THE TOP 150 PR CONSULTANCIES 2002: Top 150 Ups and downs - A year of static growth fuelled by one of the most powerful downturns in marketing has created few dramatic changes within the top ten agency ranking since last year

The corporate practice was the 'biggest disappointment' of the year, with many clients - among them PricewaterhouseCoopers - clamping down on spending. But healthcare grew by 80 per cent last year.

Significant client wins included the launch of Heinz Noodles, repositioning work for the Women's Royal Voluntary Service and white goods manufacturer Tefal.

Internally, Fiona Joyce was promoted to the post of UK managing director and Sally Williams took on the role of MD for strategic business development.

According to Backwith, 2001 was a 'proverbial year of two halves'. Budget cuts began to be implemented by clients in the summer and the trend was expedited by the 11 September terrorist attacks in the US, which triggered even greater caution in the corporate sector.

'One of the things I have really tried hard to do is to recognise that this industry does tend to trade on the overtime of its employees. I'm trying to get the billable hours up and the overall hours down,' says Backwith.

11 FLEISHMAN-HILLARD - £12,444,851 - Climber

Executives at Fleishman-Hillard's global HQ in St Louis must be relieved that their UK brand is finally living up to its promise. Rivals say the London-based office has always been the weak link in the US-based network, but with UK fee income growth of 94 per cent in 2001 and 457 per cent since 1997, F-H is both the fastest growing agency of the year and the top performer over five years.

Much of this sparkling performance owes to acquisitions. In 1999, the agency bought specialist healthcare agency CPR and in January 2001, it acquired tech agency Herald and absorbed Omnicom-sister public affairs agency GPC into its business.

'When I joined the London office in Spring 1999, we had 25 staff, which dwindled down to 20. Now we have around 150,' says F-H European president and chief operating officer Jack Modzelewski.

With F-H the number one PR brand in the US, Modzelewski admits that the erstwhile lack of growth on this side of the Atlantic was something of a disappointment. But, he points out that unlike the Burson-Marstellers and Hill & Knowltons of this world, F-H is a relatively young brand in the UK. 'We have only been in Europe 13 years,' he says.

However, while fee income has grown rapidly over the past five years, from £2.2m to £12.3m, the agency's meteoritic rise has not all been plain-sailing. In 1998, when Deborah Saw took over as MD, despite some impressive business wins from Dell Europe and German publisher Bertelmann's online arm BOL, the agency dropped fee income by one per cent to slump to number 46 in the Top 150 table.

But, since then fortunes have revived considerably, with fee income growth rocketing by 78 per cent in 2000. Certainly, the acquisition of CPR brought some heavyweight pharmaceutical clients including AstraZeneca and GlaxoSmithKline into the F-H fold. In the same year, former ITN journalist and producer Jonathan Hawker beefed up the agency's corporate division by heading-up a newly-created broadcast offering across crisis management, media training and financial services.

Over the past year, like many others, F-H suffered in the tech stakes, with global client Nortel Networks temporarily suspending its business at the end of 2001. But with other clients including Yahoo! and Sierra Wireless, Modzelewski claims that the agency has compensated by diversifying into alternative tech areas.

Growth during the past year has also been organic, with clients such as Procter & Gamble and Astra Zenecca increasing their spend. Likewise, the agency has picked up its fair share of new clients including Intel and Eli Lilly.

According to Modzelewski, the strengthening of the agency's healthcare, PA and tech offerings has laid the cornerstones for future growth. The merger with GPC has given F-H a presence in Brussels, while the acquisition of Herald for a reported £10 m has delivered clients including Kodak and Palm. 'To take advantage of what we have in government affairs, we need to complete the triangle in financial and corporate PR,' says Modzelewski.

17 FISHBURN HEDGES - £8,307,510 - Climber

Fishburn Hedges celebrated its tenth anniversary last year. Its performance in 2001 was an improvement on the previous year and saw an increase in income of two per cent.

CEO Neil Hedges believes that the agency had a good first quarter as a result of 'not taking our foot off the accelerator. Business has to be fought for on a much more competitive basis than before. Clients are casting their nets wide,' he says.

'We don't have separate divisions in the company. We always tried to maintain a diverse client base, from working with financial clients in capital markets to the public sector. That sort of breadth has helped us a lot.'

The core of F-H's business in 2001 came from the public sector and professional and financial services.

The agency won a respectable amount of new business during the year.

In August it was taken on by the DfES to handle media relations and partnership liaison for a national literacy push. In the same month, it was also appointed by global investment group Investcorp to handle its financial and corporate work. Other wins included Visa International. Losses include the public affairs account for smartcard tech specialist Mondex, which went to APCO.

In terms of structure, the year saw a few staff changes. In June the agency announced the promotion of two associate directors - Fiona Campbell and Suzanne Hitchcock - to its board and appointed Suzanne Moore from Hill & Knowlton as an associate director. Sue Garrard, a senior board director at AMV joined as a board director and Sandy Henderson joined from Weber Shandwick. The Design Council's government and communications director joined F-H as its head of design business development.

In April, director Sue Stapely stood down to join issues management firm Quiller Consultants and, in September, board member Anne Rossiter joined lobbying firm Lexington.

One of the highlights of F-H's year was when it won the award for consultancy of the year at the IPR Excellence Awards.

20 BEATTIE MEDIA - £6,725,347 - New entry

Beattie Media performed well during 2001, with a 11 per cent increase in fee income. When many agencies were counting their losses, founder and CEO Gordon Beattie reckons his agency might have recorded a higher increase were it not for the company's change in direction.

'We would probably have recorded a greater income but for the fact that, from existing for certain clients in the public sector, we have gradually focused more on the private sector,' says Beattie. 'Three years ago more than 20 per cent of clients were public sector'. Today he believes it at more like five to ten per cent.

Beattie claims that over 2001, particularly in the Scottish regions, public sector work was not as lucrative as it was, so the agency began to refocus on developing the business in the private sector.

Beattie Media focused on other areas over 2001, including internal communications, IT, telecoms, oil and energy, property and financial and IR. In the third quarter the agency announced that it had created an internal communications division and plans to hire 50 staff to man it within three years. The division is headed by Pauline Arnot, who joined from Vardus Internet Solutions. Beattie won an internal communications remit for BP in the latter half of 2001.

One sector that generated solid growth for the agency in 2001 was the retail sector. It won the SpecSavers Scottish PR account in March - and has since picked up the national account. In July Beattie grabbed retailer Poundstretcher's account when it acquired Scottish agency Linda Young Publicity.

Other wins include the UK corporate and B2B account for Hewlett-Packard in January, making it the company's sole PR consultancy.

It also won bread maker Warburton's PR remit, Abbey Road Studios' and Abbey Road Interactive's trade, B2B and consumer account, and Aberdeen Football Club's media and community relations business.

TheLondon-based financial office, which launched in 2000, took on another four staff over the course of 2001 and early 2002. The company also opened its first overseas office, in Dublin, and intends to continue expanding both throughout the UK and abroad.

24 HARRISON COWLEY - £6,241,961 - Climber

Following the breakdown of rumoured merger talks with PPS, David Heal and co-owner Charles Keil have since sold regional consumer and corporate PR network Harrison Cowley to Lord Chadlington's Huntsworth Group. Despite an admittedly minimal one per cent downturn in income, new chairman Heal believes that 'being wholly-owned we are in a much stronger position'.

He concedes that the agency wasn't immune to the economic pressures of 2001 and that it experienced a lack of client confidence and retrenchment of budgets towards the end of the year.

'New business fell back. There was more project work. The public sector was not quite as good as it was. We didn't seem to get the same quantity and quality of public sector work,' he says.

Heal says that two-thirds of HC's business is consumer-based, with the rest falling into the corporate and B2B areas.

One of the agency's major losses of the year was npower, which went to Hill & Knowlton. Heal admits that the account was colossal and represented some ten to 12 per cent of the agency's business.

1 WEBER SHANDWICK - £41,282,302 - No change

However, following the flat period that was the first seven to eight months of 2001, and the distraction of the takeover talks, business picked up following the Huntsworth deal.

January saw the agency win the Vladivar Vodka account after a two-way pitch with H&K. In February the agency managed to extend on its Land Rover remit. In the same month, private healthcare provider Nuffield Hospitals appointed the agency on a three-year, six-figure reputation management brief.

US sandwich retailer Subway picked the agency to spearhead its UK PR drive in March and Babycham-producer Matthew Clark Drinks handed HC its business in April without a pitch.

Age Concern Enterprise was a significant win. Boeing UK is keen to raise awareness of what the business does in the UK and its appointment of HC to do this provided a major boon for the agency.

Aside from the ramifications of the Huntsworth deal, the agency experienced little internal change. In June it saw the return of former employee Andrew Jarvie, who came back as associate director, to lead the firm's Scottish operations, while in September the company announced the launch of Qten, a youth marketing agency in conjunction with specialist Big Cat.

- With fee income of £6,241,961, Harrison Cowley wasn't immune to the economic pressures of 2001 experiencing a lack of client confidence and retrenchment of budgets towards the end of the year

65 MANTRA PR - £1,859,220 - Climber

For a two-year-old tech agency caught in the maelstrom of the dot.com collapse and economic downturn, Mantra PR's figures for 2001 are spectacular.

The agency has recorded an 80 per cent rise in fee income for 2001, adding six clients to the 14 it reported last year.

The tech specialist started trading in March 2000 with a focus on internet clients. However, last year the firm sagely expanded its remit to embrace a wider variety of technology clients, underlined by appointments by FMCG giant Unilever and brands such as Purple Ronnie, in addition to the likes of John Lewis Direct.

It was the merger of the year, of that there was no doubt. The union of the number one and number six ranked agencies of last year, Weber Shandwick and BSMG, which between them commanded almost £50m in fees during 2000, created the biggest single player in any worldwide market outside of North America. But a reduction in headcount by 80 members of staff and a 17 per cent plunge in fee income testified to both the fact that mergers can be painful and to a significant worsening in market conditions during 2001.

The agency's consumer credentials have been tested following the departure of highly regarded consumer head Edward Waldron-Davies in November last year.

He was replaced by Anna Christoforou, formerly of broadcast agency Bulletin International. The upheaval came too late in the year, however, to have any noticeable impact on the figures.

After peaking at 29 staff during 2001, the agency's headcount has returned to its original 25 at the start of the year following two redundancies and 'natural attrition'.

The eye-catching surge in fee income is the result not just of account wins last year, but also key wins late in 2000, when the agency won consumer work with internet portal Yahoo!

The capture of internet services company Autonomy from The Red Consultancy was also a major factor in Mantra's success during the past year. While not the most conspicuous brand, it is nevertheless the agency's most lucrative client.

100 SPARK MARKETING COMMUNICATIONS - £1,100,152 - Climber

Business-to-business tech PR specialist Spark Marketing Communications had a very good year as fee income leapt by 69 per cent to lift it over the £1m mark.

'To a certain extent the recession has been an advantage for us as companies want agencies they can trust to get results and that offer value for money. They know that paying for a brand name does not always get them that and are therefore more willing to consider smaller agencies who have good contacts and get good coverage,' says joint MD, Lauren Richards.

Much of the agency's growth came from existing clients expanding their accounts. Having won networking company 3Com in September 2000 for annual fees well into six figures, 2001 represented the agency's first full year of working for the company as the number of projects grew and new products were launched. Another existing client increasing its spend dramatically was learning company, netg, as it developed its activities from e-learning to encompass blended learning and all areas of business skills.

Spark was able to introduce a number of creative initiatives, including a survey about Christmas parties, to make the budget work harder and gain more coverage. 'We have shown we can deliver the basics well so long-term clients are happy to take the risk with creative initiatives, which has paid off,' comments Richards.

Weber Shandwick UK chief executive Philip Dewhurst left for an in-house role at BNFL and when the merger was completed in October, the CEO function was split between former Weber Shandwick public affairs supremo Colin Byrne and David Brain, who had been UK chief executive at BSMG.

Another significant factor in the agency's growth has been client referrals.

The agency's biggest account win was CRM consultancy Extraprise. The company came to Spark following a recommendation from a former client. Work for Extraprise included a project on e-returns based on the top 50 retail websites, and promotion of the client's work on the Dulux website.

Other wins included e-business incubator Protege, and self-service tech specialist Safeharbor. Unfortunately Safeharbor was lost later in the year when it decided it could no longer afford to continue its expansion into the UK from the US. Another casualty was e-Marketing, a company specialising in the design and development of internet marketing campaigns.

Richards reports that Spark has recently seen an increase in public sector activity through projects for clients as government initiatives in the tech field start to take effect. 'We have won a project this year to promote e-voting for St Albans council and we hope to carry out more projects throughout 2002,' she adds.

141 PROPELLER - £641,207 - Faller

The sale of its consumer and events arm Propeller Direction to Lexis PR was a major factor in Propeller Group's 24 per cent drop in fee income this year.

Propeller Direction had an annual fee income in the region of £350,000, roughly half Propeller's total fee income, and clients including Interflora and Ryvita. MD Martin Loat explains that Propeller Direction was sold as the first phase of a 'strategic change of focus' for the agency.

'Propeller this year will push into new corporate and business markets beyond its traditional heartland of PR for the media and marketing industries,' he says.

The downturn in the advertising, media and marketing sector, which saw businesses cut back drastically on their spending on external PR services, was the other major factor affecting the decline in fee income.

In a difficult market Propeller did manage to record some significant client wins. These included CNN, and office for National Statistics. It also launched PC screen billboard network Oxigen to universities and the ad industry, and helped the company pick up the award for Best Start-Up in the Revolution magazine awards.

'We believe we are the only player in town with strength and depth in each practice area,' says Byrne. 'For example, we now have 55 people in London who do nothing all day but government relations and public affairs. We really are full-service.'

The agency lost the six-figure account for Translucis, the Diageo-backed bar screen network, to Hill & Knowlton as it changed to a more consumer-focused strategy. Torch Telecom also stopped spending with the agency after a restructure by parent company Kingston Communications.

Having completed the first phase in its change of focus,Propeller is now pushing ahead with the next phase of its plan. Loat says Propeller's issues-based approach is well suited to helping professional services firms such as management consultants and training companies to project themselves. A six-figure investment is being lined up to back the strategy, funded partly from the cash raised from the sale of Propeller Direction and partly from new private investment.

Propeller is also recruiting a director to help drive the expansion, and seeking alliances with key supplier partners in areas such as design, the internet, and research. The agency also recently launched an online press office, www.PropellerPressOffice.com to help clients and other small PR agencies to deal quickly with journalists via the internet.

146 FOX PARRACK HIRSCH - £622,000 - New entry

Tech and telecoms specialist Fox Parrack Hirsch turned in a storming performance as fee income rose by 51 per cent.

PR director Louise Parkes explains: 'As a 100 per cent tech agency, we've been one of the lucky ones and bucked the trend. We've seen 51 per cent growth over the previous year by managing to protect ourselves from the dot.com implosion and winning a significant amount of business from BT, while consolidating our established business in the software and hardware sectors. We've remained very focused, played to our core strengths - and it's paid off.'

The agency won a three-way pitch in late summer for the six-figure account to handle PR for BT Indirect Channels, the multi-million pound retail channel for BT Wireless, BT Openworld and BT Ignite.

Further new wins included management and IT consultants Fujitsu Consulting and new media marketing and design house Graphico New Media.

FPH also saw significant growth from existing software clients looking to take their business into new areas of technology. For example, for Glovia International, the e-business arm of Fujitsu Group, FPH extended its remit to include more issues-led work.

Despite its strong performance, problems in the dot.com sector did have an effect on the agency. 'The worst performing area of our tech work was across the dot.com sector where we saw a high churn rate of clients due, in the main, to withdrawal of second round venture capital funding,' says Parkes. Among the casualties were dot.com companies Be Free, Share-A-Photo and E-Tep.

The financial offering has been strengthened following a three-way merger between Square Mile Communications, the Weber Shandwick team and Golin/Harris Ludgate. Susan Ellis and Tim Jackaman, the founders of Square Mile, head the outfit.

Parkes is also pleased to report that no redundancies were necessary during the year because the agency took the decision to wait rather than expand its team during the dot.com explosion.

- Fox Parrack Hirsch entered the league table for the first time with fee income of £622,000, a rise of 51 per cent. The tech and telecoms specialist bucked the trend in its sector by winning significant business for BT.

Other significant changes have included the creation of a cross-practice strategic media unit under former Sunday Times journalist Michael Prescott and one-time BBC business correspondent Peter Morgan and the recruitment from Countrywide Porter Novelli of Sally Ward as managing director of the consumer practice, an area the agency is looking to develop. 'Both Weber Shandwick and BSMG had allowed their consumer offer to decline a little,' concedes Brain.

New business during 2001 included tech giant Oracle, fast food market leader McDonald's, Coca-Cola, Intel and Nestle ready-meal brand SnackStop.

There was an internal communications brief for PricewaterhouseCoopers, work on GMO issues for the Association of Biotech Industries and the Manchester office picked up business from Shell. Accounts lost included OTC work for Pfizer, Royal & SunAlliance and airline BMI.

Much management time has been devoted to meshing the new entity together and trying to instil a spirit of collaboration and cross-selling. 'We've turned around a regime where people used to run off with leads and hoard them,' says Byrne.

- Weber Shandwick extended its lead of the table after the merger with sixth place BSMG, making it a more than £41m agency. The agency strengthened its financial offering by merging its own team with those of Square Mile Communications and Golin/Harris Ludgate. The new practice is headed by Susan Ellis and Tim Jackaman

2 CITIGATE DEWE ROGERSON - £31,243,119 - No change

For financial and corporate specialist Citigate Dewe Rogerson, which is part of the listed Incepta Group, there was a six per cent decline in revenues as it fell prey to the slowdown on the equity markets as the economic picture worsened and commercial confidence waned.

The dearth of IPOs, following on from the recent boom, was clearly evident. But the consultancy did at least work on one significant flotation in 2001 - the stock market debut of financial services software firm Marlborough Sterling.

'The good news is that income from retained clients increased as did income from M&A activity. But the IPO side slowed down as the markets slowed down in general,' says Citigate Dewe Rogerson deputy chairman Jonathan Clare.

Despite the bear market in the City, Citigate Dewe Rogerson was able to land some plum M&A assignments that went some way towards plugging the gap left by the collapse in IPOs.

It represented National Grid in its merger with Niagra Mohawk Power, worked on E.on's acquisition of Powergen and helped Swiss technology group Sulzer successfully fight off a hostile takeover bid by investment company Incentive Capital. Earlier this year it worked for broadcaster Granada on its stalled merger talks with Carlton.

Important wins in 2001 included a corporate brief for Symbian - the consortium comprising technology and telecoms giants such as Psion, Nokia and Ericsson - that is developing the 'Epoc' operating system for use in future generations of hand-held digital devices. Financial services company Egg and telecoms business Avenir also hired Citigate Dewe Rogerson for corporate and financial PR work.

'There has been a globalisation in terms of public relations markets and we have built the Citigate brand in international markets,' says Incepta Group chief executive Richard Nichols. 'We are being seen increasingly as the best in class.'

The investor relations practice, under Jane Moore, has benefited from the growing internalisation of the Citigate brand, adds Clare.

Although it has been traditionally strong on M&As and these were thinner on the ground in a bearish market, Citigate Public Affairs (listed separately at number 40) still managed to increase its fee income.

'The drive for value is often misunderstood. It's not about charge-out rates or column inches, it's about PR helping a client's business be more effective,' concludes Nichols.

3 HILL & KNOWLTON UK - £28,857,000 - Climber

Revenues were flat at Hill & Knowlton but that masks some significant new business wins at the WPP-owned consultancy. Foods group Nestle handed H&K work on confectionery products such as KitKat, and other wins during the course of the year included United Biscuits, bmi british midland, utility firm npower, Boots' baby feeding product Steri-bottle and a clinical and consumer programme for the 'telemedicine' arm of Philips, focused on a remote heart monitoring device.

H&K also picked up a huge piece of business from Marconi, understood to have spanned 100 countries and been worth approximately £5m per annum.

But when Marconi ran into its much-publicised financial difficulties it killed off its PR spend with the agency. 'If it was not for that, our revenue would have been significantly up year-on-year,' says H&K chairman David McLaren.

There were new public affairs briefs for The British Poultry Meat Federation and The British Venture Capital Association but H&K's star practice area in 2001 was sponsorship, which grew 150 per cent on the back of wins such as UBS's sponsorship of boats in the Volvo Ocean race, the Rugby Football Union (RFU), the World Snooker Association and Gillette. McLaren describes this area of the business as very 'resilient' to last year's downturn.

Other significant pieces of business included a pan-European media training remit for Shell. H&K also did well at hanging on to business that went for repitch: B&Q, British Energy and GE Capital were all retained after the clients went through the repitch process. 'It's wonderful, a great credit to the teams, that we held on to all of these clients,' says McLaren. 'This kind of thing really proves the mettle of an agency.'

Tech giant Oracle departed, however, after H&K resigned the account. In general tech revenues, at ten per cent up on 2000, held up well. But against the backdrop of prevailing economic uncertainty in the latter part of 2001, many clients held off on projects, with consumer clients in particular prone to nerves. As a result, H&K made ten of its 300-plus staff redundant near the end of last year.

'A trading environment like this really sorts out who has strength in depth and real capabilities. It also stops people getting into the sloppy habits that a bull market can tempt you into,' says McLaren.

- Hill & Knowlton picked up a new account from Marconi reportedly worth £5m in annual fees, only for the company to cut its PR spend later in the year. Significant growth in its public affairs business through new work with The British Poultry Meat Federation and The British Venture Capital Association, stemmed further losses. But it was sponsorship, which grew by 150 per cent, that helped H&K's case most in 2001

4 BELL POTTINGER COMMUNICATIONS - £28,603,000 - Faller

'It was a tough year,' concedes Bell Pottinger Communications chairman Kevin Murray. 'We had to reduce our headcount by 20 per cent. It was a combination of people going and not replacing them and some redundancies.'

It was also a year of some senior staff changes and agency brand rationalisation as some of the smaller businesses under the Bell Pottinger banner were either folded into bigger sister firms or moved to elsewhere within parent company Chime Communications.

Sports promotion specialist Bell Pottinger e.sp was rolled into Bell Pottinger Public Relations and its managing director John Tibbs left the group. Similarly, Bell Pottinger Online Strategy was merged into Bell Pottinger Consultants, with its former managing director, Alan Griffiths, remaining as part of the team at Consultants. The latter, says Murray, was the best performing company within the whole of Chime last year. Bell Pottinger Public Relations, by contrast, experienced 'quite a lot of difficulties'. Largely, Murray asserts, because its offer is more at the 'commodity end of the market', which has been hit by the economic slowdown.

Among the major client wins of 2001 were AEA Technology, Marconi, KPMG, property agents Healey & Baker, furniture retailer MFI, Rolex, Southampton Football Club and the Office for National Statistics.

Bell Pottinger Public Affairs, which saw Peter Bingle arrive from GCI as its managing director, picked up business from Channel 5, the Newspaper Publishers Association and Canary Wharf, while Bell Pottinger Financial, which unsurprisingly had a poor second half due to a lack of deals and IPOs on the equity markets, added Abbey National, Royal Bank of Scotland and Friends Provident to its roster.

One drawback in attracting Marconi as a client was that it led to the departure of financial practice managing director David Beck to become corporate communications director at the tech company. Jonathan Brill is currently acting managing director of Bell Pottinger Financial. Bell Pottinger Communications chairman Mike Taylor retired at end of 2001 after 14 years at the company, with Murray stepping into his shoes.

5 COUNTRYWIDE PORTER NOVELLI - £20,645,739 - No change

Arguably the biggest change at Countrywide Porter Novelli in a year when fee income was only marginally down on 2000, was the retirement of chairman Peter Hehir. He founded Countrywide back in 1973, guided its growth into the top tier of UK agencies and in the process became one of the most high-profile and widely respected figures in the PR industry.

Hehir, although now spending much of his time in New Zealand, still provides some informal advice to the business that he shaped and nurtured for the best part of 30 years.

'We didn't achieve what we had hoped to achieve for the year, but we equalled in profits and margins what we did in 2000,' says CPN European CEO Neil Backwith. 'The pattern was a lot of clients reducing spend and putting pressure on our budgets. Tech was the most seriously hit practice area and the first to be hit.'

As a result, CPN made some staff redundant, primarily in the tech practice.

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