, Atlanta was not to be spared the travails of

America's new war.

Delta Air Lines is the city's largest single employer. Despite the

federal government bailout, the company recently announced a staggering

layoff of 13,000 workers, and plans to cut $1.7 billion from its

2002 budget.

Spokesperson Cindy Kurchesky says layoffs will affect the internal

communications group, adding, "We are looking very seriously at all

costs, including spending for PR." Hartsfield International, the

nation's busiest airport, is also home to UPS. The company, which

originally projected to carry 325 million packages this holiday season,

announced a 20% drop in revenues since September 11.

PR is flat in Atlanta for the first time in a decade. "Flat" is the spin

on the street, but when the final tally is released in the first

quarter, it may be written in red ink.

Belt-tightening has been most dramatically played out at the big


Ketchum and GCI Group have made their own headlines lately with layoff

announcements, but in truth, no one has been spared the ersatz

"right-sizing." The only heat being felt in the Atlanta PR market of

late is GM feet held to the fiscal fire. Executives are caught in a

squeeze play between the pressure to make a profit and proving ROI to

clients. If there is a sure bet in PR right now, it's in research.

"We're being asked to get our labor costs in the right proportion to our

revenue," says Jan Lewin, managing director of Manning Selvage &


She says clients are being much more conservative about their approach

to PR. "It's taking longer to get decisions made on budgets." Lewin is

among the most often referenced by her peers as an agency chief who

seems to have made a lot of right moves in the turbulence of both the

2000 boom and 2001 bust. Last year, she engineered the acquisition of

local workplace communications dynamo Deeley Trimble, and this year

bolstered MS&L's overall IR strength by brokering the buyout of LA-based

Pondel Wilkinson.

Porter Novelli GM Katharine Day Bremer was forced to be aggressively

innovative as a manager this year. "Our leadership team took a pay cut

that represented one full-time job, which we saved here," she says.

Three others were laid off. "We found ways that we could do those jobs."

Porter Novelli was a latecomer to the Atlanta market, opening its office

in 1997, and struggling to gain a foothold until Bremer was assigned in

1999. Projected last year as "one to watch," Bremer and her team won

both the American Cancer Society and BellSouth accounts this year.

(GCI-Atlanta had been AOR to both.) Bremer deftly partnered with 360

Thinc to win the latter, but with GCI currently trying to buy 360, the

dynamics of this relationship are to be watched over the next year.

Odds makers on Peachtree will be surprised to learn that news of Hill &

Knowlton's imminent death has been exaggerated, at least for now. Like

C&W, H&K has a storied history in this town. Many of those who did not

cut their eye teeth at the former, did so at the latter. While C&W's

downfall was a rapid arterial bleed, H&K's troubles have been from

leadership turnover, causing a chronic staff and client bleed. Hope was

on the horizon when Alan Ulman took the helm in 1998 and wrested PR

heavyweight Deb Spicer from BellSouth. He got the numbers back in the

black, and convinced headquarters to approve the acquisition of hot tech

boutique Socket PR this year - just before the bubble burst.

Ulman and Spicer moved on to Ketchum and GCI Group, respectively, and

clients and staff seemed to evaporate. H&K has moved out of its prime

midtown offices to Socket's Duluth premises, far outside the city's

famous Perimeter. All appearances to the contrary, however, the agency

is still competitive and operating under the H&K mantle. Socket

cofounder Beverly McDonald has been named GM, and she just announced a

new $1 million account win (Lucent Technologies - see news

story). A breath of life.

Consolidation is the word being whispered lately. Unlike the large-scale

acquisitions of the past five years, the sensibility is that we may see

mergers between independents. While surveying the landscape, nearly

every shop had an opinion about what was up for sale. Few admitted to be

entertaining options, though almost all were named at one point or

another. Generally speaking, there is restlessness among the middle

ranks, and it bears watching over the next few years.

Conversely, boutiques seem to be secure. Dowling Langley is a solid

public affairs shop, and Matlock & Associates is corporate Atlanta's

go-to firm for diversity. Creative consumer shops like Cookerly,

Hayslett Sorrel, and Hope-Beckham seem to have immutable reputations for

their work, and occasionally compete against the big agencies. Cookerly,

in particular, scored a coup when AGL Resources was up for bid, beating

out a few in the top five.

Recession and resolve

Recession is now the reality in Atlanta, and there is a back-to-basics

approach in the practice of PR here, as elsewhere. It is not, however,

something the Atlanta PR community is ill-equipped to handle. To the

contrary, some very smart positioning and resource management was

engineered by the top networked agencies. Ketchum, Fleishman-Hillard,

GCI Group, and MS&L have each built a cache of subject matter experts in

their Atlanta offices, and bolstered capabilities across the market

spectrum. Largely because of the respective leadership of Jane Shivers,

Karen Kaplan, Ken Willis, and Jan Lewin, Atlanta is the network leader

on many marquis accounts.

It is the de facto gateway to Latin America, and firms here are

significantly more competitive than their mid-Atlantic rivals.

While many of the technology scions have been acquired away from this

market, the biotech industry is being incubated by a strong coalition

between state and private sectors. Governor Roy Barnes initiated the

Georgia Cancer Coalition, and seeks to make the state a center for

research and treatment. Many of the most celebrated technology

innovators escape on their golden parachutes with their reputations

intact, and are still in residence along the Perimeter. Although early

retired, most are expected to make some play in the next few years.

Atlanta PR received a boost, too, when the PRSA held its annual

conference in the city in October. The success of the event was a

testament to the society's Atlanta chapter, and to the resolve of the

local PR community.

"Most of us have been at this game in this market for a long time," says

Claudia Gaines, president of The Headline Group, which, along with

Duffey Communications, has become a major factor in Atlanta PR. "This

recession is no more a norm than the recent boom. If you play smart, you



Rank Firm Name Revenue (dollars) Increase Staff

2000 2000 (%)

1 Ketchum 20,583,000 31 140

2 Ogilvy PR Worldwide 11,580,500 45 60

3 GCI Group/APCO Associates 11,337,162 47 87

4 Duffey Communications 7,209,000 34 52

6 Cohn & Wolfe 6,465,000 35 37

7 Fleishman-Hillard 5,957,000 35 40

8 Manning Selvage & Lee 5,728,616 71 10

9 Porter Novelli 3,730,000 42 38

10 Hayslett Sorre 2,950,000 N/A 22

11 The Headline Group 2,724,217 17 30

12 Edelman 2,603,796 2 20

13 William Mills Agency 2,590,076 48 27

14 Deeley Trimble/Manning

Selvage & Lee 1,770,830 N/A 3

15 Golin/Harris 1,045,000 -27 6

16 Fletcher Martin Ewing PR 1,000,000 34 13

17 The Leatherbury Group 600,000 9 6

18 Text 100 54,690 N/A 3

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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