TOP 50 TECH PR: New horizons

Mary Cowlett examines how tech PR firms stayed afloat in a challenging year

While 2001 is regarded as one of the toughest years for technology PR, 2002, unfortunately, did not fare much better.

By the end of the first quarter, many client companies that had clung on during the steepening tech decline of the previous year began losing their grip. Some took drastic steps to reduce their budgets or simply went bust, while many US firms, whose European headquarters were based in the UK, cut their losses and scrambled back stateside to run their European operations.

Where clients lead in terms of sector downturn, agencies can only follow.

This February saw Gnash Communications, once the darling of the dotcom economy, go bust, while others responded to plummeting revenues with drastic job cuts.

In the face of such a sectoral mauling, the question is: how on earth did anyone survive?

Looking at this year's table, the answer is that few emerged from 2002 completely unscathed. Of the 31 listed consultancies that also featured last year, only nine have posted positive growth. Furthermore, any gains have mostly been modest and irrespective of whether operators are generalists or tech specialists.

However, despite a reduction in business across the board, there was still money to be made in both the consumer and B2B sectors, particularly around the introduction of broadband and mobile 3G technologies.

Similarly, while enterprise software and services remained popular with corporate audiences, the consumer love affair with gaming continued.

Looking at the 40 agencies in the table, it is evident that telecoms comprised 21 per cent of sector income, hardware 11 per cent, software and services an impressive 50 per cent, with a further 18 per cent coming from other types of technology.

As with PRWeek's main Top 150 report, the introduction of the Sarbanes-Oxley Act in the US has had a major impact on the appearance of this year's league table, with many of the larger agencies prohibited from supplying figures.

This means some notable absences from the table, including Countrywide Porter Novelli and Fleishman-Hillard. However, as these remain important players, we talked to, among others, Brodeur Worldwide and Ogilvy PR, as well as speaking to Hill & Knowlton and Weber Shandwick about their hi-tech business performance.

Weber Group MD Zoe Arden claims her team was the most successful Weber Shandwick technology practice in 2002. As a result, the division has avoided redundancies and continued recruiting, hiring four staff already this year.

'Business has continued to focus on delivering good value, results-driven programmes, which are about driving sales for our clients,' she says.

However, Arden admits the media environment is becoming much tougher, with journalists demanding more evidence and customer endorsements for technology claims.

H&K head of technology and corporate practice Sally Costerton reports she feels more confident about business now than 12 months ago: 'As people have got used to the fact the market is much smaller, the market has stopped panicking.'

Contributing to this positive outlook is H&K's recent triumph in bagging all four of Hewlett- Packard's UK business units and the tech giant's global corporate communications account. Yet, in such a tight market, Costerton adds that H&K has had to be much more discriminating about what business it seeks to win. 'You have to be very careful about deploying the resources you've got. I can't afford to put existing clients at risk, so I don't want to pitch for anything unless I'm sure we've got a fair chance of winning it,' she says.

Of course, one of the advantages the multinational agencies have over the rest of the tech PR market is the global nature of their business, and the safety net of other specialised skills. For example, at Citigate Technology, chairman Suzy Frith points out the agency is increasingly examining the opportunities in vertical sectors, a move primarily driven by the needs of clients.

'There is a big change among the big IT companies, the likes of IBM, whereby a major source of their revenue is outsourcing services rather than selling products,' she says. 'This means they're having to market themselves properly to the financial or health sector, for example, so no longer necessarily want to talk to the IT sector.'

Naturally, this focus away from classic IT audiences to decision-makers in specialised markets raises training issues for consultants. But Frith adds: 'That's where we're able to work more with our specialists across Citigate's other business.'

This move into vertical markets also holds true for some smaller multi-discipline consultancies, including Firefly and sister agencies August.One and Bite, while Brodeur Worldwide is holding up its business by building on its B2B credentials outside the IT sector.

The other route to survival for tech players is to offer new PR services to clients. This is what Chime's tech arm, Harvard PR, opted for when it launched specialist division Harvard Business Intelligence in August to provide industry analyst relations and speaker programme advice to firms.

Likewise, Brands2Life, which achieved fee income growth of 42 per cent in 2002, offers an online speaker bureau service - marketingdesktop.com - featuring an aggregated listing of all English-speaking conferences for the IT and telecoms market across Europe. Last year the agency also launched a 'thought leadership' service, designed to help clients reach senior decision-makers within their sector through commissioned research or joint projects with business schools.

Others have been using technology itself to become more cost-efficient for clients. 'We try and use clients' money for what we do best - consultancy - so we've kept investing in our technology infrastructure to provide extranets and media monitoring services,' says Costerton.

Lewis PR has gone one step further, recently launching an SMS news update service for clients, desktop-to-desktop video conferencing - which facilitates pan-European briefing sessions - and a video cuttings presentation service.

'You've got to use the technologies the industry itself will be using tomorrow to drive down costs and admin,' explains agency CEO Chris Lewis.

Nevertheless, as budgets have shrunk, so agencies have also had to get their act together in seeking out new business. In some cases, this has resulted in long pitch lists, as clients have forced agencies to the wall on pricing and services.

Yet, this has also led to the larger agencies trying to muscle in on the territory of smaller IT players and freelancers. 'Agencies are constantly trying to poach our clients,' claims Stewart-Muir MD Louise Stewart-Muir.

'I've got some (clients) who receive three phone calls a week from various agencies, plus innovative mailing gimmicks.'

Accountability has also become a hot issue, as clients increasingly have to justify and show value for their PR spend to internal audiences.

'Three words sum up what clients wanted last year: results, results, results,' says Kaizo CEO Crispin Manners. He points out that, in 2002, companies increasingly looked to remove risk from the PR buying process by trying out agencies on a project basis, rather than committing to a retainer. The planning process became all-important, with clients demanding to see outcomes before work had even begun. 'As client expectations continue to rise, you're no longer as good as your last piece of work. It's what you can do tomorrow that counts,' Manners adds.

On the plus side, this only serves to highlight how far the agency market has adapted to the demands of a shrinking market. With a raft of new services and skills on offer, and in many cases a much lighter management load, the prospects for the tech PR sector look brighter.

Certainly no one expects the market to revive significantly in the next 18 months, but on the whole, consultancies seem better armed to respond to change.

TOP TECH CONSULTANCIES 1-25

Rnk Agency Tech fee income (pounds) % Total PR fee

02 02 01 growth income 02

1 Lewis Communications 5,486,466 5,204,078 5 5,486,466

2 Firefly Communications* 4,789,196 7,216,545 -33 5,568,833

3 Bite Communications* 3,704,016 3,651,016 1 4,215,510

4 Citigate 3,516,366 4,936,417 -28 23,442,443

5 Write Image 3,213,276 - - 3,906,582

6 August.One

Communications* 3,010,421 - - 4,631,418

7 Harvard

Communications1 2,932,000 - - 4,229,000

8 Band & Brown

Communications2 2,683,000 3,586,393 -25 5,299,712

9 AxiCom 2,605,852 4,229,234 -38 2,605,852

10 Nelson Bostock

Communications* 2,181,888 1,991,246 10 3,636,480

11 Johnson King 2,126,545 2,305,229 -8 2,126,545

12 Kaizo* 1,955,969 2,195,700 -11 2,818,458

13 Insight Marketing

and Communications 1,880,000 - - 1,880,000

14 Portfolio Group3 1,766,884 1,555,959 14 3,963,847

15 Text 100 International 1,761,166 2,812,548 -37 1,761,166

16 Beattie Media 1,746,265 2,152,111 -19 7,058,467

17 AD Communications* 1,506,091 1,829,736 -18 1,506,091

18 hatch-group* 1,422,021 1,555,105 -9 4,785,876

19 Edelman* 1,401,000 2,008,016 -30 14,563,087

20 Hotwire PR* 1,385,564 - - 1,385,564

21 The Whiteoaks

Consultancy* 1,359,147 1,414,018 -4 1,430,682

22 Brands2Life 1,305,657 917,812 42 1,332,303

23 Companycare

Communications* 1,211,579 1,731,982 -30 1,421,603

24 Midnight

Communications* 1,209,597 1,357,607 -11 1,525,156

25 The Red Consultancy 1,201,827 1,118,467 7 7,693,111

26 Berkeley

PR International 1,118,068 1,279,704 -13 1,118,068

27 Oast Communications 1,089,000 1,100,000 -1 1,361,926

28 Rainier PR 1,073,612 920,000 17 1,073,612

29 Roger Staton

Associates* 973,580 1,634,094 -40 973,580

30 EML 966,382 1,084,553 -11 966,382

31 Spark Marketing

Communications 886,414 - - 886,414

32 The ITPR Group 881,489 864,484 2 881,489

33 Fox Parrack Hirsch 865,201 - - 865,201

34 SNS Group 849,300 - - 1,132,400

35 Lighthouse PR 764,749 799,964 -4 764,749

36 Pinnacle Marketing

Communications 762,250 - - 762,250

37 Multimedia PRM 754,082 806,510 -7 754,082

38 eclat Marketing 747,520 - - 747,520

39 Euro PR Group* 684,963 971,000 -29 1,287,172

40 Buffalo Communications 580,073 - - 580,073

41 Chameleon PR* 511,519 - - 511,519

42 Spreckley Partners 491,453 735,283 -33 1,404,152

43 Houston Associates 468,526 - - 468,526

44 Stewart-Muir

Communications 468,170 - - 508,881

45 Ruder Finn UK 443,221 - - 2,954,811

46 HBL Media 370,620 - - 1,051,692

47 Market Engineering 363,800 - - 472,500

48 Neesham Public Relations 345,207 - - 345,207

49 Lexis Public Relations* 333,004 - - 4,757,207

50 Kinross & Render1 306,593 778,693 -61 1,824,023

Rnk Agency Staff % fee Location

02 02 income

1 Lewis Communications 102 100 London

2 Firefly Communications* 72 86 London

3 Bite Communications* 57 89 London

4 Citigate 39 15 London

5 Write Image 108 82 London

6 August.One Communications* 60 65 London

7 Harvard Communications1 55 69 London

8 Band & Brown Communications2 65 51 London

9 AxiCom 24 100 London

10 Nelson Bostock Communications* 49 60 London

11 Johnson King 24 100 London

12 Kaizo* 40 69 London

13 Insight Marketing and Communications 34 100 Cheshire

14 Portfolio Group3 55 45 London

15 Text 100 International 29 100 London

16 Beattie Media 126 25 Glasgow

17 AD Communications* 20 100 Surrey

18 hatch-group* 65 30 London

19 Edelman* 122 10 London

20 Hotwire PR* 19 100 London

21 The Whiteoaks Consultancy* 34 95 Surrey

22 Brands2Life 22 98 London

23 Companycare Communications* 25 85 Reading

24 Midnight Communications* 34 79 Brighton

25 The Red Consultancy 106 16 London

26 Berkeley PR International 24 100 Berkshire

27 Oast Communications 28 80 Kent

28 Rainier PR 9 100 London

29 Roger Staton Associates* 15 100 Bucks

30 EML 19 100 Surrey

31 Spark Marketing Communications 12 100 London

32 The ITPR Group 15 100 Surrey

33 Fox Parrack Hirsch 8 100 London

34 SNS Group 12 75 Cambs

35 Lighthouse PR 14 100 London

36 Pinnacle Marketing Communications 7 100 Solihull

37 Multimedia PRM 14 100 Chepstow

38 eclat Marketing 9 100 Berkshire

39 Euro PR Group* 16 53 London

40 Buffalo Communications 10 100 London

41 Chameleon PR* 9 100 London

42 Spreckley Partners 21 35 London

43 Houston Associates 11 100 London

44 Stewart-Muir Communications 9 92 Middlesex

45 Ruder Finn UK 46 15 London

46 HBL Media 15 35 London

47 Market Engineering 7 77 Oxon

48 Neesham Public Relations 7 100 Herts

49 Lexis Public Relations* 63 7 London

50 Kinross & Render1 30 17 London

All figures relate to the year end 31 December 2002. Fee income=PR fees + mark-up.*Denotes PRCA member 1 Last year submitted figures as part of Chime Online. In spring 2002, Chime Online was renamed the Harvard Communications Group 2 Includes Pan Media, iJack, Larkspur Communications, Playmaker Communications and Band & Brown Communications (Bristol) 3 Includes Portfolio Communications, Portfolio Metrica, The Answer, Clear Communication Specialist and income from PR accounts from Metrica Research

All figures relate to the year end 31 December 2002. Fee income=PR fees + mark-up.*Denotes PRCA member 1 Includes income from ECCO International Public Relations, in which K&R has a 24.35 per cent stake since the end of 2002

- As a result of the Sarbanes Oxley Act in the US, PR companies owned by Grey, Havas, Interpublic, Omnicom, Publicis and WPP have not entered the league tables this year. The following consultancies, which appeared in last year's ranking, were affected: Brodeur Worldwide, Cohn & Wolfe, Countrywide Porter Novelli, Fleishman Hillard, GCI/APCO, Grayling Group, Hill & Knowlton, Manning, Selvage & Lee, Ogilvy, The Shire Hall Group and Weber Shandwick

- Of the 31 listed consultancies that also featured in last year's ranking, only nine posted positive growth. Any gains have mostly been modest and irrespective of whether operators are generalists or tech specialists.

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