IT'S NICE TO BE NICHE: Hyper-specialized agencies are bringing inthe bucks, reports Aimee Grove

While the rest of the PR world sweats out the slowing economic

growth and the fall of the dot-com sector, Chicago-based agency

principal Carolyn Grisko says her six-year-old firm will likely continue

to thrive. That's because Grisko specializes in what she believes to be

a recession-proof niche: airports.

Grisko & Associates handles PR and community relations for Chicago's

O'Hare and Midway airports, Detroit Metropolitan Airport, Rickenbacker

International Airport in Columbus, OH, and a handful of aviation-related

clients, including airlines and the Air Transport Association.

'As air travel continues to increase, cities are continually building

new terminals and runways, all of which bring the same issues of noise,

pollution and traffic impacting the neighboring communities,' she


Meanwhile, in Pittsburgh, PA, Debra Jacobs says she has identified an

equally lucrative PR niche: marketing communications for clients

involved in the classical arts - opera singers, dance companies,


'There's a common misunderstanding that I work with starving artists,

but, actually, there is a lot of money in (promoting) the classical

performing arts,' says Jacobs, whose partner in the year-old Jacobs &

Associates is a tenor and a vocal professor at Carnegie Mellon


Niche rising

Although the two agencies serve very different types of clients, both

are part of a growing trend. While today's big agencies get bigger,

gobbling up the specialist of yesteryear in hi-tech, healthcare and

public affairs, a crop of hyper-specialized PR agencies has emerged,

cashing in on increasingly narrow niches. It's possible to find firms

focused on everything from law firms to maternity wear.

'Specialization is on the rise, mainly because there is enough business

out there to support niche firms,' says agency consultant Lee


'(Specialization) is the main thing clients are looking for these


Agency search consultant Jerry Swerling says more and more of his

clients have asked him to find PR firms with the kinds of unique

qualifications and expertise that traditional, generalist agencies don't

have. And more major corporations with large agencies of record are

starting to consider smaller, specialty boutiques for certain specific

aspects of their business.

'I recently represented a hi-tech company that needed international

trade experience,' says Swerling. 'Another wanted IR, corporate PR and

turnaround expertise - and experience working in their particular

industry sector.' He says major-name generalist agencies are at a

distinct disadvantage in pitching these types of accounts.

Perhaps the biggest factor driving the rise in niche agencies is

actually the agency world's current consolidation craze.

'The specialist agencies get the highest valuation and command the

highest prices,' explains Rick Gould, whose accounting firm, Gould &

Co., specializes in PR firms and M&A work. 'Generally, they can charge

higher rates for their expertise, they attract a higher level of

clientele, and they tend to generate much higher profit margins than

generalist agencies.'

Benefits for agency and client

In a universe of PR firms that seems to grow larger by the day, the

ability to brand an agency as expert in one particular area is important

for recruiting and positioning for new business. It also pares down the

need for proactive marketing.

'When you become well-known and established as experts, you are often

called upon to speak at trade organizations and tend to get most of your

clients through referrals,' says Jani Aronow, co-founder and principal

of Aronow & Pollock in New York, which focuses on promoting food and its

health benefits to consumers.

On the other hand, 'If you are a generalist agency, it's tough to build

a name for yourself,' points out Scott Allison, a former SVP with San

Diego's Gable Group who currently heads up the San Francisco office of

Internet specialist firm, Connors Communications. 'You become jack of

all trades, master of none.'

Some specialist shops carve out a slice of the PR pie from large

companies that already have a big name agency of record by targeting an

area neither the corporate team nor the other PR agency have the time or

contacts to handle. For example, Newton, MA-based Wanger Associates

works with companies that are looking to promote their corporate

work/life benefits to employees and the public via media features like

Fortune magazine's 'Best Companies to Work for' issue.

'Every major company now offers such work/life balance programs, but

usually the core PR team doesn't have time to proactively communicate

these stories,' says Barry Wanger, principal.

On the client side, niche boutiques often can work more quickly and


These shops build up a database of media contacts that can be referenced

across clients, and reporters familiar with an agency's niche are more

likely to contact its representatives when stories involving a

particular industry arise.

'Niche agencies can come in and hit the ground running, unlike a

generalist firm that has to spend time getting all the background and

learning the market,' adds Grisko.

That was the experience of former Qualkids marketing director Joe

Carlucci when he worked with Child's Play Communications, a New York PR

agency devoted to products and services for the maternity, kids and new

mothers markets.

'You don't have to educate the agency about key players, important

tradeshows and top publications,' says Carlucci. 'With a bigger firm,

everything we did had to be researched and studied before taking


There is also the advantage that smaller specialty agencies are more

likely to have senior-level staff working the phones on their


'Successful vest-pocket PR firms are often run by people with a high

degree of media savvy, who know the value of building rapport with a

variety of publications and reporters, whereas the big agencies are more

expert at the agency business itself,' says Burke Stinson, senior PR

director for AT&T. 'That's because most of them farm out the pitching

duties to 24-year-old account execs with no knowledge of the news


Synergy between clients in related industries is often cited as another

benefit of specialization. For example, Richmond Public Relations in

Seattle, which represents hotels, food chains and restaurants throughout

the Pacific Northwest, often brings together two or three of its clients

for co-promotional events.

The downside of specialization

But there are drawbacks to specialization. Focusing on a narrow niche

limits an agency's field of potential clients, especially because of the

risk of conflicts.

'When you start out, you need to have some immediate successes, so start

with what you know best,' says Louis Richmond, who started his food- and

hospitality-focused firm after eight years with the Sheraton hotel


'But staying so specialized in one area can limit your growth after a

while, especially if you're not in New York.'

Specialty boutiques might have to work harder to find and hire qualified

staff. 'Recruiting will be more difficult,' says Justin Meyer of

Marshall Consultants, an executive search firm specializing in PR and

marketing professionals. 'You'll need to look at a larger field of

candidates to find someone who is interested in your particular niche

and looking to develop an expertise in that field. It's a little bit

like panning for gold.'

Finally, narrowly focused firms often find it tough to break into areas

other than the field or specialty for which they are known, making them

vulnerable if that sector stumbles. Many of the agencies that sprung up

and earned a name for themselves as branding specialists for consumer

Internet start-ups are suddenly looking for ways to reposition

themselves as general hi-tech agencies.

Still, most industry experts agree that the advantages of specialization

far outweigh the disadvantages, especially since consistent, quality

work, not necessarily huge growth, drives most specialty firms.

As Aronow, whose 15-person agency counts Campbell's Soup and the US Egg

Board among its clients, puts it, 'We specialize in food because it's an

integral part of our psyche and everyone's lives, so we knew it would be

an everlasting area of opportunity. Plus, it's just lots of fun.'


1. Before deciding to specialize, consider the following:

- Who are your competitors, i.e., which agencies are handling the top

companies in this field?

- How will you compete with these agencies?

- How much are people in this field willing to pay for PR?

- Is the niche big enough to offer opportunity to grow?

2. Once you decide to move forward and have figured out how to position

yourself in a given niche, take steps to establish credibility as an

expert. For example, line up speaking engagements at tradeshows and

pitch bylined articles to key industry trades.

3. For new business purposes, cultivate relationships with agency search

consultants, as well as the heads of bigger, generalized firms who might

be able to pass along projects and clients better suited to a boutique


4. Establish a network of freelancers and other small agencies so that

you can meet client needs when they arise outside your areas of

expertise, for example in crisis communications or IR.

5. When recruiting employees, emphasize career path in the field itself,

i.e., the ability to develop valuable expertise, as the benefit of

working there, rather than simply paying more in salaries. Be prepared

to invest more time in the search for employees.

6. Don't be afraid to take on other types of business at times. Not only

is it energizing for employees, it also ensures that all your financial

eggs aren't in one basket.

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