MARKET FOCUS NEW JERSEY: NJ: in the shadow of giants - New Jersey PR shops had a poor showing in PRWeek’s rankings. But Craig McGuire reports that hi-tech and healthcare are a hearty base for this unique scene

Sulking behind more influential neighbors like New York and Philadelphia for so long would give any state identity issues. However, momentous growth in the local economy the last few years together with new methods of communication, have given Garden State PR pros something to get excited about.

Sulking behind more influential neighbors like New York and Philadelphia for so long would give any state identity issues. However, momentous growth in the local economy the last few years together with new methods of communication, have given Garden State PR pros something to get excited about.

Sulking behind more influential neighbors like New York and

Philadelphia for so long would give any state identity issues. However,

momentous growth in the local economy the last few years together with

new methods of communication, have given Garden State PR pros something

to get excited about.



At the same time, New Jersey PR executives shouldn’t break their arms

patting each other on the back. The industry here is worth just over

dollars 15 million in fee income, and grew by an estimated 11%,

according to PRWeek statistics.



That’s well behind the national average growth of 28%, according to

PRWeek’s Agency Rankings survey.



That has forced the MWW Group (New Jersey’s PR agency leader by far) to

look elsewhere for the majority of its impressive dollars 10 million

(58%) growth. The East Rutherford office now accounts for little more

than one fifth of national fee income, as expansion has continued in

Washington, D.C. and California.



But while the New Jersey PR scene may not be keeping pace with the

industry in general, it is making progress in two key practice areas:

hi-tech and healthcare.



From telecommunications to financial services, New Jersey has lured some

big names from across the Hudson by dangling lucrative tax

incentives.



This migration has helped forge key business centers for hi-tech

industries.



It’s about time, considering Thomas Edison and Albert Einstein once

called New Jersey home. The software industry has spread throughout the

state, and there’s a mixed hi-tech concentration along the US 1 corridor

leading to Princeton. Jersey City has also become a center for financial

services companies, with heavy hitters like DLJ Direct, National

Discount Brokers, Knight/Trimark and Goldman Sachs setting up camp.



New Jersey is No. 1 in private-sector spending on electronic research

and a leader in telephony. Not to be outdone by counterparts in Northern

California (Silicon Valley), lower Manhattan (Silicon Alley) and the

Pacific Northwest (Silicon Forest), New Jersey even coined its own

hi-tech moniker: Silicon Parkway.



’Not only does northern New Jersey alone boast more hi-tech firms than

all of Silicon Valley,’ points out MWW president and CEO Michael

Kempner, ’but New Jersey has more Fortune 500 companies than New

York.’



With the largest hi-tech practice in the state, MWW reported dollars

6.25 million in fee income (the PRWeek chart shows a 32% decline because

the 1998 figure includes the New York office). Of MWW’s roughly 60 new

in-state clients, 35 are hi-tech firms.



Unfortunately, for a state in which hi-tech industries employ one out of

every 10 workers (paying a salary nearly double the state average), some

observers say the hi-tech sector hasn’t received the attention it

deserves.



’The state has done such a poor job marketing the hi-tech presence, when

in fact New Jersey is as much, if not more, of a tech center than

Seattle or New York,’ says Kempner. ’Under the current administration, I

don’t think we’ll see any improvement. Hopefully the next governor will

see this as a priority.’



While the state’s hi-tech industry struggles for recognition, New

Jersey’s other major area of PR growth, healthcare, moves along without

the identity crisis.





The medicine chest



’New Jersey’s been known as the medicine chest for the nation for some

time,’ explains Josh Weinstein, president of Torre Lazur Public

Relations (which was called Torre Lazur/Weber until January of this

year). Dedicating itself entirely to healthcare PR paid off for the

Parsippany-based agency in 1999, as it enjoyed 142% fee-income growth,

reporting dollars 1.1 million.



New accounts include Baxter Healthcare, Daiichi Pharmaceuticals and

Janssen Pharmaceutica.



Marlton-based Anne Klein & Associates added several big healthcare

accounts, including Horizon Mercy, the Delaware Valley Healthcare

Council and Mainline Health.



’Last year we certainly got an increasing amount of work in healthcare,’

says president Anne Klein. ’That’s because there are just so many more

issues facing hospitals and healthcare organizations today.’



But rather than throw more resources to build up the healthcare practice

quickly, Klein, like many of her counterparts, is hedging her bets with

a more diversified client roster.



’I have purposely done this to insulate my agency from the up-and-down

spikes in the hi-tech and healthcare areas,’ says Klein. ’When the

economy is good, everybody can afford everything. But, when the economy

is not good, there will be more of a need for employee communications

and crisis management. We just haven’t suffered those ups and downs for

a while.’



Whether it’s hi-tech, healthcare or any number of disciplines, it

appears that it’s getting easier for New Jersey PR agencies to attract

out-of-state business. Many large, deep-pocketed corporations are now

using NJ outfits, says Joan Wainwright, vice president of corporate

communications at drug maker Merck & Co.



’With all the technology available today, the location of an agency

isn’t that important,’ she says. ’What is important is the quality of

the work produced by the agency and the talent/skills of their

employees.’



Even more important, Wainwright says she sees more people and companies

specializing in the industry.



Eyeing out-of-state opportunities of his own, Ken Ribotsky, president of

Ribotsky Worldwide (dollars 191,985 in 1999 revenue), says New Jersey’s

up-and-coming image is working to his advantage.



’Out on the West Coast there’s so much business you’ve got agencies

interviewing the clients to see if they want to work with them,’ says

Ribotsky. ’So, it’s not surprising that we’re getting calls from

California to New England.’



Trailing MWW in 1999 was MCS (19% growth to dollars 3.1 million in fee

income) and Star/Rosen Public Relations (22% growth to dollars 1.3

million).



’The borders are breaking down,’ says Steve Rosen, president of

Star/Rosen Public Relations. ’I’ve noticed other agencies winning

business from all over the country, when in past years regional firms

only did regional work.’ Rosen also attributes much of his growth to

technology; the agency’s biggest win of 1999 was San Francisco-based

KeraVision provider of an alternative to laser eye surgery.



Manhattan-based Spring O’Brien established a Morristown, NJ satellite

office in March 1999, and then wasted no time in vaulting up the

rankings, due in part to the presence and support of its nearby

headquarters. The agency, whose New Jersey staff has grown from two to

10, reported dollars 290,000 in 1999 income. New accounts included

lucrative travel PR contracts with the Cayman Islands, Hong Kong Tourist

Association and The Greek National Tourist Organization.





New York service, New Jersey price



’A big selling point is we are able to provide the same quality services

as New York and Philadelphia, but often at New Jersey prices,’ says Marc

Weinstein, senior vice president and managing director of Spring

O’Brien’s New Jersey operation.



Berry & Associates is another New Jersey firm heavily into employee

communications and related disciplines, which take up 80% of its client

roster. Berry made a modest 2% growth gain, reporting 1999 income of

dollars 683,371. New accounts for Berry include Hoffmann-La Roche, NECA

(National Exchange Carrier Association) and the Sussex County Democratic

Committee.



’The hi-techs have driven the employment marketplace goofy,’ says agency

president Bob Berry. ’They’re starting to realize you can’t get to

profitability without your employees, and you can’t motivate without

proper employee communications. Common sense.’



New Jersey agencies that saw earnings slide last year include

Califon-based The Stephenson Group (a 7% decline to dollars 776,685) and

Red Bank-based Danlee PR (a 20% decrease to dollars 715,993). Danlee

dropped three rungs in the rankings from 1998, mainly because of an

unsuccessful merger, and later de-merger, with the DHM Group. A smaller

agency favoring steady growth, Danlee did manage to pick up

Wineaccess.com.



While the New Jersey PR scene may look rosy now, Danlee managing

director Anne Higgins says a downturn could be just around the corner.

’I’ll tell you, everybody rushed out to get dot-com clients, but now

they’re the ones left holding the bag,’ she says. ’I know at least five

people sitting on receivables they are never going to get. And I’ve

heard some of the vendors are now insisting on cash up front for

services.’



Red Bank-based Wall Street Communications rounded out this year’s list

of top New Jersey agencies. While the smallest on the list, it

experienced the largest statistical growth, a 153% jump from a little

over dollars 50,000 in 1998 to a bit over dollars 128,528 in 1999.



What will the future hold for New Jersey PR? Perhaps the time is right

for New Jersey agencies to bring home more of the business.



SILICON TURNPIKE: NEW JERSEY PR AGENCIES


Ranking  Agency Name                Audit    NJ income (dollars)  Growth

99  98                                           1999        1998    (%)

1   1    The MWW Group*                 X   6,252,346   9,200,519    -32

2   2    MCS                            Y   3,058,446   2,570,197     19

3   3    Star/Rosen                     Y   1,299,800   1,066,000     22

4   7    Torre Lazur/Weber**            Z   1,139,608     470,000    142

5   N/A  Anne Klein & Associates        Z     952,365         N/A    N/A

6   5    The Stephenson Group           Z     776,685     832,258     -7

7   4    Danlee Public Relations        Z     715,993     896,000    -20

8   6    Berry Associates               Z     683,371     670,000      2

9   N/A  Spring O’Brien                 Y     290,000         N/A    N/A

10  N/A  Ribotsky Worldwide             Z     191,985         N/A    N/A

11  8    Wall Street Communications     Y     128,529      50,847    153

         Totals                            14,054,778  15,755,821    -11


                                      US income          US income

Ranking  Agency Name                  (dollars)   NJ%    (dollars)   NJ%

99  98                                     1999    99         1998    98

1   1    The MWW Group*              27,002,400    23   17,220,267    53

2   2    MCS                          3,058,446   100    2,570,197   100

3   3    Star/Rosen                   1,299,800   100    1,066,000   100

4   7    Torre Lazur/Weber**         76,760,938     1   57,866,543     1

5   N/A  Anne Klein & Associates        952,365   100          N/A   N/A

6   5    The Stephenson Group         1,465,442    53    1,387,097    60

7   4    Danlee Public Relations        715,993   100    1,200,000    75

8   6    Berry Associates               683,371   100      670,000   100

9   N/A  Spring O’Brien               2,261,000    13    1,693,000   N/A

10  N/A  Ribotsky Worldwide             191,985   100          N/A   N/A

11  8    Wall Street Communications     527,126    24      305,082    17

         Totals                     111,513,516    13   82,285,186    19


Ranking  Agency Name                    Location

99  98

1   1    The MWW Group*                 East Rutherford

2   2    MCS                            Summit

3   3    Star/Rosen                     Cherry Hill

4   7    Torre Lazur/Weber**            Parsippany

5   N/A  Anne Klein & Associates        Marlton

6   5    The Stephenson Group           Califon

7   4    Danlee Public Relations        Red Bank

8   6    Berry Associates               Morristown

9   N/A  Spring O’Brien                 Morristown

10  N/A  Ribotsky Worldwide             Somerset

11  8    Wall Street Communications     Red Bank

         Totals

*1998 includes New York office income **called Torre Lazur PR as of Jan.

1, 2000

Source: PRWeek 2000 Agency Rankings

Auditing: X denotes a full audit or review; Y compilation audit; Z

unaudited statements approved by either the CFO or CEO/partner. A random

audit process will be used for agencies providing unaudited figures.



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