New Jersey and Pennsylvania: Healthy growth

Healthcare is thriving in the corridor between NY and Chicago.

Healthcare is thriving in the corridor between NY and Chicago.

New Jersey and Pennsylvania are intimately linked states that share common corporate cultures and influences. Encompassing some of the most important corporate real estate between New York City and Chicago, both states are home to a slew of PR firms that believe they can compete with their peers on the national stage.

Healthcare, pharmaceuticals, and biotech make up the foundation upon which both depend. Home to world-class universities, research hospitals, and multinational corporations, the area is fertile ground for all elements of the life-sciences industry, and the trend shows no sign of letting up soon. The surplus of healthcare clients means that New Jersey and Pennsylvania are also home to some of the most expert specialized healthcare PR agencies in the country.

The PR agency landscape

New Jersey's reputation has come a long way since the days when it was mainly considered a good place for building chemical plants. Mike Cherenson, VP of PR at The Cherenson Group in Livingston, says the economic outlook for his and other agencies is strong. "Last year we gained momentum, and this year we're making new strides and continuing to grow. And from what I hear from other PR firms across the state, that pattern's holding true for many firms," he says.

Cherenson says that healthcare continues to anchor many agencies in the market. But he also names travel and tourism, real estate, and finance as areas in which state PR firms are experiencing growth. "It's not just a healthcare community any more," he says. "It's growing into other things."

The healthcare industry operates with some degree of insulation from national macroeconomic trends. Its core business is a need more than a luxury, and, thus, corporations can buffer themselves somewhat from the whims of the consumer. But firms that specialize in a particular niche or service may find themselves more susceptible to economic ups and downs than general-service firms. At B&Y Communications, a Montclair, NJ-based agency that focuses on community relations and reputation management work for healthcare and medical clients, the uptick in business over the past year does not mean it can sit on its haunches and expect it to continue. "Community outreach, community relations, talking about the good work that companies do - it's going to fluctuate with the fortunes of the company," says president and cofounder Susan Youdovin. "Very often, it's cut pretty early on."

Despite that, agencies like B&Y - which has been around for 20 years - find that the New Jersey market's deep roots in healthcare allow them to weather most economic fluctuations. Youdovin credits state heavyweights like Johnson & Johnson and Merck with drawing business to the region. "It's historic," she explains. "The more companies that begin to locate here, the greater the work force and the better the labor pool. It becomes a specialty."

To the west, Pennsylvania's healthcare market flourishes, as well. Powerhouse agencies are making the case that Philadelphia is to healthcare PR what New York is to finance or LA is to entertainment. Nancy Long, president of Dorland Global PR, one of the state's most prominent agencies in the field, calls the healthcare business "robust" and says, "We [and other healthcare agencies have] grown disproportionately well - overindexed against our generalist colleagues." She points out that nearly every major pharma company in the world has either its headquarters or major offices in the tri-state area of Pennsylvania, New Jersey, and Delaware, employing nearly half a million people in the region and generating billions of dollars in economic growth.

Independent agencies rule the Pennsylvania market, although a smattering of major holding company firms maintain a presence.

Vox Medica, another major independent healthcare agency in the area, competes mainly against top five New York firms, says president Eve Dryer. One reason for the even playing field might be the increasingly equal distribution of talent; both Dorland and Vox Medica draw many of their hires from large New York or Chicago firms.

"It's quality of life, but it's also quality of work [that attracts talent]," says Dryer. "The fact that we continue to land some very significant ... assignments is very important to the people we've been hearing from."

Because healthcare is such a heavily regulated business, and sometimes a political football, agencies like Vox Medica are experiencing growth in public affairs work for pharma and biotech companies. Dryer says corporations are turning to Pennsylvania firms that "cut their teeth" on state-level public affairs campaigns for new national work related to Medicare, reimbursement, and generic drug regulations.

Harrisburg, PA-based Sacunas Stoessel, which serves mostly regional clients, is "having a banner year," says president and CEO Nancy Sacunas. "What I see happening is an awful lot of requests and needs for international communication and expansion," she says.

Pittsburgh tends to draw less healthcare business than Philadelphia and the rest of the eastern part of the state. Burson-Marsteller, Euro RSCG Magnet, and Ketchum all maintain a Pittsburgh presence, helping to bolster their Midwest offerings.

"If your strategy is to just pull business from the immediate area, it's tough to do that when you're a large firm," says Kelley Skoloda, who heads Ketchum's Pittsburgh office. "But if you're able to go after national and international companies that are based here, or if your client base is much broader like ours is, then it's a very nice way to work it."

Jack Horner, president of Jack Horner Communications, a Pittsburgh independent firm, says that his formula for success has been to not become oversize, keep a balanced roster of clients, and work hard to attract premier Western Pennsylvania companies. "There's a real opening for a strong generalist firm in the marketplace, which is why we're doing it," Horner says.

The corporate picture

In-house corporate communications leaders say that PR talent is a factor that companies consider when choosing a location, and they note that the opportunity for expansion still exists.

Centocor, a biotech company with headquarters in Horsham, PA, was drawn to the area for the easy access it offers to human resources. "You've got this extraordinary talent pool here ... that we can all tap into," says Ron Schmid, Centocor's VP of PR. Centocor works with Philadelphia-based PR agencies, as well as larger outside firms.

New Jersey-based Schering-Plough (SP) works with several in-state agencies, but also travels to Chicago and New York for expertise, but not by choice. "It just blows my mind that there aren't more pharmaceutical PR agencies in New Jersey," says Jeff Winton, group VP of global communications. "I think it's a huge missed opportunity."

Winton has hired much of his internal talent from industries other than pharma, a conscious decision to broaden the team's focus. Portions of SP's PR business are held by major firms like MS&L and Edelman; others go to New Jersey firms like B&Y (for community relations) and MCS, which won a major international product pitch.

"They were up against some of the big multinational firms, and, ultimately, they convinced us that they were the right partner," says Winton. "You don't always need the big multinational agencies, as long as you have the small one that has the expertise and connections in some of these markets [overseas]."

Celgene, another New Jersey pharma company, moved its most important account to a global agency. the company until recently handled the bulk of its corporate communications in-house, but hired Weber Shandwick several months ago in preparation for the launch of a new blood cancer drug. Celgene uses smaller regional agencies on a project basis.

But the future of pharma and biotech PR in New Jersey and Pennsylvania may lie in the realm of corporate reputation as the industry grows ever more embattled. "The entire pharma and biotech industry has taken some hits, rightly or wrongly," Gill says. "Strategically, it's important for us to make sure that the corporate reputation, as well as the product reputation, go hand in hand and are inextricably linked."

The local media

New Jersey's largest paper is The (Newark) Star-Ledger, which covers the entire state. But New Jersey's central location ensures that local PR firms work with outlets from other areas just as much as they do with local ones.

"The New York Times and The Philadelphia Inquirer carry a lot of weight and are certainly influential in the marketplace," says Cherenson. "And TV we share with the New York and Philadelphia markets."

The Inquirer is the most prestigious paper in Pennsylvania and draws corresponding attention from area PR pros. Philadelphia also boasts six network TV stations and a PBS station that all cover much of the eastern part of the state. Area agencies with specialized medical clients, though, say that they concentrate more on health-trade publications than regional media.

Pittsburgh-area clients focus on the city's two major papers, the Post-Gazette (the leading outlet) and the Tribune-Review. But, Horner adds, "Our Pittsburgh Business Times is a critical outlet. ...Our weekly business journal really holds the business news."

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