Regional Focus: Rocky road, bright future

Colorado firms are determined to break the boom-bust cycle.

Colorado firms are determined to break the boom-bust cycle.

Colorado's economy was born in a gold rush more than 150 years ago - a portend of wild rides to come. Natural resources drove prosperity until the onset of WWII, then technology, defense, service industries, real estate, and tourism all took their turns. Oil and gas accelerated the economy next, only to skid to a halt in the mid-1980s. The fallout led to aggressive economic-development efforts aimed at diversifying the economy and attracting hi-tech service companies. The ensuing tech explosion fueled a sizable infrastructure, but when the more superficial levels caught fire and crashed, it left a large dent in the economy. "Because the economy was so strong, we weren't actively marketing our attributes - a talented, highly educated workforce, entrepreneurial spirit, cultural and recreation amenities," says Chris Power Bain, director of communications for the Denver Metro Chamber of Commerce. "We were missing a unified message about our strengths. Now we've got to figure out how to develop a sustainable economy that's not as susceptible to boom and bust." Colorado business has not recovered, but the shock seems to be wearing off. "There is a collective psyche for any market," says Jeff Julin, president of MGA Communications. "At some point, it wakes up and says, 'Enough. We're not going to sit around and wait - we're going to create our new future.'" Leanna Clark, principal and co-owner of Schenkein, believes PR needs to be front and center in getting the word out about Colorado. "The more we attract businesses that take root here," she says, "the more opportunity there is for the local agencies to grow." Most PR agencies were still reeling in 2001. Nearly everyone saw billing reductions and staff cuts, and 2002 wasn't much better. But Colorado is home to a tenacious lot that reports they are smarter, if leaner, and ready to rise from the rubble. "Everybody is more aggressive with business development," says MGA's Julin. "But there's a lot less opportunity, so you've got to retract as a business." His firm, specializing in stakeholder and b-to-b programs, billed $2.6 million in 2002 (down from about $3.3 million in 2001), and lost six employees, mainly through attrition, leaving 22. There are reports of slightly improved billings this year, but it's a mixed bag of business gained in Colorado. Linhart McClain Finlon Public Relations held steady (primarily with hospitality, healthcare, transportation, and telecom work), billing $1.4 million compared to $1.45 million in 2001. President Sharon Linhart expects to finish this year at nearly $1.6 million. DeeDee LeGrand, principal and owner of BRW LeGrand, says her agency billed about $1 million last year compared to $1.4 million in 2001, but she projects 2003 will bring about $1.5 million. "This year we've seen about a 30% increase in consumer packaged goods, even though we saw retail sale slumps," she says. "Healthcare has remained steady, and we expect about a 10% increase there." Following the money Schenkein, Ogilvy, and Linhart McClain Finlon also report activity in healthcare, although JohnstonWells Public Relations felt a dip in the sector. "The base of our business changed rather dramatically, but we've had to go where the business is," says Gwinavere Johnston, president and CEO of JohnstonWells. "So now we're real-estate experts, which was the base of our business 20 years ago." The agency has about 25 clients, and billed about $1.25 million in 2002 (down about 35% from 2001). Johnston says numbers are up about 30% now compared to the same time last year. Employees decreased from 20 to 16 (three were laid off). The quest for new business took its toll on the alliance between Ayers and BSM&R Strategic Public Relations, which was dissolved by mutual agreement. Sydney Ayers billed $436,000 last year, and will move on with four employees and the name Ayers Strategic Public Relations. She says the split will allow her to go after clients that her partners weren't interested in. "The tech market is still relatively flat," she says. "The strength has been in manufacturing, real estate, some financial services - and there is a shifting more to biotech," Ayers says. But others believe tech will rebound. Metzger Associates is an entrenched tech specialist, and president and CEO John Metzger says tech will make a strong comeback in Colorado. The agency billed $2.4 million in 2002, and is down from 28 employees to 15. "Biotech is probably the star of the future as far as business tech goes," he says. "IT has become fairly mature. Telecoms got hit, but people use telecoms - it's not like we're trying to sell dog food on the internet. It's real stuff. We're starting to get some traction." LeGrand has some new tech clients, as well as organic growth with existing ones. "I think you're going to see those techs that survived start coming back around - particularly those with good ROI stories," she says. Life after tech Ogilvy, undoubtedly the strongest of the three owned agencies in Colorado, met its goal to diversify from tech, which accounted for about 80% of its business in the first quarter of 2001. Last year, that number dropped to 75%. Managing director Amy Messenger says consumer marketing is this year's fastest-growing sector, and Ogilvy has about 40% non-tech clients, including GE Medical, General Motors, Giant Bicycle, and Quiznos Sub. Interpublic-owned Carmichael Lynch Spong (CLS) increased billings from just over $1 million to nearly $1.5 million last year. It won Lightlife Foods, and saw some organic growth from American Standard and White Wave. Weber Shandwick (WS), which was rumored to have pulled out of Colorado when SVP David Beigie left last spring, continues with VP Jeremy Story at the helm. He'll remain solo, managing the Cigna, Requiste Technologies, and QwestDex accounts, and focusing on winning tech, culture, and travel and tourism clients. "We believe in the market, and we can wait for it to come back," says Story. "It's not costing WS anything - in fact, we're making money while we're waiting." The wait isn't so easy for most firms. "We're paying for the excesses of 1999 and 2000," says MGA's Julin. "But we're finding better ways to do business. We're not moving so fast, and we're making better decisions." Decreased income has forced everyone to hunt for new clients, and it has also required careful examination of new prospects. "It was the year of RFP goose chases," says Ogilvy's Messenger. "Everybody needed more business, but not all the business out there was good business. You had to be discerning." According to CLS partner Elizabeth Neid, the agency is "very particular" about pursuing clients. "We passed on 52% of all opportunities that came our way in 2002," she says. "We like growing with our current clients, and retaining new ones through referrals." Christin Crampton Day, principal and co-owner of Schenkein, adds that chasing business, particularly business without organic growth potential, is expensive. "We don't get involved in too many beauty contests. You can burn a lot of time and resources that way." Schenkein, which Day and Clark bought last June, is one of very few that increased billings in each of the last two years ($3.1 million in 2002 and $2.8 million in 2001). Most growth came from increased spending from its 18 clients, and Day notes that many are asking for media training. The company retained 31 employees (no one has been laid off in 30 years), and will be hiring this year. "We've been smart about diversifying and making sure our business with one particular client doesn't get over 30%, because it can really hurt firms to lose their flagship," Day says. Schenkein's success is also attributed to a commitment to growing in long-term relationships - both with employees and clients. "Our mission and values focus on taking care of our staff first so we can then do the best work for our clients," Clark says. "Staff turnover costs money and time. We haven't had to fight that battle because of our culture. Also, we don't take project work unless it has an opportunity to grow - we don't want clients that aren't going to be long-term partners." Another success story is GroundFloor Media, founded in 2001 and specializing solely in media relations. Based in Boulder, it has 13 clients, and increased billings last year to nearly $500,000 from $110,000 in 2001. It's staff has swelled from seven to 12. "I wanted to grow smart, because I'd seen what happened at the big agencies - they were laying off people that I was ending up hiring," says Laura Love, founder and principal. "There's a lot of room for independent agencies - it's all built on reputation, and there's a lot of talent here. Every single piece of my work has come through word of mouth. It's important to invest in relationships and go after the right client partners. " Love has only been in Colorado for three-and-a-half years, but her success epitomizes Colorado's potential. "It's an open community, a place where hard work and great ideas are the currencies," Bain says. "You'll meet someone who's been here less than five years, and they can be recognized." ----- New mayor puts PR front and center Earlier this month, Denver elected its first new mayor in 12 years. John Hickenlooper (above), a small-business owner with no political experience but plenty of appeal, is viewed as the personification of Colorado's most desirable attributes. Many hope his election heralds positive change. Mayor Hickenlooper will draw on PR resources to help brand Denver and move Colorado forward with a new economic-development push. The PR community seems poised to display leadership in redefining the state's image. "I want to organize a retreat with top PR and marketing people - I think we'll call it Denver 360 - to figure out the essential elements to our brand and how we market that in terms of PR vehicles," says Hickenlooper. "We need to come up with this brand brief for Denver mostly, but also for Colorado. Every PR person in the area has a vested interest in the economy doing well. I want to make sure we get all of them working on turning the economy around. I don't think government traditionally appreciates the impact that the marketing and PR community can have." About 150 people from the PR community attended a luncheon/fundraiser in the week before Hickenlooper's election. "I tried to communicate that our impact as a group far outweighs financial resource," he says. "PR and marketing people have the tools to communicate how great Colorado is, and it's never really been done. "I feel optimistic, and I feel that there is a level of potential energy behind the dam that is ready to burst. PR can be the catalyst. [Former] Mayor Webb has helped us build a great city. Now we have to be a great city."

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