Graham says PR will survive tough times

ST. LOUIS: A bullish John Graham, chairman and CEO of the nation's

largest PR firm, Fleishman-Hillard, has said that the US corporations

reluctant to commit to PR spending early this year are starting to turn

the spending spigots back on.

While bookings were slow two months ago, 'we're seeing more decisions

being made now than 60 days ago,' Graham told PRWeek. 'We're starting to

see the budgets break loose.'

At a Fleishman company conference in Dallas March 23, Graham also turned

industry predictions of doom and gloom on their heads by forecasting an

increase in Fleishman's revenues by 36% this year, only slightly down

compared to a 42% rise to dollars 300 million in 2000. Two thirds of

that increase was through organic growth. Fleishman expects to double

its revenues over the next three years, again with the majority coming

from organic growth.

However, he acknowledged that the first two months of this year were the

toughest and slowest since the early 1990s, especially during the Gulf

War, when corporations also froze plans for PR agency spending. 'It's a

difficult economic environment, but we'll come through it in good

shape,' he said.

While a number of agencies have suffered recently from the downturn in

the tech market - having to radically cut costs and lay off staff -

Graham said: 'We've suffered a little bit in technology, but not

appreciably.' Fleishman's West Coast operations did the most work with

dot-com clients and 'a number of dot-coms in certain offices don't exist

anymore,' he said. But the firm has managed to avoid major layoffs in

its tech practice by garnering more tech business from old-line

companies, such as long-time client Emerson Electric, which are moving

into the online economy. 'A lot of old economy clients are now in the

new economy and we've helped them make that bridge,' he said. Tech fees

account for about 25% of Fleishman revenues.

The firm will look for acquisitions in Asia this year and hunt in the US

for firms with healthcare capabilities, he said.

Fleishman holds an agency conference every three years. This year's

meeting saw 2,200 staffers from 76 offices worldwide journey to Dallas

for three days of speeches and 45 workshops.

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