Market Focus Boston - Managing the Boston boom - Boston has been one big hi-tech party lately, and PR folk have been having as much fun as anyone. But will the good times last?

Boston has enjoyed every bit of the hi-tech bonanza, ranking second only to Silicon Valley as the nation's hi-tech hotspot. And the PR industry has been right there along the way, taking advantage of its still-booming economy.

Boston has enjoyed every bit of the hi-tech bonanza, ranking second only to Silicon Valley as the nation's hi-tech hotspot. And the PR industry has been right there along the way, taking advantage of its still-booming economy.

Boston has enjoyed every bit of the hi-tech bonanza, ranking second only to Silicon Valley as the nation's hi-tech hotspot. And the PR industry has been right there along the way, taking advantage of its still-booming economy.

There are about 5,000 hi-tech companies in the state of Massachusetts, employing nearly 300,000 people, according to data from Mass High Tech, a journal of New England technology. The majority of these companies are located in the Boston area, which has expanded the ever-growing Route 128/Interstate 495 corridor even farther. Some now argue that the Boston hi-tech zone spans all the way down to Worcester and even spills into southern New Hampshire.

And while Silicon Valley may be the more recognizable center for tech itself, some claim Boston has the edge when it comes to the PR side of things.

'If Silicon Valley vies with Boston to be the tech capital of the world, certainly Boston is the tech PR capital of the world,' argues Burt Peretsky, senior counsel for editorial services and marketing at Miller/Shandwick Technologies in Boston.

But Boston has a lot more to offer than just hi-tech. The area is home to such financial powerhouses as Fidelity, Putnam and John Hancock Consumer giants include Gillette, Polaroid and Ocean Spray. There are dozens of hospitals and universities that are leading the way in healthcare and biotechnology, not to mention nonprofit activities. And don't forget the real estate market, which, after a fall in the '80s, is going strong.

In short, Boston has a number of diverse businesses and organizations - and they're all vying for a little PR.

Growing pains

Rankings from PRWeek's Top 25 PR agencies in Boston don't show a lot of change from last year's figures (see chart), with the exception of a couple firms that were bought out or merged with other agencies. Ogilvy has jumped from No. 14 to No. 4 in the past year after acquiring Feinstein/Kean.

MSNL bought Agnew, Carter, McCarthy. And Canadian-based GPC has debuted at No. 10 on the list, now that it has taken McDermott O'Neill & Associates under its roof. The only significant difference in the top 10 is the considerable amount of growth these agencies have seen. At 39%, it's well above the 28% industry average. Nearly all of the top 25 agencies posted a gain this year, many of them significant. Sterling Hager, one of the few top firms in Boston that hasn't been snatched up or bought out, celebrated a 97% gain. The Horn Group, ranked No. 16 again this year, posted a 115% increase.

Triple-digit growth merely reflects the boom in Boston PR. But with that progress comes a few growing pains. Recruitment is a key factor these days for PR managers. They're recruiting more aggressively - and more creatively - in this industry than ever before, thanks to a tight job market spurred by the region's rapid growth in PR jobs.

'Every day we get a call saying 'I need to hire someone,'' says Paul Wetzel, PRSA's Boston chapter adminstrator. He adds that PRSA membership has swelled to 450 from 300 in the past two years, a good indication of the foothold PR has taken on the region.

There's no sign of Boston's boom letting up anytime soon.

'What's driving our business overall is that the pace of innovation is accelerating in America, and the pace at which innovative ideas are being commercialized is accelerating,' says Steve Schwartz, president of Schwartz Communications, which has grown by 43% over last year's income. 'And Boston is one of the centers of innovation in the world.'

The jury is still out on the effects of the recent spate of mergers and acquisitions in Boston, another symptom of the hot business environment.

Andy Beaupre, EVP of Brodeur Worldwide, says, 'Bigger gives you more resources. That's what clients want.' Despite this trend of buyouts and mergers, Beaupre insists that smaller and mid-size firms will continue to flourish in Boston. 'There's sort of a rebirth of the industry,' he says. 'And it's good because there's plenty of business for everyone.'

The merger on everyone's lips these days is Weber and Shandwick. Arguably a conservative town, Boston seems more ready than ever to play in a global field.

Tony Sapienza, president of Miller/Shandwick Technologies in Boston, maintains that 'for the foreseeable future there's going to be two brands.

Physically we're going to maintain separate locations and just have more collaboration.'

Jamie Pearson, EVP and GM of The Weber Group in Cambridge, says there's room for everyone. 'There are a lot of players here and people have a lot of choices.'

There are some smaller firms that believe the emergence of bigger firms can actually benefit them.

'As agencies have grown bigger, their motivations have moved away from client service and quality to increasing revenue and their bottom lines,' says Phil Greenough, president and CEO of Greenough Communications Group, which was founded a year ago and boasts 30 employees.

'As a result, clients are questioning the value of these conglomerates and are seeking relationships with smaller, more focused firms that possess the energy, aptitude and experience that will help drive their business.'

Big or small, most agencies agree it's important to expand their services.

Scott Mercer, director of corporate communications at Newman Communications, a mid-size firm that's been in Boston for 10 years, says most of his agency's clients are looking for a 'one-stop shop.'

'If you're not going to be bought by another company, you have to diversify to survive,' Mercer says.

The party's not over

As mergers and acquisitions continue and the PR landscape molds itself to fit that growth, the rebirth of Boston PR will continue.

But with that evolution and expansion has come a sense of sobriety. PR agencies are still basking in the boom, but now it is with a sense of responsibility and maturity.

'Last year was the peak of the dot-com boom. It was just no-holds-barred,' says Beaupre. 'What's happened over the past year has been a definite shift in the marketplace. The dot-coms have hit the wall. The novelty has worn off. It's getting more sophisticated. Clients can't just spend gobs of VC money anymore. They have to be accountable.'

While this sentiment is echoed by many in Boston PR, everyone agrees that the money and the capital is still flowing. There is plenty of work for everyone - and not just in the hi-tech industry.

'You're seeing technology infiltrate all sorts of industries,' says Chris Nahil, SVP and director of communications strategy for GPC O'Neill. 'It's just a great time to be in Boston. The economy is still booming. It's a vital and exciting city.'

PR firms are flocking to Boston. The PRSA's Wetzel estimates that there are 300-400 PR practitioners in Cambridge alone, the hub of biotech innovation.

'There was nobody there five years ago,' he says.

Almost all agencies in the top 25 reported a growth in personnel, and more and more firms are setting up shop in Boston. And PR firms aren't just expanding their work force, they're also expanding their scope. With a diverse economy, good quality of life and a history embedded in the founding of this country, Boston is at the forefront of the PR industry.

Ranking Agency Name DC income (dlrs) Growth Total income DC

99 98 1999 1998 (%) (dlrs) 1999 %

99

1 1 Brodeur







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