REGIONAL FOCUS: Desert rainmakers

As clients once again channel money into PR, local agencies are enjoying an upturn. A sunny mood is prevailing among PR agency executives in the desert Southwest as recessionary clouds lift to reveal plentiful new-business opportunities.

As clients once again channel money into PR, local agencies are enjoying an upturn. A sunny mood is prevailing among PR agency executives in the desert Southwest as recessionary clouds lift to reveal plentiful new-business opportunities.

Explosive population growth kept staple industries like real estate, utilities, and healthcare strong in Arizona, Nevada, and Utah during the bust, while government public affairs remained steady in New Mexico. More recently, other businesses have returned to the PR fold, executives report. "PR money must've been released by congressional order or something last fall," jokes Dale Erquiaga, VP of brand services for R&R Partners in Las Vegas. A few well-known corporations call the desert Southwest home, but PR agency leaders often lament the relative scarcity of company headquarters. Changes at two of the region's largest companies moved top decision-making power elsewhere in the past year. Dial in Scottsdale merged with Germany's Henkel, and Salt Lake City's Novell moved its headquarters to Waltham, MA. Kevan Barney, Novell's senior PR manager, describes the move as a "paper change" that won't affect its Utah operations. Profitable midsize companies, however, buoy PR hopes. "Since I've been working in this region, I keep running across these half-billion-dollar companies who have just been kind of flying under the radar, and they're making money," says Terresa Christenson, Brodeur's Western region GM, citing Scottsdale, AZ-based eFunds as an example. One of the Southwest's hottest companies is Cold Stone Creamery, a specialty ice-cream chain that has more than quadrupled in size since 2000. Cold Stone ended its relationship with Golin/Harris International in January, opting to hire four regional firms, including R&R Partners, which has offices in Phoenix, Salt Lake City, Reno, Washington, DC, and Las Vegas. Agency leaders also welcome prodigal clients. "We're getting calls from clients we talked to two or three years ago," observes Chris Thomas, co-owner of the Intrepid Group in Salt Lake City. In Phoenix, Mullen PR president Debbie Mitchell says entrepreneurs who sold successful businesses a few years ago are returning for PR help with new ventures. For example, a real-estate developer who completed one housing development recently called on Mullen for help with a new addition. While PR people love to tout the strengths of their discipline over advertising, ad and integrated agencies in the Southwest also recognize PR's value. Phoenix ad agency McMurry, for example, hired Katherine de Tristan several months ago to build a PR unit. "It's easier to sell a client on PR than on millions of dollars in advertising," says de Tristan, who expects the firm's PR revenues to reach $750,000 this year. Other integrated agencies report PR growth, as well. "The number of staff has doubled over the past year or two, and our agency has taken a very strong focus on PR," says Curtis Steinhoff, executive director of PR for Riester-Robb, a Phoenix-based integrated firm. "We're seeing media dollars coming down and PR dollars going up," says David Anderson, managing partner of Phoenix's Off Madison Avenue, adding that traditional advertising clients expect a lot from PR in the way of ROI and bottom-line impact. While such trends surface throughout the desert Southwest and beyond, each market within the region boasts its own unique characteristics. Arizona Phoenix is hands-down the most active PR market in the region, with several healthy homegrown agencies. Brodeur is the dominant national firm, while APCO has a small office in Scottsdale. "Phoenix continues to be Boomville, USA," says Jason Rose, president of Rose & Allyn. "The economy here is very good. Most people seem to be getting their share of it." Prominent Phoenix-area companies include PETsMART and America West, while value-added technology component distributor Avnet remains the region's largest. Served by Brodeur, Avnet had its PR ups and downs over the past year. Two of its top industry trades went under, but PR execs seem giddy about the recent publication of two books positively featuring the company. Meanwhile, America West hired a new corporate communications VP in September after Jim Sabourin moved out of state. Elise Eberwein joined the firm from Frontier Airlines and is working to boost internal communications. Education also is big in Arizona, home to DeVry University, the University of Phoenix, and Thunderbird American Graduate School of International Management, three of the nation's largest for-profit business schools that offer courses online and at hundreds of campuses around the US. CKPR won the University of Phoenix's PR account earlier this year, while BJ Communications serves Thunderbird. Mullen assisted DeVry in opening its first Las Vegas campus, which illustrates Mitchell's observation that local PR firms benefit when their clients expand. "Phoenix is becoming more of a hub for regional business," she says. Public education has been keeping public affairs firm Rose & Allyn busy. Owned by Fleishman-Hillard, Rose & Allyn is working with the larger firm on the Alliance for School Choice, a bipartisan national charter-school initiative led by Phoenix attorney Clint Bolick. Nevada "I think there are almost two Las Vegases," Mitchell observes. There's the gambling and entertainment Mecca, and then there's the booming residential community. Homegrown firms dominate the PR landscape. Although no national agencies maintain offices there, a few serve casino clients from elsewhere. "The gaming industry can be hard for outsiders to come in and get their arms around," says Dave Kirvin, partner in Kirvin Doak Communications. His firm serves several MGM properties and signed popular animal-trainer act Siegfried & Roy last year, shortly before a tiger mauled Roy Horn. Advertising traditionally dominated marketing in Las Vegas, but Erquiaga says PR now plays a bigger role. "The past six months make me feel like clients are getting it," he says. R&R Partners helped make the city's tagline, "What happens here, stays here," a national catch phrase. "This is one of the most competitive overall marketing cities that you will find anywhere," Kirvin says. "Competition for tourist spending is brutal, and anybody who is engaged in that business has to be practicing all facets of marketing at as high a level as possible." New Mexico Government installations and energy concerns dominate the PR landscape in New Mexico, and Doug Turner, president of DW Turner Strategic Communications, sees opportunities in publicizing domestic security and anti-terrorism activities in the state. While much of the state's PR happens at government labs and military bases, private or quasi-governmental entities run some of those installations and seem to be applying more corporate communication practices. At Los Alamos National Laboratory, which is operated by the University of California, the PA department recently reassigned its once-centralized staff to the lab's seven "directorates," or divisions. It took that step to get out the good news about Los Alamos, which had been plagued by allegations of poor business practices. "Once the bad news starts to roll, it's kind of hard to turn it around, but we've managed to do that," says Kevin Roark, media relations team leader, adding that improved information flow made an immediate impact on PA operations. And at Sandia National Laboratories in Albuquerque, run by Lockheed Martin, a risk-management review led to PA improvements, says Rod Geer, senior public affairs administrator. New Mexico PRSA members critiqued the installation's publications, for example. At Kirtland Air Force Base, which houses Sandia and other government programs, Air Force PAOs have been rotating through deployments in the Middle East. Call volume and subject matter haven't changed much since the Iraqi invasion, except for inquiries about New Mexicans killed overseas. Only one person deployed from Kirtland has died in combat, says 1st Lt. Kelley Jeter. The private sector in Albuquerque, meanwhile, is gearing up for a much happier occasion. Communication planning is under way for Albuquerque's tricentennial. Festivities will run from April 2005 until the anniversary a year later. "We see this as an opportunity to really put Albuquerque on the map as a destination and to really brand Albuquerque," says Tania Armenta, VP of tourism and communications for the Albuquerque Convention and Visitor's Bureau. Utah The recession came late to Utah, thanks to the 2002 Winter Olympics. Salt Lake's technology startups, however, were hit hard and early. Entrepreneurial businesses also were among the first to bounce back, says Neil Myers, president of Provo, UT-based Connect PR. Computer networking company Novell, one of the state's biggest corporations, shifted its focus over the past year by acquiring two Linux companies - Ximian and SUSE Linux. Novell gained from SUSE a few PR staffers and an agency relationship with Burson-Marsteller, Barney says. The Church of Jesus Christ of the Latter Day Saints spreads its agency work among various firms. The highly publicized kidnapping of Elizabeth Smart created communications challenges for the church but positively showcased members who helped search for the teen. "I think it's an ongoing challenge for the LDS church as it has to deal with issues related to polygamy and to these rogue groups that are not affiliated with the LDS church," says Thomas, who represented Smart's family during the ordeal. Integrated firm Richter 7 is gearing up for a new account from the Utah Division of Business and Economic Development, which is mounting a new push to attract business to the state, says Richter 7 partner Tim Brown.

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