Local agencies are struggling to attract larger local clients.The past few years of economic doom and gloom have done nothing to erode the optimism of Steve Rosen, president of Star/Rosen PR, a Cherry Hill, NJ-based firm. Boasting new or expanded relationships with clients like SunGard and Atofina Chemicals and a high ranking in the Philadelphia Business Journal's survey of PR agencies, he's cheery about his firm's prospects. "This has been the best year in our history," Rosen says. "We're pitching more business now than ever." Rosen is not alone in his enthusiasm. An informal survey of PR executives in New Jersey and Pennsylvania, a diverse swath of territory that reaches from the urban stretches outside New York City, through Philadelphia and its suburban outreaches, into Pittsburgh's rural surroundings, largely yielded a common refrain of guarded optimism. As their rationale for the improving mood, many agencies point to account wins or growing relationships with existing clients (typically local and regional companies and often far-from-household brands), and are reporting small staff increases. There is a whiff of recovery in the air in these areas that, for their large populations and economic might, are often overshadowed by New York and Washington, DC. "The market's healthy, and I think it's getting healthier," says Scott Tattar, president-elect of the Philadelphia chapter of the PRSA and president of Tattar Richards-DBC. "I've seen not so much a wave of new business, but a longer-term commitment on the part of clients who have come to appreciate what the agency was able to bring to them in their time of tough economic stress. The payoff for having been there for these companies is starting to reap its rewards for agencies that went that route and reduced a fee here and there because that's what you do in a business partnership." Changes in Philadelphia It's an understatement to say that Philadelphia is obsessed with history. Though it has its trendy neighborhoods, it's impossible to walk its streets and not become steeped in a heritage that goes back to the nation's founding. Its PR community has a history that's stronger than many because of its relationship to a strong local advertising industry. But in recent years this history has hit a turning point. Some old-line firms, like Earle Palmer Brown and Elkman/Alexander & Partners have closed, and one that's still doing business, Tierney Communications, has experienced major changes that include senior staff departures. Tierney, as general manager Steve Albertini says, "is still the strongest agency in the market," a sentiment with which many others agree. But the ranks beneath the powerhouse have shifted, with many newer and smaller agencies gaining ground. For Rosen, this is nothing less than a shift in the agency landscape that "will allow new PR firms to emerge and take new leadership positions." These opportunities are available in a host of areas, from travel and tourism to healthcare to technology and b-to-b. But part of the trick in tapping into this is keeping the City of Brotherly Love's biggest companies from looking to the large national agencies for PR support. "They snub Philadelphia agencies," says Peter Van Allen, who writes the Philadelphia Business Journal's marketing column, of the city's national companies. "It's a big issue." Unisys, though based outside Philadelphia, doesn't work with local firms. Comcast, headquartered in the city, uses Ketchum's New York office as its corporate AOR, while relying on Philadelphia agencies for local project work, according to David Shane, VP of PR for the cable giant's Eastern division. He says the company has bulked up its in-house corporate communications efforts in recent years. "The issues are very complex," he says. "There's a high learning curve with cable." Moreover, several local PR pros say they've noticed that during tough economic times, Philadelphia business has drawn the interest of outsiders from New York and Washington, DC. Says Tierney's Albertini, "These firms bring a cachet, and often act as a sort of tie-breaker [in competitive pitches]." Exceptions to this include the few agencies that have carved out a niche within the healthcare sector. The largest of these, fast-growing Dorland Public Relations, regularly pitches pharmaceutical companies. Yet in speaking about the overall climate in the local market, Dorland president Nancy Bacher Long says, "The challenge is to get Philadelphia-based companies to hire Philadelphia-based agencies." Close-knit PR community More than many other places, Philadelphia PR pros talk about how close-knit the community is, in large part because of an active PRSA chapter and the Philadelphia Public Relations Association. With a respected PR department, Temple University, too, is a big player in this. "Most people know each other in the community," says Jeff Guaracino, regional communications director of the Greater Philadelphia Tourism Marketing Corporation. "There are networking events and plenty of opportunities to meet other people. It is a collaborative spirit." "There is a colloquial nuance to Philadelphia that I don't believe exists anywhere else," Tattar agrees. This comes through in many of Philadelphia's tourism efforts, an area where the city has thrived in recent years, drawing both international and national visitors. It's also one area helped by the city's proximity to New York. Danielle Cohn, spokesperson for the Philadelphia Convention and Visitors Bureau, explains that many visitors to the Big Apple make side trips to Philadelphia. "We thank them every day that they're there," she says. Though it doesn't have the tourism draw that Philadelphia does, Pittsburgh has a diverse economy that supports a range of independent firms and a couple offices of global agencies, though the dot-com bust was especially hard on the tech PR firms. "Pittsburgh is a microcosm of the world economy," says Jack Horner, president of Jack Horner Communications, whose clients include Heinz. "It's not dominated by one sector. And the people who do business in Pittsburgh hire local agencies." Ketchum's Pittsburgh office, through attrition and layoffs, has 10 people fewer than this time last year. But partner Jerry Thompson says the office has retained its local blue-chip client base. "The agency community has been very stable. None of the leading shops have closed, and that's a good sign." PR pros say that Pittsburgh and Philadelphia might as well be in different states. "Pittsburgh is about as close to Philly, from a business standpoint, as LA is," says Tattar. "I'm as likely to compete with Pittsburgh for business as any other city in the country." One agency that has managed to span the state is the Harrisburg, PA-based Neiman Group, which has clients ranging from Edison Schools in Philadelphia to Lancaster, PA-based Fulton Bank. Steven Neiman, partner and CEO, says his agency has been able to do this because it has taken advantage of big-city talent it lured in. "We've spent the time and energy on our people," he says. "We're not a Harrisburg agency. We're an agency that's based in Harrisburg. That's a different mindset." Benefitting from proximity A similar sentiment is echoed throughout New Jersey. Though much maligned for its environmental problems, urban decay, and suburban sprawl, the state is home to a long list of large corporations seeking to avoid Manhattan's costs while still benefiting from its proximity. The state's PR firms take the same tack, and in sharp contrast to most firms in the Pittsburgh and Philadelphia regions, consider themselves agencies that just happen to be in New Jersey. "I don't feel like we're a New Jersey agency," says Tom Coyne, president and CEO of Coyne Public Relations, pointing to how close his agency is to New York City and the fact that it draws from the same talent pool. "But we're not paying to be in Manhattan." For all its perception problems, New Jersey has much business to offer. "Pharma is a huge growth area, but across the board, New Jersey's been able to hold on to fantastic companies," Coyne says. "There is a wealth of marketing opportunities in the state." Other firms have also been successful in gaining clients from outside the state. "We've seen a significant uptick in interest among national clients in hiring a New Jersey agency," says Ernie Landante, director of operations at Winning Strategies Public Relations. "The Spinal Muscular Atrophy Foundation and the Mideast News Service, our newer clients, demonstrate that while we're located in New Jersey, our work is recognized nationwide." Unlike Philadelphia, New Jersey's agency scene hasn't changed much throughout the rough times, says Michael Kempner, president and CEO of the state's largest firm, The MWW Group. "The trend is that there are a lot of high-quality firms, but they're for, the most part, niche players," he says. Both Kempner and Coyne join in the common feeling throughout the region that business is beginning to look up. "There was a two-year period where people didn't know where to look," Coyne says. "Now there's definitely an air of optimism." ----- Philadelphia: Stuck in the middle Located about 90 miles from New York, the center of the media world, and 150 miles from Washington, DC, the center of US political life, Philadelphia is caught between two worlds. Though one of the largest media markets in the nation, it's a place where no global agency has been able to gain a foothold, despite many attempts. Scott Tattar, president of the Philadelphia chapter of the Public Relations Society of America and a veteran of Ketchum's now shuttered office there, is ambivalent about this, even though it means his agency, Tattar Richards-DBC, doesn't have to compete with the goliaths of the industry. "The bigger companies that have tried to make a go of it in this market have not made it," he says. "I'm not sure that's such a good thing for Philly. In some ways, it's a blemish." The main reason for the agencies' shunning of the city, most agree, is that Philadelphia is simply too close to other major cities to warrant paying the overhead for separate offices. But others point to tight-knit media and PR worlds that are hard to penetrate. "There's a community feeling you don't experience in other markets," says Beth Bacha, VP and director of public relations at The Brownstein Group, citing an active PRSA chapter and a fraternal atmosphere that sees agencies often referring business they can't take to others in the market. Still, there is anecdotal evidence that firms from New York and Washington, DC are looking more and more at Philadelphia for work because tough times are leading them to look at smaller projects. Tattar wishes this would translate into more companies in nearby states seeking Philadelphia firms' PR help. "Philly ends up getting squeezed," he says. "Philly can compete on quality and manpower, and we're trying to change the perception that it can't. Maybe New York and New Jersey businesses will realize there's not an electric fence on [Interstate] 95 as you approach Philadelphia."