COMMENT: FOCUS: HEALTHCARE PR; Boom or doom for the small guy

Larger PR agencies have been eager to snap up small healthcare PR specialists in recent times but there are signs that the smaller firms are now trying to hang on to their autonomy. Hilary Freeman reports

Larger PR agencies have been eager to snap up small healthcare PR

specialists in recent times but there are signs that the smaller firms

are now trying to hang on to their autonomy. Hilary Freeman reports

The healthcare PR consultancy sector is enjoying a boom. But the

uneducated client looking through a directory of healthcare agencies

would be forgiven for thinking otherwise. Over the last year, an

increasing number of well-established small specialist agencies have

disappeared from the market. Rather than signifying decay, the

disappearance of small agencies is evidence of a healthy growth, as

generalist agencies move into the healthcare market, swallowing up or

merging with the small specialists.

In only the last 18 months Lowe Bell has acquired MC2, European

Marketing Consultants has bought Fulcrum and Charles Barker has taken

over Concept. Vox Prism Targis has been absorbed by Countrywide Porter

Novelli, Manning Selvage and Lee has acquired Joan Scott and Grayling

has announced it is looking to buy.

Neil Kendle, managing director of specialist, Fusion, says many

generalist agencies have been attracted to the healthcare market because

of its durability and growth during the recession, and the new

opportunities afforded by changes in the NHS. ‘When times get tough

agencies go back to the drawing board. While everyone else was

struggling, healthcare PR agencies were successful. Healthcare PR is a

young and underused discipline which has now come of age,’ he says.

But he warns generalist agencies that healthcare PR cannot be treated

like other consumer areas: ‘They must take a different approach. You

can’t wheel in consumer PR people to help out when times are tough. The

agency’s general philosophy must be conducive to healthcare PR.’

Such advice does not deter the large agencies who are seeking to acquire

specialists in order to break down the barriers between disciplines. The

Grayling Group has made it known that it is looking to buy a small

specialist, which will enable it to grow in the healthcare sector.

Managing director Peter Holden has headed an independent specialist and

is well aware of the small company’s benefits in expertise and


‘The marketplace for healthcare PR personnel is very competitive. Good

people get snapped up very quickly. If we bought a small specialist, we

could absorb its expertise, experience and client list into ourselves.’

The alternative is to buy an agency and let it stand alone: ‘Once a PR

company gets to a particular size, the number of accounts it can hold is

self-limiting. Buying a company and having it stand alone avoids the

problem of conflict of interest,’ says Holden.

Acquisition also brings benefits to the small specialist. Nicky Garsten,

former director of Joan Scott PR, and now account director of Manning

Selvage and Lee says her agency has gained better resources, financial

security and an international network. ‘It’s a different culture, but

MS&L have been extremely welcoming and most of our clients have stayed

with us,’ she says. ‘MS&L already had a strong healthcare department. We

have brought in our patient group experience and they had the

pharmaceutical knowledge. It’s a good match.’

In the two months since its acquisition by European Marketing

Consultants, Fulcrum has enjoyed the advantages of a worldwide network

of PR contacts, allowing it to explore a new international client base.

Managing director Richard Price says access to consumer PR knowledge has

been extremely useful to Fulcrum, as has EMC’s respected reputation. As

for disadvantages: ‘We have to be careful not to swallow up Fulcrum. The

market is littered with acquisitions gone awry. We have planned very


Some mergers and acquisitions are carried out to save a failing

independent specialist. When Countrywide Porter Novelli absorbed

healthcare specialist Vox Prism Targis in spring 1995, its motives were

to rescue its poor relation, rather than to benefit from its expertise.

Although Vox Prism had a good reputation for healthcare PR, it had begun

to stagnate - both in terms of client relationships and new business


Paul Miller, managing director of Countrywide, says the merger was

performed to improve the overall position of parent Omnicom in the

healthcare market.

‘The merger has given Countrywide the benefit of Vox Prism’s healthcare

knowledge and Vox Prism has benefited from the benefits of Countrywide

management structures,’ he says.

EMC’s marriage with Fulcrum brought the agency a new double-barrelled

name - EMC-Fulcrum, recognising the brand reputation of the specialist.

But since its absorption by Countrywide, the name Vox Prism has vanished

from the market, together with several of its clients and personnel and

pounds 300,000 of its fee income.

Miller is philosophical: ‘Compared with 18 months ago, the group is

smaller in size, but it is actually starting to make money. We now have

a stable, happy staff, new clients such as the World Cancer Research

Fund and a profitable business.’

Although the takeover and merger trend appears unstoppable, it is likely

that the market will settle down within the next few years, leaving a

broad spectrum of the generalist agencies, the large and the small

healthcare specialists from which clients can pick and choose.

Pharmaceutical clients, such as SmithKline Beecham, use a variety of

agency types for different accounts. Director of consumer healthcare

communications, Anne-Marie Sal-mon says both large and small agencies

have their strengths and weaknesses: ‘The issue is the ability of the

agency to meet the need of the client group, not what size it is.’

Many small specialists plan to remain independent despite tempting

offers from larger agencies. Justin Clark, director of specialist Clark

Coombes Drake, says the future looks bright for the small agency: ‘The

market is expanding, it is becoming more deregulated and there are more

OTC products, which are governed by less restrictive rules than

prescription products. The small specialists will grow rapidly in the

OTC market.’

Clark says there is nothing a large generalist agency can do better than

the small specialist. The small agency has no distractions, no conflicts

of interest and can put all its efforts into building contact lists and

developing expertise.

‘When a big agency buys a smaller one, the personnel are often used for

general PR activities for other clients, making their work more general

and less specialist,’ says Clark. ‘It is a complex and delicate sector

and clients want people who know their market inside out.’

Clark says the only disadvantage for the independent specialist is that

it may not have the international corporate image or resources of the

large generalist.

‘The challenge is to make clients aware of the small agencies through

press and publicity work,’ he says. ‘We just have to do more to make

ourselves known.’

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