Sometimes even the oldest cliches carry a ring of truth. Just ask
Detroit PR people, who these days are reciting the old saying, "As goes
the auto industry, so goes Detroit."
Detroit's PR agencies are split between those that depend on auto
accounts, and those that have looked elsewhere for business to areas
like retailing, healthcare, and public affairs.
Those tied to the auto industry, whether working for automakers or the
myriad parts suppliers, have been intensely scrutinizing the health of
the "big three" manufacturers this year, and are now also wondering what
2002 will bring.
The year began with automakers such as General Motors and
Daimler-Chrysler cutting PR spending and staff as they braced for what
many were forecasting would be a dismal 2001. As it turned out, sales
fell from 2000, but not nearly as badly as pundits had been
By summer, Detroit was breathing a collective sigh of relief. The year
would be tough, but still might yield the kind of auto sales that would
rank it as the third best in the industry's history.
Auto industry responds to attacks
The terrorist attacks, of course, changed the business equation.
Automakers, fearful that sales would plunge as consumers pulled back
from spending on big-ticket items like cars, responded with 0% financing
on new automobiles.
GM grabbed the lion's share of positive press by being first to make the
Recent earnings reports have shown how much financial pain automakers
have had to absorb. Ford reported a $692 million loss in the
third quarter, while GM lost $368 million in the same period.
Numbers like that have PR people in Detroit wondering how much worse
things may get next year when, presumably, automakers already battered
by losses will no longer be able to afford to offer 0% financing to
"We're waiting for the major slowdown in autos," says Tom Eisbrenner,
EVP with Eisbrenner Public Relations, which, despite not reporting
revenues, is widely believed to be the largest local agency in
Dave Cole, director of the Center for Automotive Research in Ann Arbor,
MI, expects a great deal of business turbulence for the industry next
year. And, of course, that could mean smaller PR budgets for automakers
and auto suppliers. "Costs, wherever they are, are under attack now,"
says Cole. "Uncertainty is the name of the game."
This year, GM's PR "took a substantial reduction in our overall budget"
between 5% and 15%, says Steve Harris, VP of communications with GM.
He's expecting similar cuts next year. In today's environment, "so much
in this industry cannot be anticipated," he says. As a result, "We watch
our fixed expenses very carefully."
Harris has trimmed PR spending by cutting some projects, and by asking
his internal people to do more of the grunt work once assigned to
outside agency staff. What he wants now from agencies is specialized
Auto suppliers are taking their cues from the automakers. Gordon Cole,
director of global public affairs with Visteon, a major supplier to Ford
and others, says, "The auto industry is looking at their sales figures,
and we will adjust to meet their needs." This April, he put together a
network of local agencies around the country to give Visteon
local-market PR expertise, and he feels that's worked well for him. But
his PR spending next year will depend on auto sales. "Nobody has a clear
picture of the direction of things," he says.
Steve Rossi, president of McLaren Performance Technologies and former
head of US PR for DaimlerChrysler, wants to do more to promote his
company next year. "You cannot save your way to success," he says. "Now
is when you need more media relations." Rossi is trying to get more
coverage for his firm by doing such things as exhibiting at more trade
Eisbrenner thinks his firm will end the year slightly ahead of 2000
"The first half was flat, but it's been a very good second half," he
"The number of new business calls and pitches we're getting seems to be
Expanding business prospects
John Bailey & Associates recently nabbed Detroit's North American
International Auto Show as a client, and has seen revenues rise from
$2.1 million last year to $2.5 million this year. John
Bailey thinks he can hit the 20%-25% growth range next year. "We are
planning on a very solid year, based on commitments for spending that
clients are already making," he says.
But uncertainty in the auto industry is prompting many firms to
Bailey has hedged his auto bets by increasing healthcare from 20% of his
total revenue in 2000, to 30% this year.
Similarly, Stan Stein, SVP and MD of Manning Selvage & Lee's Detroit
office (known as almost an extension of GM's PR machine), is trying to
diversify his business by going after more non-GM work. "I sense a
softening in the marketplace," he says. "There's cautious spending by
And Strat@comm's Detroit office, which opened last year as Hill &
Knowlton left the market, has grown to seven people and about $1
million in revenue by going after accounts that are auto-related, but
also involve government and technology. One of its clients makes
software for in-car communications systems, for example.
Marx Layne isn't even known as an auto shop, but it picked up the
Volkswagen of America account this year, and expects revenues to climb
10%, according to partner Fred Marx. He's been trying to grow
professional services work and has diversified his client base - no
client accounts for more than 5% of revenues - to shield the firm from
an economic downturn. "We're certainly aware of the obstacles," he
Many others are feeling the auto pinch. PR Associates won't realize the
$1.1 million in revenue it had last year because of auto-related
weakness, says Fred Zosel, president. "Whatever normal is, is being
redefined," he says. "I'm not sure we can call next year a growth year
Likewise, Haas Associates started the year projecting a 20% jump in
revenues, but will end the year at about the same $4.2 million
recorded last year.
"It was a pretty good year until right now," says president Mark
"Next year, if we can stay flat, we'll be happy. Major automakers are
all talking about trimming their spending."
Those not tied to autos have had a less anxious year, but even they
admit that continued auto problems will eventually spill over to their
Lovio George doesn't work with auto clients, and saw its revenues climb
from $2.5 million in 2000 to about $3 million. But
president Christina Lovio is expecting only 10% growth next year. "We
are all affected by the automotive industry," she says.
Durocher Dixson Werba, which specializes in crisis communications and
public affairs, expects its revenues to be about the same as last year,
in the $1.2 million range, according to principal Gab Werba.
Seyferth Spaulding Tennyson, headquartered in Grand Rapids (but with a
Detroit office), sees its revenues increasing from $3 million to
$4 million this year thanks to its work with retail clients such
as Taubman Centers, a major mall operator. It's also projecting 10%
growth next year as clients trim internal staff and outsource PR to it,
says principal Chris Tennyson. The firm is picking up work from law
firms and counts the Detroit Medical Center and shoemaker Wolverine
Worldwide among its clients.
And Airfoil Public Relations, a start-up firm last year, will hit
$1.5 million in revenues this year by working with tech companies
and biotech firms. It's expecting to do $1.7 million-$2
million next year. The slowing Detroit PR market has forced Airfoil to
battle major international firms for projects in the $10,000-$20,000 range, a size once too small for bigger firms to
go after, says president and COO Janet Tyler.
But being a small firm is not necessarily a disadvantage. Luke Haase
left Detroit three years ago to start The Intelligence Agency in
Traverse City, MI. He still does business in the city with tech and
auto-related clients, but has found pockets of business closer to
Traverse City, working with a local maker of bulletproof vests and a
company that makes log homes.
He expects a strong 2002 as companies switch to smaller firms to get
Detroit is a hotbed of small shops with auto expertise, and has managed
to keep major multinationals largely out of the market. Shandwick closed
its Detroit office this year, for example.
Auto suppliers like to work with local talent that knows the intricacies
of their business. Normally that means Detroit shops can prosper in
their own backyard, but next year that yard could be a bit barren as the
auto business takes its economic lumps.
DETROIT PR AGENCIES
Rank Firm Name Revenue (dollars) Increase Staff
2000 2000 (%)
1 Manning Selvage & Lee 7,187,067 17 58
2 Weber Shandwick Worldwide 2,744,000 34 22
3 Haas Associates* 2,836,116 N/A 33
4 Burson-Marsteller 2,195,000 60 8
5 Caponigro Public Relations 2,140,838 24 20
6 John Bailey & Associates 2,074,514 48 26
7 Seyferth Spaulding Tennyson** 2,281,053 13 26
8 Bianchi Public Relations 845,475 31 8
9 Strat@comm 667,820 N/A 6
*Includes income from Ann Arbor office **Includes income from Grand
Rapids office 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.