The middle ground

In the heartland, corporate defections haven't hurt the PR scene.

In the heartland, corporate defections haven't hurt the PR scene.

The St. Louis and Kansas City, MO, metropolitan regions - and other population centers in the heartland - tend to lag behind the front edge of the nation's business curves. When boom times hit the US economy, companies in the region often see their fortunes rise, but perhaps not as dramatically as their counterparts on the coasts. When the economy goes into a slump, the middle of the country typically doesn't feel the magnitude of the economic shocks.

"We don't experience many spikes up or down that some of the other areas of the country might experience," says Mike Swenson, president of Barkley Evergreen & Partners in Kansas City. "Overall, things are on the uptick here."

The relative stability of the region's business community generally translates into PR pros and communications execs worrying less about job security and focusing more on offering first-rate communications advice and support.

"The job market in Missouri is the most competitive it has been since the economic boom of the late '90s," notes Susan Veidt, SVP and GM of Fleishman-Hillard in its St. Louis headquarters. "Corporate hiring is brisk, not- for-profit and academic institutions are expanding their communications functions, and boutique agencies are becoming more firmly established and are growing."

Yet a fair amount of uncertainty still surrounds business activity in St. Louis in the wake of several rounds of layoffs in the early part of the decade among the airlines and other sectors. Consolidation of operations resulting from the merger of St. Louis-based May Department Stores with Federated Department Stores - a deal that is expected to close by the end of this year - is likely to diminish May's presence in the region.

Across the state, PR agencies have noticed some corporate volatility, particularly with the merger of Kansas City-based Sprint with Virginia-based Nextel, which could result in some swapping of jobs between the two locations, as well as spin-offs of some Sprint divisions. The Chapter 11 bankruptcy filing of Interstate Bakeries, maker of such brands as Wonder Bread and Hostess Twinkies, also has local officials speculating about the future of the company's operations in Kansas City.

The agency business

For agencies in St. Louis and Kansas City, the central location makes them accessible to clients not only in the Midwest, but across the country. St. Louis-based Fleishman, for example, has "a global client base that can weather ups and downs within the region or specific industry sectors," Veidt says. "St. Louis may seem an unlikely place to serve a client based on either coast or internationally. But experience and capabilities frequently trump geography."

Executives with smaller agencies in the region agree that companies across the country are increasingly selecting PR firms in Missouri that have established reputations for doing high-quality work. "Regardless of whether it's a company in New York, Chicago, or Los Angeles, I think they're going to be more inclined to listen if you have experience in a market segment that's relevant to their business," says Sean Wheeler, VP of Boasberg\Wheeler Communications in Kansas City.

Because of a reasonable cost of living, Fleishman and other agencies in the region say they can do work more economically than agencies in higher-priced markets. "It's a fact that the cost of business in St. Louis is lower than it is in other parts of the United States," says Mary Scholz Barber, partner with St. Louis-based Kupper Parker Communications (KPC), the largest independent agency in Missouri.

The healthcare and biotech industries have remained strong players in the region. Public education has become a big piece of almost any healthcare organization's strategy, Barber says. "That really helped to sustain our practice, even as other industries declined a little bit," she adds, noting her company's work with such firms as Pfizer and QualiLife Pharmaceuticals.

In Kansas City, the city is undergoing an urban resurgence, led by H&R Block's building of a new corporate headquarters downtown. "We've got a really strong group of 15 to 20 small to midsize PR firms in the Kansas City region. There's a lot of business to go around, and we all have our share of it."

The corporate story

After seeing the number of corporate headquarters decline in recent years, St. Louis still remains home to many top companies, such as Anheuser-Busch and Emerson Electric.

Peabody Energy, which appeared on the Fortune 500 list for the first time this year, has grown into one of the top five companies in St. Louis, based on market capitalization. With a presence in the city for more than five decades, Peabody "recognized the need to have an increased local presence, and we have been responding on that front," explains Vic Svec, the company's VP of public and investor relations.

The company is developing one of the largest capital projects in the St. Louis area - the $2 billion Prairie State Energy Campus, which will be located about 50 miles from St. Louis in southern Illinois. Given the likelihood of opposition to the large, coal-fired power plant, Peabody launched communications efforts on several fronts to inform the public about its mission at the Prairie State facility.

The company conducted a poll to determine which communications strategies would be most effective in gaining local support for the project. Peabody found that 80% of residents supported the project. "Not only did the poll provide us with good feedback as we developed the messaging and communications, it became part of the message, which was extra bang for the buck from what was otherwise back-shop polling data," Svec says.

Nevertheless, a form of prairie populism and skepticism is still rooted in the region. In the post-Enron environment, people generally don't welcome million-dollar salaries, says Al Butkus, VP of corporate communications for Aquila in Kansas City. "Huge salaries paid to senior executives are not viewed as a good thing," he says.

Aquila has been undergoing a transformation in recent years as it has sold many of its assets in order to pay off debt and sustain a business operation in Kansas City. Five years ago, the company was ranked one of the top 50 in the country, but now it doesn't show up on any lists.

"The media do occasionally mention that we were once like Enron," Butkus says. "We're constantly dealing with scars from the past. It's all public. We don't try to hide it."

But these days, Aquila's rebuilding efforts are likely to get overlooked. With the likes of thriving companies, such as Yellow Freight, Applebee's, American Century Investments, Hallmark, and Black & Veatch, based in the Kansas City area, "there's plenty of competition for news space," Butkus says. "As a result, it's a good market for media and PR people."

The media environment

As in most cities, print journalists in Missouri's major markets are the best conduits for companies seeking to reach the public through the media. The St. Louis Post-Dispatch and The Kansas City Star are well respected daily newspapers. The two cities have their own Business Journal, published by American City Business Journals, which provides comprehensive coverage of the local business community.

Local news coverage of Peabody's Prairie State energy project, for example, has been fair, although the project has "suffered through dogged and not always factually correct editorials" by the Post-Dispatch, Svec says.

In its work with local media, KPC has sometimes used crafty measures to raise awareness of its clients' activities. Earlier this year, KPC was struggling to convince the Post-Dispatch to cover the "Get Hooked on Health Expo," an event sponsored by Charter Communications. Going into the campaign, both KPC and Charter recognized that one of the obstacles would be getting media outlets to cover an event sponsored by another communications company.

KPC decided to pitch the article to the local Associated Press bureau, which wrote a story that got picked up by The Kansas City Star. Because other news outlets were covering the expo, the Post-Dispatch finally decided to publish a story the weekend of the event.

Because the broadcast media in Kansas City do not provide much in-depth coverage of the local business community, Aquila has opted to use local PR firms, such as Parris Communications, to help keep community leaders in the region apprised of the company's endeavors. "Their expertise is in networking and building relationships with community business leaders and some of the political leaders," Butkus says.

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