REGIONAL FOCUS: Boston markets

Hit hard by the dot-com decline, Boston agencies are staging a comeback, and tech is far from dead.

Hit hard by the dot-com decline, Boston agencies are staging a comeback, and tech is far from dead.

"Boston is a special place," says Peter Morrissey, president and CEO of Morrissey & Co. "In New York, they'll ask you who you know. In Boston, it's what you know." Tucked along the Northeast shoreline atop vast marsh lands, this bustling symbol of New England is home to the famous revolutionary Tea Party, the annual disappointment of the Red Sox, a diverse community including lobstermen and Kennedys, the everlasting "Big Dig" (a.k.a., the Central Artery/Tunnel Project), and the devastating financial impact of the dot-com bust. Along with its rich and prestigious history, Boston has grown into a city with a vibrant personality. The fact that it is home to scores of high-profile institutions of higher learning - including Harvard, the Massachusetts Institute of Technology, Northeastern University, and Emerson College - also makes the city an appealing place to do business. "The strength of New England comes from a strong academic base," says Ben Kincannon, GM of Fleishman-Hillard in Boston. "That means it's full of entrepreneurs and new ideas." It also means that there is no shortage of stories to tell, making Boston a prime place for communications professionals. Of late, the story has been about technology, its boom and its bust. With the dot-com bubble, Boston's PR market exploded, then rode the bumpy ride of the economy until the bubble burst. After September 11, when the national economy followed suit, many Boston agencies reduced head count and diversified client portfolios to ride out the rough patches. Though some were optimistic in 2002, most were conservative while trying to move forward. Staffing numbers generally stayed steady, with healthcare, government, and biotechnology proving to be points of optimism. "The last 12 months have been challenging for Boston-based PR firms, no doubt," says Jim Barbagallo, partner and co-GM of Porter Novelli Boston. "It's really the continuation of a three-year trend. Tech market consolidation, shrinking marketing dollars, the dwindling trade publication market, and fewer editorial pages all converged to create a really tough market." As a result, agencies have had to adapt to the needs of their clients and demonstrate their flexibility. Long-term relationships have turned into short-term project work, RFPs are more thorough, and the lead times on decisions made by clients are longer. Changing with the times Lois Paul, whose agency, Lois Paul & Partners, helped to build Boston's tech PR reputation, says that while the firm has stayed completely focused on tech, the services offered have changed, shifting to meet customers' needs. "We have offered industry analyst relations as a package," says Paul. "They may not need us for PR, but even within our standard programs, we have things that we can offer individually." Micho Spring, chairperson of Weber Shandwick's New England operations, says the recession and corporate scandals have given rise to more corporate governance and reputation work. "From branding to media relations, our clients are focused on the need to be well understood," she says. Most PR professionals acknowledge that Boston's PR market will never return to the prosperity of the late '90s, and the focus is now on moving forward. "For a company like Nortel Networks, it's helping them get back a focus on what they're doing in tech innovation," says John Isaf, SVP and GM of Magnet Communications' Boston office, which works with Nortel. "As a part of the bubble bursting, a lot of the media attention was toward the financial side of the companies, and many lost sight of the part of the story that drives the revenue. Some tech companies, perhaps because they're under financial pressure, stopped talking about innovations. Financial companies might have lost sight of what made them unique." Those agencies that remained focused on technology clients stayed with them through the financial difficulties. "We made a decision that that's what we do, and that's who we are," says Maura FitzGerald, CEO of FitzGerald Communications. "We could not become a consumer agency. What made more sense was to look for what our clients were looking for and bring the skill sets that met what the clients wanted." Matthew Lloyd, senior account director at Text 100, says that retaining pivotal client IBM and staying focused helped them in the economy's tough times. "It meant riding it through the rough patches, coming up with creative ideas," he says. "The IBM pitch was won because of creativity and a terrific bunch of PR geeks who really knew what they were talking about." Others branched out into previously unchartered areas of technology, looking for new clients and opportunities. Brodeur Worldwide launched a nanotechnology practice in June, and Rainier Corp. added a micro-electro-mechanical systems (MEMS) practice. Janet Swaysland, president at Brodeur, says, "We've had a tremendous response to that from potential clients." The other area of growth opportunity for Boston agencies is biotechnology. "There have been some exciting things in biotech," Kincannon says, "The challenge is that a lot of the firms are smaller, and many of the companies are strapped for cash. There are opportunities in IR and other types of strategic corporate communications." "It's like the tech business in the early stages," explains FitzGerald. "The programs we're doing for them are focused on positioning, messaging. Many don't have products yet, and they need to be understood from a business standpoint." Marcia Kean, CEO of Feinstein Kean Healthcare, details some of the new opportunities given to her firm by biotech clients. "We launched a new product for Parkinson's disease, we launched products and services for a clinical genomics company, we helped announce an FDA approval for a biotech company, and we are helping prepare several clients for financing, including an ex-US company for a Nasdaq listing." The rise of niche firms For PR professionals working in-house, smaller budgets have, not surprisingly, forced practitioners to do more with less. Pam Brickley, director of corporate communications for Boston Scientific, a manufacturer of medical devices, says that while the in-house communications team has never been extravagant, "We're pretty lean and mean for a company this size." Boston Scientific retains Weber Shandwick as its agency of record. Though less work is given to agencies these days, most corporations continue to use them in some capacity. Paul Capelli, director of corporate communications at Staples, says, "Given the number of initiatives that Staples is involved in, and because we have a number of ongoing ones, at any given moment we'll have the agency [MS&L] working on something. A good national agency can provide value." But companies are tending to keep agencies on retainers with short contracts. For instance, data integration company Ascential Software retains agency Beaupre & Co. on a monthly contract focused on media relations and speaking opportunities. But despite the testing climate, many smaller and niche firms are prospering in Boston. Tony Sapienza, principal partner of Topaz Partners, says, "We're large enough to put the resources to the client's need, but we're not burdened down like a large agency." Practicing in technology, professional services, and consumer PR, Topaz has added a client for every month in business since opening its doors as a new agency in 2002. Kelley Chunn, principal at Kelley Chunn & Associates, has found that while the current market is slower and less lucrative, nonprofit organizations and government contractors are using smaller, specialty firms to do multicultural and cause-related PR. While most try to contain their optimism for the future, saying they expect business to stay steady, there are glimmers of hope. Looking forward to the Democratic National Convention, which will descend on Boston in 2004, Chunn says, "There is going to be a broad range of opportunities for political consulting and media relations." Spring says, "I think our clients are beginning to exhale, and that means we will see more product launches. There has been more corporate work, branding, crisis preparedness, but not product launches." One thing that Boston practitioners are quick to point out is the national reach of agencies in the city. With technology, talent, and determination, almost all hold national contracts. And according to Morrissey, that's a far cry from 25 years ago. "When I first started in this business, Boston was a sleepy backwater PR town," he says. "Today, the agencies are every bit as vibrant as - and they can go up against - any of the others in the country."

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