With a new prime minister, new media players, and the 2010 Winter Games in sight, possibilities abound for Canadian PR.
On January 23, Canadians ended 12 years of Liberal rule. Voters had punished the Liberals after an independent commission ruled the government paid Liberal-friendly communication firms for little or no work, ostensibly to counter Quebec separatism.
New Prime Minister Stephen Harper, a 46-year-old economist from Calgary, and his Conservative Party hope to shape a different Canada. That vision will result in a number of PR opportunities - and some challenges. The recent election and a strong economy are two factors fueling the PR sector.
HEATING UP OUT WEST
Toronto is Canada's economic hub, and the headquarters for most Fortune 500 companies. PR firms there enjoyed solid growth, fueled by double-digit increases in health/pharma and tech (revenues at tech firm High Road Communications increased 25% last year, for instance).
But Calgary has emerged as one of the fastest-growing markets, due mainly to three factors: the region's booming oil and gas sector; the fact that Harper is from Calgary; and that the province, Alberta, is debt-free.
"We see great growth with corporate and public affairs," says Michael Coates, president and CEO, Hill & Knowlton Canada, which opened an energy practice as a result of its acquisition of Calgary shop Sparks & Noble.
Canada's largest PR firm, National Public Relations, beefed up its Calgary headcount to 30. A mere six years ago, National had three Calgary staffers, says chairman and CEO Luc Beauregard.
But not all markets are thriving. Montreal firms continue to bleed following the government scandal and renewed fears of Quebec separation. In fact, DDB Weber Shandwick, once one of Montreal's largest shops, closed its office there. Trish Ault, EVP and manager, WS's Ottawa office, says Montreal is "so competitive," the firm opted to use freelancers to target French media.
In contrast, others are optimistic about Quebec, and expect a rise in government contracts. "Harper must communicate his agenda to reach urban markets," says Jonathan Goldbloom, VP, Montreal-based Optimum Public Relations, the PR arm of Cossette- Communication Marketing, the country's largest ad agency.
While rural Canada voted Conservative, the country's largest cities voted overwhelmingly Liberal. If Harper wants to win a majority in the next election and thus control parliament, Goldbloom says he will need to reassure urban voters.
Fleishman-Hillard expects gains in government work, as it swallows Ottawa-based GPC Public Affairs, a major government relations firm. "Marketers are paying close attention to the new government," says Linda Smith, Fleishman's EVP, senior partner, and regional director.
PR BUDGETS ON THE RISE
Multinationals are following the US' lead by investing more of the marketing budget in PR. Sylvia MacArthur, president, Toronto-based executive search firm Madison MacArthur, suspects that's why more résumés of marketing VPs "take ownership of PR, as opposed to being also-rans."
Procter & Gamble spends C$165 million on TV ads - the largest amount of any advertiser - but the Toronto-based office has "invested dramatically more in PR in the last three years," says Dennis Darby, PR manager, who adds that P&G is also fostering a partnership approach to agency dealings. Though it works with several PR firms, P&G works with Manning Selvage & Lee on up to 15 different brands.
Multinationals are also investing more in investor and stakeholder relations. Toronto's Bay Street (Canada's Wall Street) has seen a flurry of M&As: There were 2,213 deals valued at C$156 billion in 2005, up from 2,086 deals valued at C$94.4 billion in 2004, according to Bloomberg.
Earlier this year, Toronto-based luxury hotel operator Fairmont defended a $1.2 billion hostile takeover bid by corporate raider Carl Icahn. "We had to be proactive in [telling the media] we were looking for another buyer to benefit all shareholders," says Mike Taylor, Fairmont's PR manager.
For the first time, Fairmont hired a PR firm specifically around its business dealings, in this case Toronto-based Environics Communications.
Government relations is key for manufacturers, too. Canada is in the midst of a nasty trade dispute with the US over duties the latter imposes on softwood lumber imports - despite NAFTA rulings in Canada's favor.
"We must work with the Conservatives, but it is more important to reach out to the three other parties than ever before," says Seth Kursman, VP, communications and government relations, Montreal-based Abitibi-Consolidated, a producer of newsprint and commercial printing papers.
THE MEDIA SCENE
Canada has relatively few national media outlets, with just two national papers, led by The Globe and Mail. That can pose problems for clients like the Canadian Imperial Bank of Commerce (CIBC), which often gets negative press, for whatever reason, by the Globe's main business reporter.
Many PR firms are finding they can generate more positive coverage by appealing to different media sections. "Our [CIBC] strategy was to build brand loyalty through its sponsorships" of the Canadian Breast Cancer Foundation's Run for the Cure and Cirque du Soleil, says Natasha Koifman, president, Toronto boutique agency NKPR. "We got CIBC away from the business section, and into the sports and entertainment section."
Yet the market has embraced new national players. Entertainment Tonight launched a Canadian version of its broadcast in the fall. CTV, the nation's largest private broadcaster, is set to debut MTV Canada. The Web has also emerged as a credible media.
"You [must] talk to key reporters because a lot of them have blogs," says Mia Wedgbury, president and senior partner, High Road Communications. For instance, Mark Evans, senior tech reporter with the National Post, operates a popular blog.
Blogs are gaining import with youth and women, she says. And with the second-highest global broadband penetration behind Korea, Wedgbury says companies can't afford not to be there.