There is no easy money to be made across Europe. Against a background of tentative economic growth and with clients seemingly more careful than ever before over how they spend their budgets, the picture is one of modest growth achieved on the back of plenty of hard work.
With so many of the major PR groups unable to submit figures for last year due to the constraints of Sarbanes-Oxley, the best barometer of performance across Europe is provided by the top networks of independent consultancies.
'Most agencies with the Pinnacle Group did better in 2004 than in the year before,' says Pinnacle European chairman Ruud Bijl. 'Not only was there slightly higher turnover but there appears to be more confidence in the market.'
Bijl is further heartened by a trend he discerns in increasing cross-border PR activity. Whereas five years ago most of this work was undertaken by large blue-chip multinationals, he explains that today a growing number of smaller corporations, and even SMEs, are looking for cross-border support.
By way of example he cites high-street optician Specsavers, which has used Pinnacle in the Netherlands and Sweden.
Public Relations Organisation International reported a four per cent increase in net fee billings among its partners. 'Generally speaking, all of our partner agencies are becoming very busy as business has picked up considerably over the past year,' says corporate secretary Allard van Veen. 'A telling comment is that partners are, again, beginning to talk about the difficulties associated with finding the added consultants they require to meet client needs - always a good sign.'
At the ECCO network, fee income edged up from £18.3m to £18.7m. The increase would have been greater, asserts ECCO operations co-ordinator Kathryn Bishop, were it not for the fact that in 2004 ECCO became a member-only network, forcing those members to pay. This triggered the loss of some affiliate representation from previous years, from areas largely outside of Europe.
The thinking behind the change was to ensure that all members 'bought into' the concept of the network and were committed to winning ECCO business.
'With the EU enlargement in 2004, ECCO's European strategic focus has been largely directed towards central and eastern Europe and we have been pleased to recruit new members for Hungary, Poland and the Czech Republic as well as forging working ties with agencies in Serbia and Montenegro, Russia and Japan,' says Bishop.
Worldcom European region chair Evelyne Martin attests to an increase in business but bemoans the fact that many clients want top-notch creativity and strategic counsel from their agencies yet are unwilling to pay more than a commodity price.
With a glut of freelances and small agencies competing aggressively on price for business across Europe, medium-sized and larger agencies are understandably keen to snaffle higher-margin consultancy business.
Eurocom Worldwide network director Mads Christensen points to central and eastern Europe as an area of tremendous growth for his network. He has also noticed southern Europe becoming more involved as a hub for some pan-European campaigns. As an example he cites a ten-country campaign co-ordinated out of Spain for client DNV, a Norwegian risk management services specialist.
'CSR, community relations and areas such as consultation and certification have been strong,' adds Christensen. 'We see these as growth areas for Eurocom member agencies.'
As we predicted last year, a rapid upturn in client PR spend has not been forthcoming. There are some grounds for cautious optimism, as most agencies are seeing increases in revenue after several difficult years.
And although last year's enlargement of the EU has undoubtedly precipitated new PR opportunities, in both the accession states and 'old' Europe, it is certainly no bonanza.
EUROPEAN CONSULTANCY NETWORKS
Rnk Network Fee income (pounds) Growth Total Clients Loca-
2004/2003 (%) network tion
1 PROI 35,256,000 34,000,000 4 546 n/a* Van-
2 Pinnacle 34,174,000 27,738,392 23 397 n/a Minnea-
3 Worldcom Europe 32,497,619 20,352,332 60 294 n/a London
International 18,654,100 18,268,833 2 385 525 London
Worldwide 21,552,000 15,047,000 43 210 n/a Bergen
All figures relate to year ended December 2004. Fee income = PR fee only;
*n/a = figures not available