MARKET FOCUS: ARIZONA - Phoenix rising. Arizona's population swelled by 40% in the last decade, yet few big PR firms have established a presence there. Sherri Deatherage Green reports

Arizona's population has been rising as fast as the mercury on a summer's day, but so far PR hasn't seen the expansion enjoyed by other industries.

Arizona's population has been rising as fast as the mercury on a summer's day, but so far PR hasn't seen the expansion enjoyed by other industries.

Arizona's population has been rising as fast as the mercury on a summer's day, but so far PR hasn't seen the expansion enjoyed by other industries.

Forty percent more people call Arizona home now than in 1990, with more than half the state's population living in the Phoenix area. 'It's almost as if you go to bed at night and there's an empty lot next to your house, and you wake up the next morning and somebody's moving in,' jokes Steve Carr of the Kur-Carr Group. With a metro population of about three million, Phoenix has become the sixth largest city in the nation and an important hub for the fast-growing states of the Southwest.

Del Webb's Sun City retirement communities no doubt contribute to the state's image as a Mecca for tourists and senior citizens. While Phoenix and its suburbs boast a staggering 174 golf courses, census data show the city's median age to be slightly younger than the national norm of 34.3. Real estate, manufacturing and technology heavily influence the local economy.

The growth rate among PR agencies in Arizona, however, has lagged behind the national average. Most of the players in Phoenix's close-knit PR market are locally owned and are often arms of advertising agencies. In other Arizona cities, such as Tuscon and Flagstaff, PR is practiced by individuals or small firms. A large agency by Arizona standards employs 10 to 15 people and bills no more dollars 2 million per year. Few national agencies even operate outposts in the area; most seem content to call on the locals for help as needed.

'You would think that a market this size would have much larger agencies in it,' says Scott Hanson, president of HMA PR. The nine-person agency, which recently changed its name from Hanson, Moser & Associates, grew about 10% last year, with dollars 1.1 million in revenues. It serves Administaff, the Arizona Department of Health and CIGNA Healthcare of Arizona.

Local practitioners agree that the dearth of national corporate headquarters in Arizona has kept PR from cashing in on economic growth. Some of the area's largest employers, such as Motorola and Intel, make PR decisions from their home bases. Even corporations that do call Phoenix home - Dial, Petsmart, America West Airlines, U-Haul and Phelps Dodge mining and manufacturing company - are more likely to handle PR in-house or hire an out-of-state agency.

Much of the Phoenix economy is rooted in manufacturing or b-to-b, observes Lynn Adams, Petsmart's communications director. That's why the pet supply chain has turned to the MWW Group in New York for consumer PR assistance.

Petsmart consolidated its outside PR business with MWW last year, dropping Publicis Dialog and Hill & Knowlton. Petsmart employs only four in-house PR people, and Adams said her staff had a hard time maintaining a unified message while using multiple agencies.

America West also hired a public relations agency of record in late 2000.

Former Burlington Northern Santa Fe executive Jim Sabourin moved to Phoenix from Fort Worth, TX, in midsummer to become the airline's VP of corporate communications. He realized that the company's seven-person staff needed some outside assistance and chose Manning Selvage & Lee's Los Angeles office to help plot employee communications and media relations strategies.

Life in Silicon Desert

Although Phoenix may not have pioneered the technology segment, local techies sometimes refer to the burgeoning Tempe/Chandler/eastern Phoenix area as 'Silicon Desert,' and a number of e-commerce companies are based in nearby Scottsdale.

Some well-recognized names call Arizona home. For example, Honeywell is based in Phoenix. Motorola's government electronics division and sizable semiconductor plant are also major employers there, and Intel's second biggest manufacturing facility is located in Chandler.

However, both Motorola and Intel employ a dozen or so PR people and don't often work with local firms. So while some PR agencies reported losing clients in the dot-com fallout, Arizona wasn't hit as hard as regions with more invested in speculative Internet technology.

Brodeur stepped into Arizona's national-firm void three years ago, and its Phoenix office has grown rapidly. SVP Brian Chapman opened up shop with one colleague and has grown the staff to 32. Revenue almost doubled in 2000 to nearly dollars 4 million, making Brodeur the largest agency in town by far. The firm used its ON Semiconductor, Corrent and Avnet accounts in Phoenix as the basis for a semiconductor practice that now extends beyond the Arizona border.

Brodeur's Omnicom sibling, the Porter Novelli Convergence Group, is the newest national agency in town. The nine-person office opened about 18 months ago to serve Hewlett- Packard's digital imaging group. Although HP has no Phoenix operation, the city makes a convenient midway point between the company's Colorado and California sites, and PN general manager Kris Brown says the firm recognized technology potential in Arizona. PN moved into bigger offices in November to actively pursue local business, Brown says.

Gambling also is big business in Arizona, with 19 operating casinos and 37 sites authorized for gaming, notes Cramer-Krasselt PR director Lisa Noble. About 10 of Cramer-Krasselt's 80 Phoenix employees practice public relations, while the rest focus on advertising and creative work. Clients include the Salt River Project utility and the Cliff Castle Casino in Northern Arizona, along with some banking and home-building companies.

Revenue remained steady in 2000 at about dollars 1.5 million, says Noble.

'We have seen interest from national agencies in our market,' says Sara Fluery, president of BJ Communications, one of Phoenix's larger independent firms. With 14 employees and about dollars 1.7 million in 2000 revenue, BJ is affiliated with MS&L. Like a few other Phoenix firms, BJ does occasional legwork for major nationals such as Fleishman-Hillard and Edelman. BJ's client list includes the state ozone alert program, PG&E Generating and the Arizona Mills 'shopertainment' center. Fluery surmises that the big players may wait to enter Phoenix until the PR market can support offices with revenues of dollars 5 million or more.

Like several other firms in Phoenix, BJ gets involved in issues management but not outright lobbying. Most lobbying in Arizona is handled by individuals or small firms, with Jamieson Gutierrez leading the pack. Founded in 1986 by former state Sen. Alfredo Gutierrez, the firm does lobbying and issue advocacy but not candidate campaigns, says partner Kathy Hancock.

Public affairs clients include America West, Cox Communications, Goodyear and the Phoenix Suns. The firm also specializes in working with Native American tribes in the Southwest and as far away as Maine. Rex Hackler, a former communications director for the Office of Indian Affairs, mans a branch office in Washington, DC.

Other notable local firms include Martz PR and Mullen PR, both of which promote individual Del Webb developments and other clients. Mullen reports 14 employees and Martz 17, both with 1999 revenue of more than dollars 750,000 dollars. Reister-Robb's eight-person PR department is part of a larger advertising firm of the same name. The agency is helping the Arizona Department of Health Services with its tobacco prevention program and represents Develop Online, an Intel subsidiary.

Bright future

PR directors at Petsmart, Phelps Dodge and Del Webb praised the Kur-Carr Group, a small but elite agency they occasionally turn to for help on local projects. Carr and partner Sally Kur both worked for Arizona Public Service's parent company before founding the agency. With only three full-time employees, the firm calls on senior solo practitioners for extra help.

Chapman expects Brodeur to face more national competition in Arizona within the next two years. He doesn't think his office's revenues will double again in 2001, but he does expect 40% to 60% growth. 'There will definitely be more national-firm presence, particularly as the ones who are here continue to have success,' he predicts.

Fluery agrees the future is bright for Arizona PR, and she expects more national firms to move in and more small agencies to pop up. 'Phoenix has really just come into its own.' Carr states.


Brodeur 32

Martz PR 17

BJ Communications 14

Mullen PR 14

Cramer-Krasselt 10


Porter Novelli Convergence Group 9

Reister-Robb 8

Jamieson Gutierrez 7

Kur-Carr Group 3

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