REGIONAL FOCUS: The road to recovery

As the Northwest recovers, the migration of talent there bodes well for a brighter future.

As the Northwest recovers, the migration of talent there bodes well for a brighter future.

The Northwest has certainly seen sunnier days. "The economy is still bad," asserts Katie Kemp, an EVP in Waggener Edstrom's Portland, OR office. And she's not sugarcoating it. While the US unemployment rate hovers around 6.1%, Oregon's is a national high of 8.1%, while Washington is at 7.5% and Idaho is a healthier 5.7%. But to hear some in the PR community talk about it, they're well ahead of the recovery. "We really haven't been affected by the economy," adds Kemp. "We're seeing more business from local companies who are putting out RFPs." "The interesting thing is in the Northwest, the economy has bottomed out, and we are climbing out like the rest of the country," says Jean Armstrong, a partner at tech agency Armstrong Kendall, in Beaverton, OR. "Most of the unemployment is in the manufacturing area. And most of our clients were in Silicon Valley. But we're seeing more growth here. Firms are doing the same thing here that they are doing everywhere. They've stopped sitting around and wringing their hands." Which is not to say that the local PR community has emerged unscathed. Smaller budgets and staffs are the norm. But so is growth. And those budgets and head counts aren't as small as they used to be. Kemp attributes that growth to businesses realizing they need to keep in touch with all stakeholders, regardless of the economy. And in the overall marketing mix, PR dollars go a lot further than ad dollars. "We've been pretty fortunate that, despite the economy, our business continues to grow," says Anthony Sprauve, VP of worldwide public affairs for Starbucks, in Seattle. "We are an affordable luxury. By virtue of that, PR has continued to be strong. Budgets are consistent. Staff is consistent. We still have to do PR to get information out about the company and products and earnings. There are still plenty of things we need to talk about. "As we become a bigger-profile organization, we are concerned with our reputation globally," Sprauve explains. "So a lot of our PR activities going forward will be focused on the things we are doing in the community, and the things we are doing in countries where we purchase coffee." Still in recovery mode But not everyone is ready to say the Northwest is out of the woods yet. Lisa Amore, a former director of PR at RealNetworks in Seattle, who just left to become senior director of PR at RGB Labs, explains that budgets are still tight, and the majority of RealNetworks' PR is being handled in-house, with agencies being used more for project work. "Our internal staff was smaller than it used to be," adds Amore. "At the height of the bubble, we had 12 people in-house. Now we have five. We had done a bit of hiring recently. I interviewed at least 30 people to fill one position here, and I had a hard time finding someone of a certain caliber who knew the industry." Over in Idaho, Scott Peyron says the downturn has hit the region later than the rest of the country, as it's not as urban as other parts of the Northwest. "Historically, downturns have always hit this area a bit later," says Peyron, principal of Scott Peyron & Associates, in Boise. "But there's a still a multitude of reasons to be optimistic. There's lots of new-business activity and corporate spending. We're seeing clients inside and outside of Boise. But the budgets here are 20% to 25% smaller than in a more urban market." And while the downturn has led to a "dearth of new PR initiatives," Peyron says his business has picked up some work thanks to companies' newfound interest in corporate responsibility, due to recent corporate scandals. "The economy has certainly affected our budget," says Danielle Killpack, director of public affairs for Albertsons' intermountain and Northwest divisions. "So we try to run as efficiently as possible. We've actually grown our team internally, as we're trying to rely less on agencies." In the past couple years, Albertsons has decentralized its PR operations from its Boise headquarters. It now has PR staff spread across the country. Killpack says this has helped the company do a better job communicating. "We now have people in every state," she says. "Hopefully, that shows people that the relationships you build with the media and consumer can't be done alone from one place. It takes having people on the ground." Steve Bryant, Publicis Dialog COO and president of the Seattle office, has watched clients' budgets grow and become more flexible. "Companies are trying to move quickly again, whether it's getting a product to market or responding to a problem or opportunity, and you just can't move fast enough with advertising," says Bryant, who has seen growth in food and healthcare. "Companies are looking to make an impact. Programs are being justified differently. Before, a program may have been justified by media impressions. Now we're getting credit for getting a product into the stores." Larger firms such as Publicis Dialog are protected by larger clients that have national reach, says Bryant. "If you're just depending on local clients, you probably had a bad year," he adds. Wendy Lane, president of Lane Marketing in Portland, says she has seen the market tighten for clients and budgets. Even successful companies that understand the need to communicate have tightened their belts. Growth in the past year has come from consumer companies and the government, although Lane says she is seeing interest from tech and b-to-b firms as well. Trouble in Oregon What's hurting the economy in Oregon is the lack of tax revenue. The state has no sales tax and a low property tax, says Lee Weinstein, Nike's director of corporate responsibility communications. The state relies on income tax, so the high unemployment is taking its toll. "We've tried to become more involved in the community," says Weinstein. "We have a lot of employees, and they have children in the local schools. So we've donated money to local efforts to raise money for the schools." But despite the economy and unemployment, others hope that PR's ability to forge ahead will continue. "We're on plan for some solid growth for the next year," asserts Patrick McGuire, EVP and GM of Edelman's Seattle office. "I'm optimistic. We're seeing early signs of life in technology, bioscience and traditional retail. People are investing in their homes, and in things that make their lives better. They're trying to simplify their lives, while wanting to live more meaningful lives. And I think that's where we're seeing growth - in retail, real estate, and home and garden. "We're not going to see the largess of the late 1990s," McGuire adds. "But I think we'll see an increase in spending in the next 12 months." ----- An Olympic-size talent pool Perhaps the upside of high unemployment is that employers have their veritable pick of talent. And unlike the Bay Area, where many agency and in-house PR heads bemoan a talent pool that is a mile wide and an inch deep, there are apparently many excellent, very talented people looking for PR work in the Northwest. "The quality of the talent pool is very strong," says Nike's Weinstein. "What's nice about Oregon is we have a quality of life people desire. People are still moving here even though there aren't jobs. So the talent pool in the PR industry continues to be strong." "Historically, we've hired one or two people a year, and we have to make some very tough choices," adds Starbucks' Sprauve. "This is a great place to live. It attracts a great talent pool." But it isn't always that easy to find good people. Publicis Dialog's Bryant says the pool wasn't as big as he expected it to be. And Amore asserts that she had a hard time finding someone of a particular skill level who knew RealNetworks and its market. Kemp explains that it's harder to find younger talent in Oregon, as more junior-level staff apparently favor Seattle over Portland. "You get a younger mix in Seattle," she says. "In Portland, we get the more mature professionals." Idaho's talent pool seems to be a mixed bag. At Albertsons, Killpack says she has no problem finding "exceptional, incredibly well-qualified people." But on the agency side, Peyron rates the talent pool as merely "good," since the Boise market is not a huge hub of PR activity, and thus doesn't attract people as Portland and Seattle do. Despite the tough economy, quality of life is key to attracting talent. Perhaps the Bay Area's great but unemployed PR people left due to the high cost of living. But that doesn't seem to be the problem for the more affordable Northwest. "We have a great deal of talented people to pick from," says Lane. "People still want to move here. It's a wonderful place to be."

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