Something for everyone

Much like the Lone Star State itself, the PR and business communities in Texas are large and fascinatingly diverse.

Much like the Lone Star State itself, the PR and business communities in Texas are large and fascinatingly diverse.

The state slogan says it all: "Texas. It's like a whole other country." Between Dallas, Houston, and Austin - not to mention a rapidly rising San Antonio - Texas offers one of the broadest business and political environments in the nation.

In energy, rising power demands, higher prices (in the oil, gas, and electricity sectors), and calls for reducing emissions and promoting renewable energy generate lucrative campaign work.

In politics, lobbyists from this reddest of the red states commit millions for PR to pursue policy, while controversial Jewish country singer Kinky Friedman generated ample ink in his failed attempt to become the first indie governor since Sam Houston.

To thrive here, PR pros must be capable in a crisis (displaced Katrina victims, BP Texas City explosion, hurricane-ravaged offshore platforms), but also able to court an emerging Hispanic middle class.

With its favorable tax climate, Texas is home to 102 Fortune 1,000 companies, trailing only California (with 110).

The agency landscape

MWW Group launched a Dallas office in July, in part to support Samsung, which announced construction of a massive semiconductor manufacturing facility in Austin.

And we can expect more work from this locale. With more than $5 billion in industrial projects planned, Travis County's "Silicon Prairie" leads all counties nationwide, according to Industrialinfo.com.

Down the Interstate Highway 35 corridor south to San Antonio, more PR opportunities should stem from economic growth creating 25,000 jobs over the next few years, including Toyota and its new jumbo manufacturing plant.

"We have our eye on San Antonio. In fact, I just got out of a meeting where we discussed just that," says Jeff Hunt, CEO of GCI Group. With Dell already in its stable, GCI is looking to increase its Texas footprint in 2007.

"There's healthy competition here," Hunt says. "In Austin, we run up against Fleishman-Hillard and Edelman. Go to Dallas, and you see Weber [Shandwick]. In Houston, Vollmer is always a player to watch. Then there are loads of independents and boutiques. You don't see this level of play in most markets."

Northwest in Dallas, Exxon-Mobil Corp. reigns as the largest company in the world by revenue, but the city is also known for tech and retail, including 7-Eleven, Blockbuster, EDS, Kimberly-Clark, Mary Kay Cosmetics, Southwest Airlines, Texas Instruments, and Zales.

The Dallas scene has rebounded from the tech downturn, but to levels well below 1999 peaks, with VC money in the state tight and an "almost non-existent IPO market," says Don Bartholomew, GM of MWW Group's Dallas office.

For Houston, 2006 saw the city's metropolitan area ranked third in the US for Best Places for Business and Careers by Forbes. Energy still dominates the agency scene, but the pick of accounts also includes clients ranging from Waste Management to Men's Wearhouse.

This has agencies eyeing more than energy. Mike Lake, chairman of Burson-Marsteller's Southwest region, sees growth in corporate relations and IR - not traditional strengths in Texas - as well as government affairs with the new Democratic Congress.

Ken Luce, president of WS' Southwest offices, says the state's unique demographics and strong Hispanic media mean that some growth will depend on the ability to reach multicultural audiences.

As for the economics of the agency market, Kerry Tate, president of TateAustin, says single-digit profit margins are creeping up, but aren't where they need to be.

"They are not yet in the 18% to 20% range needed to pay the salaries and bonuses you need for sustained agency growth," she says.

Still, while the Texas PR industry seems to be gaining momentum, Teri Daley, incoming president of the PRSA's Dallas chapter, says her members report grumblings.

"Some companies are consolidating the number of agencies they work with as they look for efficiencies," Daley says. "The rules and tools in the industry are changing, which makes 2007 a pivotal year."

The corporate world

Some on the corporate side tend to agree change is needed.

Mark Stouse, director of worldwide corporate communications at BMC Software, says the Texas market lags behind the two coasts in new communications thinking and service offerings.

Stouse points to what he sees as the longstanding fragmentation of the market, the "dearth of top professionals," the difficulty recruiting top talent, and the lack of thought leadership.

"Communications... in Texas can be very traditional, and professionals often can be relatively slow to implement new ideas generated in other parts of the country," says Stouse, who recently tapped Waggener Edstrom after a review.

Roger Frizzell, VP of corporate communications at American Airlines, is less critical, citing the complexity of the market.

"Texas is like another country because what works in Dallas may not work in Austin or San Antonio," Frizzell says. "Also, there is more of an expectation on good corporate citizenship programs - not just pure philanthropy, but getting involved with the community. That can generate a lot of business for an agency with the right ideas."

Media insights

The Texas Press Association lists Texas as having 86 dailies and 438 weekly paid-circulation papers.

"I would say the media here are slightly more community focused than the Northeast, as in more emphasis on softer news from around the market," says Mike Breslin, GM of Hill & Knowlton in Houston. "Also, there is way more [print] coverage of religious issues in Texas than anywhere else I've seen."

Major dailies - The Dallas Morning News, Houston Chronicle, and Austin American-Statesman - and traditional network broadcast outlets dominate Texas media, though they feel the same crunch as traditional outlets elsewhere.

"Major cities like Dallas and Houston are one-newspaper towns," says MWW's Bartholomew. "Texas media outlets have shrunk over the years, and staffing at newspapers is a little leaner."

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