It's fall, and the leaves of New England are a burnt rainbow of
colors, from orange to red to brown. Not surprisingly, the leaves mirror
the New England PR market - healthy orange agencies, big, red-hot
high-fliers, and slowly dying firms, turning brown before they expire
completely.
The agencies also parallel the autumn season itself. Like the
transitional season between the explosive growth of summer and the death
of winter, New England agencies are also in transition. For years,
hi-tech was the best game in town. Now, as hi-tech enters its winter
slumber, new contenders for agency dollars are rising - sometimes in
related markets, including biotechnology, medical devices, healthcare,
and hospitals. For example, new client wins at Fleishman-Hillard's New
England offices, which jumped from 27th to 4th in the rankings (partly
through the 2000 acquisition of Woburn, MA-based tech agency Lois Paul
and Partners), include EXACT Sciences and Aspect Medical systems.
Terry Frechette, AD at PerkettPR, explains the current mood in New
England: "If you can deal with the difficult hi-tech world, no other
market scares you. Nothing sharpens a PR person's pitching skills like
the complete failure of an entire marketplace."
Of the companies surveyed by PRWeek, only one, Greenough Communications,
spoke of a continued, confined focus on information technology and
telecommunications.
With 1,510% growth last year, and entry into the rankings at 21st,
Greenough says it has undergone no layoffs or closures, and, indeed,
claims to still be hiring. President Phil Greenough says the firm is
investing in interactive webcasting, and has recently signed contracts
with companies including Sonus, Framework, and Formation for tech PR
services.
Boston-based Cone closed its four-year-old, nine-person New York tech
office at the end of the summer as it opened a public affairs office in
Washington, DC. The agency continues its focus on cause marketing. Cone
has taken on work with General Mills' school cash donation program, and
Yoplait's breast-cancer charity work.
Broadening beyond hi-tech
But, to stay afloat, many agencies say they plan to broaden their client
bases beyond pure-play tech companies.
Citigate Cunningham, for example, used to profit primarily from Boston's
hi-tech companies. The agency, which debuts in the rankings at number
nine, still represents hi-tech firms: It holds the corporate and
software accounts for Sun Microsystems, as well as Sybase and other
hi-tech high-fliers. But Cunningham executives say the agency is also
moving into medical technology, biotech, and pharmaceuticals. Recent
client wins, however, are still tech-focused: ComVault and
iAnywhere.
"The principles are very similar," explains Kristin Hilf, SVP and MD of
the Boston office. "Both involve taking complex scientific issues and
advances, and communicating them as benefits, clearly, succinctly, and
effectively."
Andy Beaupre, EVP of Boston-based international tech PR powerhouse
Brodeur Worldwide, says the firm's technology expertise is taking it
into markets agency founders never anticipated in 1985. In addition to
services added on to tech clients during IPO fever (such as investor
relations offerings), the top-ranked firm prides itself on jumping into
markets that are technology-driven rather than technology-specific.
An example is new Brodeur client ABIOMED, the company that makes
AbioCor, the implantable, replaceable heart. Brodeur has also recently
signed Iron Mountain, a records and information management company.
Brodeur's New Hampshire arm signed marketing software company
MarketSoft, as well as internet infrastructure company Concord
Communications.
However, diversification hasn't been the answer to all Brodeur's
problems; the agency had to lay off 18% of its US staff earlier this
year, removing 60 employees from the payroll. The layoffs were in part
due to the general slowdown in PR, but IBM's $50 million PR
reshuffling was also a factor.
The company had been a major Brodeur client for the past 13 years.
However, in time, this loss may be mitigated by the fact that Brodeur is
part of Omnicom's One Blue team, which picked up the customer contact
part of IBM's PR needs.
Boston's multipractice agencies have been able to diversify the
quickest.
Schneider & Associates, for example, admits that its portfolio was
spotted with dot-coms last year. But new work in the last two months
includes the healthy marketing campaign for Subway sandwich shops, a new
product launch from shopping-cart company McCue Corporation, Capitas
Financial, and public affairs work for Quarry Hills (a company planning
to develop a recreation complex in Quincy, MA). While hard times have
forced the agency from a ranking of 18th in 1999 to 24th in 2000,
Schneider & Associates marketing director Jennifer Bonner remains
hopeful about the future.
"Our new client wins are as diversified as our specializations," says
Bonner. "During the height of the tech boom, we dipped our toe into the
dot-com area. But based on what we learned from being a real estate
marketing firm in the '80s, we were careful not to put all our eggs in
one basket."
In contrast to tech heavyweights Cunningham and Brodeur, each of which
laid off staff following the dot-bust, Bonner says Schneider &
Associates has had no layoffs.
The tea party's over
Home-grown behemoth, number-two ranked The Weber Group, part of Weber
Shandwick Worldwide (WSW), is another shop that plans to move beyond its
tech focus with its slimmed-down workforce.
"In anticipation of Weber Shandwick Worldwide's merger with BSMG, we
will be broadening both our client base and service opportunities," says
Jamie Parker, EVP and GM of The Weber Group. Parker says the tech
practice has seen declines in clients and staff, but says the agency has
seen growth in consumer, interactive services, public affairs, and
biotech and health services.
To fill office space left vacant by The Weber Group layoffs, sister
agency Miller/Shandwick moved from Boston to Cambridge in September 2000
to share space and resources. At the same time, Miller president Tony
Sapienza and EVP Kevin Rudden were both dismissed, and WSW appointed
Parker to head both agencies. At the time of the physical merger, the
receipts of both operations were down 25%, and both had laid off 25% of
staff across all levels.
Similar layoff figures across the region show that New England-based
agencies, like New England-based companies, are no different from their
brethren nationwide - pulling back on budgets, new product launches, and
other "non-essential" items.
Catherine Marenghi, principal of Marenghi Public Relations, which fell
to 26th in this year's rankings, says PR was often the first thing cut
by newly penny-wise corporations.
"Even when we make the case, the money just may not be there for PR,"
says Marenghi. "Competition for PR dollars is brutal, and not everyone
may survive."
Employee communications, however, remains a bright spot. Layoff fever
has workers scared. As one corporate PR manager explains, she doesn't
want employees searching job listings when their time, used
appropriately, would negate the need for layoffs.
Corporates are also looking to sidestep the expense of an agency of
record by assigning more project work. Some agencies are reacting to
that change in assignments by recasting their offerings. Brenda
Nashawaty, cofounder and principal of 17th-ranked Chen PR, says many
agencies now offer specialized, project-based services like plan
development and speaker training.
"We are starting to see more of a packaged or modular approach," says
Nashawaty. "These can be good ways to establish a relationship with a
client company. Once an agency shows value on a project, there is a good
chance it will continue getting projects and eventually be signed to a
retainer."
Indies fighting the industry standard
A trend bemoaned by many Boston independents is the decrease in the
power of locally owned independents. Of the top ten, only three are
independently owned and operated agencies: Schwartz Communications,
Sterling Hager, and Fitzgerald Communications. Fitzgerald laid off five
people earlier this year, Schwartz laid off 20, and Sterling Hager let
12 staffers go.
All four agencies say layoffs have matched agency talent supply to
industry demands, and they forecast a sunnier future for the beleaguered
tech market.
So as the New England leaves continue to fall, agency leaders hope the
roots are strong and wind-wracked boughs will not fall. But the question
remains: Will clients spend enough dollars to keep the trees healthy
through an uncertain winter ahead?
NEW ENGLAND PR AGENCIES
Rank Firm Name/Location Revenue Staff Increase
2000 1999 (dollars) (%)
2000
1 1 Brodeur Worldwide* 39,000,000 N/A 19
Boston, MA
2 3 Weber Shandwick Worldwide 30,584,002 162 20
Boston, MA
3 2 Schwartz Communications 26,984,202 181 62
Boston, MA
4 27 Fleishman-Hillard ** 21,495,000 161 1,778
Boston, MA
5 5 Ogilvy 15,291,100 NA 52
Boston, MA
6 9 Sterling Hager 12,926,715 93 58
Watertown, MA
7 10 Porter Novelli 9,675,000 N/A 22
Boston, MA
8 8 Fitzgerald Communications 9,584,159 N/A 5
Cambridge, MA
9 N/A Citigate Cunningham 8,825,100 47 62
Cambridge, MA
10 15 PAN Communications 8,724,000 N/A 74
Andover, MA
11 6 Cone 8,399,132 56 27
Boston, MA
12 N/A Regan Communications Group 7,300,000 32 12
Boston, MA
13 14 Earle Palmer Brown/PR 6,005,298 31 17
Stamford, CT
14 12 Manning, Selvage & Lee 5,526,191 38 -15
Boston, MA
15 16 The Rasky Baerlin Group 5,414,064 24 29
Boston, MA
16 18 BSMG Worldwide 3,982,150 14 18
Boston, MA
17 17 Chen PR 3,826,610 27 18
Boston, MA
18 N/A Rainier Corporation 3,217,490 N/A 42
Princeton, MA
19 N/A Bishoff Solomon Comm 3,159,100 25 55
Boston, MA
20 20 The Horn Group 2,986,136 18 33
Braintree, MA
21 N/A Greenough Comm Group 2,850,000 27 1,510
Boston, MA
22 N/A Text 100 2,612,711 16 93
Boston, MA
23 29 Edelman 2,510,652 17 210
Boston, MA
24 23 Schneider & Associates 2,260,738 15 24
Boston, MA
25 25 Jacobs & Prosek PR 2,041,449 12 27
Stratford, CT
26 28 Marenghi Public Relations 1,916,085 18 74
Boston, MA
27 26 Environics Communications 1,914,155 14 49
Stamford, CT
28 00 Emmanuel Kerr Kilsby 1,806,333 14 8
Stamford, CT
29 N/A The Jelly 1,693,000 15 N/A
Woburn, MA
30 N/A Duffy & Shanley 1,412,057 25 14
Providence, RI
*Includes Brodeur's Stamford, CT and Portsmouth, NH offices.
**Includes Fleishman's Providence, RI 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.
