New Venture Communications ranked number 16 in PRWeek's Northwest
regional market focus in 2000, with 33% growth. But New Ventures will
not be appearing next year. The Portland tech firm, which was launched
in 1998 and had 928% growth in 1999 working with start-up clients such
as Pixelworks, WebTrends, and WebCriteria, closed down last month, a
victim of the dot-com slide. Wave Rocks, another promising Northwest
agency that worked with internet clients, also closed earlier this
summer.
The Northwest's e-commerce promise has faded. No surprise, perhaps,
given what has happened across the industry, but a year ago it seemed
like it was this region's turn to shine after roiling in the shadows of
Silicon Valley for so long. With VC money pouring in and start-ups
popping up, the so-called Silicon Forest was ready for its close-up.
Now, following the bubble that had many chasing start-up dollars, PR
agencies in the area have taken a collective deep breath and are once
again looking to their fundamentals, figuring out ways that new or
expanded practice areas can be developed to attract business while they
work even harder to hold on to current clients.
Waggener Edstrom tops this year's agency rankings yet again, and with a
focus on technology and science, it has bucked the regional trend by not
having to make layoffs. "One of the blessings is that we have a
diversified portfolio, and clients that have been with us for a long
time," says Chuck Humble, EVP of the Portland office. "Clients now
really want an agency that will take the initiative to lead them and
stay ahead of their thinking, but in a practical, sensible,
block-and-tackle way."
Diversification is now a running theme with many agencies. Ray
Berardinelli, cofounder and president of now-defunct New Venture, says
he wishes his agency had looked for other business sooner. "Our clients
depended on VC money, and when the VC money dried up, so did the ability
to fund PR projects," he reflects. "As the sector went, so we went."
2000 boom time
The 2000 table demonstrates that brisk growth was realized throughout
the top ten agencies. Waggener Edstrom continues to lead the pack with
an income of $52 million, $42 million ahead of KVO, its
nearest rival. KVO, part of Fleishman-Hillard, moved from third to
second place with a 25% increase in income. MWW/Savitt, which is part of
the MWW Group, jumped up by 23%. Other agencies that fared well last
year were Seattle's Imagio and GCI Group/APCO Associates.
But there is no doubt that next year's rankings will reflect a leveling
off of growth, as clients in the region have cut spending on PR and
marketing overall, and the start-up culture has withered away. Across
the board, agencies have had to lay off staff as the times have become
leaner.
"Many clients have pulled their work in-house to save money," says Vicky
Hastings, SVP of Cole & Weber/Red Cell in Portland. The agency works
with a wide range of clients, including Intel, Nike, Tilamook Cheese,
and Texas Instruments. "As a result, the in-house PR managers are
overloaded with day-to-day tasks, and don't have the time or mind space
for strategic work."
But despite the downturn, some firms are still investing more in the
region. Oregon-based KVO opened its Seattle office in April. Atomic PR
launched its Portland office in January, and in February Waggener
Edstrom acquired Kirkland, a Washington-based shop. Agencies looking to
find talent will not have to look far, as recent layoffs have made
hiring much easier.
Job market
San Francisco-based Carlson & Company, an executive search firm
specializing in PR and marketing professionals in tech and biotech,
opened a Seattle office this year."For the past several years," explains
principal Valerie Pressley, "job seekers have been the ones driving
where they want to work and who they wanted to work for. They've been
making the calls on lifestyle decisions."
No longer. Employers are now calling the shots. "Today, candidates are
far more open to considering positions that will pull them out of the
area, and they're reassessing some industries they are choosing to work
in." Pressley adds that she has noticed an increase in demand for PR
people in "old economy" businesses like law firms and insurance
companies.
New business
While employees are pondering a possible change of direction, PR
agencies themselves are looking at new ways of attracting clients.
The advantage that the Pacific Northwest has over Silicon Valley is that
it was never associated with technology exclusively. The area is still
ripe with plenty of corporate gems like Microsoft and Intel on the
technology side, and consumer favorites like Starbucks, Amazon.com, and
Nike. Although Boeing's corporate headquarters has moved to Chicago, the
Puget Sound area still holds some 80,000 of its employees, as well as a
strong PR team. How they will be affected by the 30,000 layoffs
announced last week is as yet unclear.
Agencies are looking to expand their offerings into new areas, and for
new approaches to old problems. "Something that sets the Pacific
Northwest apart from the rest of the country is a strong interest in
sustainability and the environment," says Hastings of Cole & Weber/Red
Cell. The agency has set up a specialized practice in that space.
Publicis Dialog had a slight dip in income last year in the region,
which includes offices in Seattle and Boise, ID. This month, the firm
tapped chief creative officer Steve Bryant to lead its Seattle office,
which has healthcare, food, and technology clients. The move is intended
to boost the firm's creative PR offerings. "Creativity is at a higher
premium than ever in this business," Bryant says. "It is the glue that
holds together the different tools clients want to use to make a deeper
impression."
Will Ludlum, a partner and GM with Porter Novelli, which has offices in
Portland and Seattle, sees opportunities in the energy field. "The
energy space is ripe for further growth because the issues are so
broad-reaching in Washington and Oregon," he maintains. "They are issues
that transcend the state, but reflect the geographical region."
The agency, which has a strong technology background in the market, has
also been working with the Colorado Anti-Smoking Initiative.
Portland's Lane Communications, last year's PRWeek Boutique Agency of
the Year, embodies the kind of diversification other agencies are
adopting with its three practice areas: consumer, b-to-b, and
technology. With revenues of $1.4 million in 2000, president
Wendy Lane says the agency is on track to earn $2.3 million this
year, and she is adding to her staff.
Recent account wins of Persodie (an interactive voice response company)
and the Oregon Wine Advisory Board reflect the broad range of her
accounts.
But Lane is not immune to the market. "I've had clients, who, even
though they have fabulous coverage, their market is declining and
they've had to cut their budgets."
Imagio, which has been a dedicated tech shop since its inception, is
this week announcing the launch of a healthcare practice to leverage
experience gained in the health-tech area. "A lot of our work was with
the emerging tech companies, and those companies aren't getting funded
anymore," explains Ralph Fascitelli, president of Imagio. He says the
firm is pursuing opportunities in medical devices, hospitals, and
service providers and, to a lesser extent, biotech.
KVO is also looking to grow in biotech and healthcare, and has been
retained to work on a conference held by the Washington Biotechnology
and Biomedical Association on investment opportunities in that industry.
In tandem, KVO's parent company Fleishman-Hillard is installing a
healthcare practice in San Francisco to beef up the whole region's
health-tech offerings.
"Diversification is really crucial," says Sharon Van Sickle, KVO's
president and founder. "We've all been working together to look at the
West Coast holistically with respect to where we might field various
talent." Waggener Edstrom is also looking to expand into the health-tech
market.
Show and tell
Strong measurement tools have become essential for agencies from Silicon
Valley and throughout the Northwest as competition has grown more and
more fierce. "It's our job to become essential, and to illustrate to our
clients the bottom-line value of building a highly valuable reputation,"
says Kathy Savitt, president of MWW/Savitt. "There are many ways to
measure, from benchmark reputation research to quantitative research to
tying success with customer churn, or the successful resolution of
litigation support," she claims.
New companies are still popping up on client rosters in the region, even
if they are based outside the area. British Columbia-based JaalaM
Technologies, a network intelligence company with a Seattle office,
looked on both sides of the border for a PR firm as its new product
launch approached. The company recently retained Waggener Edstrom to
help with strategic planning on PR, research, and analyst and media
tours.
The financial stability of the PR firm was a factor in JaalaM's
decision. "Financial stability, especially in a turbulent economy, and
the ability to stand tall (were important)," Browne says. "They had been
through tough times before, and they have good backing."
As the economy continues to fumble, and with the enduring uncertainty
that last month's terrorist attacks in New York and Washington, DC only
exacerbated, PR agencies in the Northwest are trying to be more
flexible, and prepare for the unexpected.
Delayne Giardini, who was formerly in the PR field, is principal of a
company called One More Mind, which helps companies focus on their
goals. "What I am seeing in organizations right now is that the
leadership is tired, and management is complacent," she says.
And she knows it won't be easy to overcome. "This community really needs
some healing."
NORTHWEST PR AGENCIES
Revenue
Rank Firm Name (dollars) Staff Growth Location
2000 1999 2000 (%)
1 1 Waggener Edstrom 52,055,570 428 18 Portland, OR***
2 3 KVO 10,516,000 77 34 Portland, OR
3 2 The MWW Group 8,268,795 55 29 Seattle, WA
4 4 GCI Group/APCO
Associates 8,019,491 55 50 Seattle, WA
5 11 Imagio 7,319,308 101 119 Seattle, WA
6 NEW DDB Public
Relations 6,500,000 N/A N/A Seattle, WA
7 5 Shandwick* 6,356,000 60 28 Seattle, WA
8 12 Edelman 6,173,983 58 115 Seattle, WA
9 NEW Pacific Rim
Resources 4,300,000 49 22 Seattle, WA
10 8 Gogerty Stark
Marriott 4,019,521 19 5 Seattle, WA
11 NEW Text 100 3,647,662 36 62 Seattle, WA
12 15 Porter Novelli 3,337,000 33 99 Seattle, WA
13 9 Publicis Dialog 3,089,637 26 -18 Seattle, WA
14 16 Weber* 3,025,369 21 123 Portland, OR
15 NEW MacKenzie
Kesselring 2,800,000 30 55 Portland, OR
16 17 New Venture Comms 1,998,817 23 49 Portland, OR
17 9 Publicis Dialog 1,885,022 5 N/A Boise, ID
18 18 Richmond Public
Relations 1,563,396 16 20 Seattle, WA
19 19 Lane Marketing
Comms 1,437,491 20 66 Portland, OR
20 NEW The KMC Group 1,422,115 11 34 Bellevue, WA
21 21 Sterling Comms 1,100,000 10 83 Gig Harbor, WA
22 NEW HMH 825,000 7 7 Portland, OR
23 NEW OBPR 738,139 N/A 39 Portland, OR
24 24 Carter Ryley
Thomas 162,917 2 412 Portland, OR
25 NEW Horn Group 18,508 4 N/A Seattle, WA
TOTAL 132,176,211 33**
* Weber and Shandwick merged in September 2000;
** Average growth for all agencies in 2000 was 27%;
*** Includes income from Bellevue, WA office
