THE TOP 150 UK PR CONSULTANCIES 1998: UPS AND DOWNS - The usual front runners top the 1998 league table, but a hectic year of mergers and acquisitions has seen some new names and combinations rocket through the field

1 Shandwick UK: pounds 25,384,000 - NO CHANGE

1 Shandwick UK: pounds 25,384,000 - NO CHANGE



It was a year of changes for Shandwick which yet again topped the league

table with a growth of five per cent. It began with the sudden departure

of Shandwick Consultants chief executive Chris Matthews and four board

directors who left to form a rival public affairs firm the Hogarth

Partnership.



Across the rest of the group, which includes Paragon Communications and

Welbeck Golin/Harris Communications, revenue declined by 2.5 per cent in

the first six months and the then worldwide chief executive Dermot

McNulty talked of a ’loss of momentum’.



With Matthews gone, Shandwick Consultants was hit by the loss of

potential new business, rather than the loss of clients. Undeterred,

Shandwick went on to win a raft of client contracts adding to the 20

already gained in 1997. They included Sheraton hotels, Shell Oils, First

Plus Financial, Allied Bakeries and the Triplex Lloyd defence.

Healthcare and hi-tech were among the best performing divisions.

Shandwick’s new broadcast division benefited from the appointment of

Tessa Curtis, former business correspondent at BBC News and Current

Affairs. Shandwick Public Affairs received a tremendous boost when Colin

Byrne, a former deputy to Peter Mandelson, was appointed managing

director of the division. He has built the division into one of the top

New Labour lobbying outfits.



It was in 1998 however, that things really began to change, including

the arrival of a new Shandwick UK chief executive Michael Murphy,

formerly regional director for Asia. Murphy intends to continue the

shakeup in 1998. ’We need to challenge ourselves in everything we do to

remain in the leading position,’ he says.



2 Bell Pottinger Communications: pounds 23,639,000 - NO CHANGE



Bell Pottinger, formerly Lowe Bell, held on to the number two slot for

the third year running with a fee increase of 13 per cent.



A total of 55 new contracts were won across the group. The Finance and

Leasing Association called in Bell Pottinger to handle a massive

lobbying campaign on the Government’s Finance Bill. And the agency

helped restore tourist confidence in Egypt and handled the merger of

General Accident and Commercial Union.



On the down side, Bell Pottinger financial deputy managing director Jem

Miller retired and Bell Pottinger Political’s Neal Lawson and Ben Lucas

quit the company and joined up with former Tony Blair aide Jon

Mendelsohn to form a rival consultancy called Lawson Lucas Mendelsohn.

Three accounts followed them: Orange, Tesco and KPMG. Bell Pottinger’s

holding company Chime acquired the lobbying firm Russell

Partnership.



But the biggest news of the year was Chime’s pounds 20 million

acquisition of the advertising firm HHCL. The marketing services group

WPP played a crucial role in the final negotiations by taking a sizeable

stake in Chime. The deal, which doubled the size of Chime, gives Bell

Pottinger potential access to the group’s global networks Hill and

Knowlton and Ogilvy Public Relations. There are no formal links, but

relations between Bell Pottinger and HHCL may prove to be more fruitful

as a result of the deal.



’It’s early days and we are different businesses by nature but we get on

very well,’ says Chime deputy chairman Piers Pottinger. ’There’s no

reason why we can’t work together.’



3 Hill and Knowlton: pounds 18,753,000 - NO CHANGE



It was another cracking year for Hill and Knowlton. A 16 per cent

increase in fee income may not be as eye-catching as the previous year’s

34 per cent leap, but it was still the highest percentage increase among

the top five agencies.



New clients in 1997 included insurance group AIG, BT Europe, Direct

Line, Gasprom, London International Group, Merck Sharp and Dohme, Cow

and Gate, Schweppes, Whyte and Mackay and Cadbury’s Milk Tray. To

service this increase in business, the number of staff rose from 202 to

243, with a significant minority of the new intake joining H&K’s

well-regarded graduate recruitment programme. ’The calibre of our

graduate intake gets stronger year by year,’ says chief executive David

McLaren. ’We’re seeing the very best graduate talent making PR a first

choice career option.’



The way ahead, says McLaren, is to continue with a multi-specialist

approach - offering clients the sort of expert knowledge found at a

specialist agency, but being able to ’add value’ by bringing these areas

together when desirable. In order to make this clearer for clients, H&K

is putting together a series of ’packaged services’, the first of which

was the Integrated Sponsorship Consultancy launched in October 1997.



Among the few setbacks last year were the loss of networking giant 3Com

and the departure of deputy chairman Alan Ogden to an in-house job at

investment bank UBS.



4 Countrywide Porter Novelli: pounds 17,039,032 - NO CHANGE



CPN managing director Paul Miller acknowledges that fee income growth of

seven per cent overall was ’a little bit disappointing’ but stresses

this figure needs to be put in context. ’If you just look at the core

CPN brand the annual growth is 10 per cent, which is what we set out to

grow by,’ says Miller.



Lacklustre performance from associated companies Affinity PR, public

affairs business GPC and advertising and marketing agency BMP

Countrywide dragged down the overall growth rate.There were some star

performers within the business. Healthcare almost doubled in size,

attracting Glaxo Wellcome’s Allen and Hanbury drugs portfolio and

international pharmaceutical companies Novartis and Collagen.



Environmental communications was another growth area, increasing

business by 25 per cent. CPN is strong in this area, working for clients

like the Association of Plastics Manufacturers in Europe and the

European Council of Vinyl Manufacturers. Elsewhere, significant wins

were Halfords, McDonald’s (marketing support and community relations)

and SmithKline Beecham (worldwide crisis and issues management).



On the staffing side, two people who had joined the company as trainees

almost 10 years previously, were made managing directors of the two

largest offices. Fiona Joyce assumed the role in London and Debbie

Parris in Banbury.



Pippa Evans was also brought in from GCI to head up the consumer

division in London.



5 Dewe Rogerson: pounds 13,062,365 - CLIMBER



This independent group continued to use its specialist knowledge of

privatisations, flotations and financial public and investor relations

to pull in contracts from Energis, Somerfield and the Veriens Bank in

Germany, to name a few.



Fee income rose eight per cent despite the loss of the Reckitt and

Colman business after 20 years and unit trust provider M&G. The agency

was the subject of persistent speculation that it was on the verge of

selling up and, although he admits having talks with WPP boss Martin

Sorrell, Dewe Rogerson executive chairman Tony Carlisle says there is no

deal ... at least not yet.



While the global trend towards privatisation and the growth of financial

products provided ample opportunities, Dewe Rogerson also saw an

increase in ’through-the-line brand work’ for clients like Prudential,

which it executed through its advertising, PR and design units. But

don’t expect any dramatic departure from the large scale privatisation

campaigns in 1998. ’We like sticking to what we know and understand,’

says Carlisle.



6 Incepta Group (Citigate): pounds 11,433,494 - CLIMBER



A combination of acquisitions and healthy account gains resulted in a 41

per cent rise in the fee income of Incepta’s PR group Citigate. A public

affairs capability was added with the purchase of Westmin-ster

Communications which was then renamed Citigate Westminster.



Citigate Technology gained several big US clients from the acquisition

of the hi-tech specialist Hunt Thompson and the group bought an

insurance PR specialist called RLS. Major wins included Coopers and

Lybrand, NPI and the stock exchange Nasdaq. Citigate also branched out

into ’mainstream issues-led corporate work’ with campaigns like its

three-year pounds 750,000-fee drive to advise the Millennium Commission

on improving its image.



CEO Simon Brocklebank-Fowler pin-pointed healthcare, media and telecoms

and utilities as areas which grew and will continue to grow in 1998. ’We

will always be a financial communications led agency but now we are able

to win business in other areas. We’ve had a cracking start to 1998,

putting on half a million in new fees in the first month,’ says

Brocklebank-Fowler.



7 Weber PR Worldwide: pounds 10,417,177 - CLIMBER



The acquisition by advertising and marketing services group

McCann-Erickson of hi-tech specialist the Weber Group in December 1996

and financial and corporate PR firm Ludgate Group in March 1997, has

created a pounds 10 million-plus agency.



Fee income and growth is based on the combined figures of Weber, Ludgate

and McCann-Erickson PR. Ludgate chairman Tim Trotter said: ’All

businesses came in with big performances, in line with

expectations.’



Account wins for Ludgate during the year included Northern Rock,

newspaper group Newsquest and Scottish Life. Weber Group won Cambridge

Display Technology, manufacturer of ultra thin TV screens,Kodak and

Meckler-Media’s Internet World Show. The biggest win for McCann-Erickson

was Continental Airlines.



On the staff side Richard Elsen joined from Labour’s rapid rebuttal unit

to become deputy head of public affairs at Ludgate and Neil Garnett was

appointed from Grand Met in March to head up the corporate division.



’In the last six months, we’ve been able to really drive the

cross-fertilisation between the operating PR companies,’ says Trotter.

Announcements about joint wins are promised soon. Further acquisitions

are also on the cards.



8 Euro RSCG International Comms: pounds 8,146,841 - CLIMBER



There were mixed fortunes for Euro RSCG in the UK as Biss Lancaster and

corporate communications specialist CGI grew fee income by around 19 per

cent but regional network Greenwood Tighe suffered an 18 per cent

drop.



Overall fee income for Euro RSCG was up 13 per cent. ’Business to

business showed strong growth, particularly in the areas of IT and

telecoms,’ says chairman Graham Lancaster commenting on Biss Lancaster’s

performance.



Among the wins were Butlins, Eurofighter, leasing company Forward Trust,

US clothes retailer Gymboree, and a major international promotion for

Ballantine’s, in association with sister SP agency KLP.



Organic growth from existing clients British Steel, Yellow Pages and

Haagen Dazs contributed to Biss Lancaster’s good performance. Biss

Lancaster’s second brand agency, Sandpiper, also ’had a very good year,’

says Lancaster.



A major win for Sandpiper was Tefal.



CGI, which specialises in annual reports and corporate identity, worked

with Biss on projects for Forward Trust and Eurofighter.



A period of six months without a managing director and a refocusing of

the business were responsible for Greenwood Tighe’s 18 per cent drop in

fee income in 1997, according to managing director Adam Roscoe.



The agency lost the BNFL account, but had better news in October as it

took on the corporate, national and regional PR account for Bass

Taverns, having handled regional media relations in Scotland and the

North of England for five years.



Refocusing saw Greenwood Tighe concentrating on adding value and moving

towards more consultancy work and national campaigns. In the wake of the

Eurofighter win, Lancaster says: ’This year we’re seeking to grow our

international work.’



9 Edelman PR Worldwide: pounds 7,127,300 - CLIMBER



The wealth of PR opportunities in the software and telecom market helped

Edelman achieve an impressive 48 per cent growth.



The agency doubled the income of its hi-tech division with contracts

from the mobile phone producer Simoco, environmental technology firm

Engel-hard Environtech and Ericsson. Healthcare also grew, thanks to a

pounds 300,000 contract from Bayer, as well as work from Hoechst Marion

Roussel and Merck Maxalt. It said good-bye to Hayes Microcomputer and

most of the Commercial Union account.



Edelman also lost its European healthcare head, Robin Wright and

European president Michel Ogrizek who left in May to join Unilever as

head of worldwide corporate relations. Ogrizek was replaced by Joachim

Klewes, who formerly owned and ran German management consultancy K

Brain. On the plus side, Edelman gained several senior players,

including Hugo Peel who jumped ship from business-to-business firm ABS

Communications, where he was a director, to become director of property

and professional services. He brought with him two staff and accounts

worth around pounds 250,000.



The most startling departure, however, was that of UK managing director

of Edelman PR Worldwide Abel Hadden who resigned earlier this year.



Hadden’s successor, Edelman’s former head of European technology Tari

Hibbitt, saw two trends emerge in 1997 which she is confident will

continue into 1998 and beyond. These are the ’convergence’ of accounts

or tendency for three or four agency sectors to become involved in a

programme, and the growth of international business.



Hibbitt plans to increase staff numbers from 65 to 100 by the end of

1998 to prepare for this, including finding European heads of

technology, healthcare and consumer. ’We are going to grow a lot in the

next two to three years,’ she says.



10 The Grayling Group: pounds 6,940,700 - CLIMBER



A 17 per cent rise in fee income to pounds 6.9 million together with a

65 per cent rise in profits to an estimated pounds 1 million were

undoubtedly prime factors in the elevation in January this year of

Grayling Group managing director Nigel Kennedy to the board of listed

parent company Lopex.



There were significant changes in the management of the group’s regional

offices, which have underperformed in recent years. Jonathan Reay, the

director of Grayling’s Nottingham office added Birmingham to his

responsibilities, while Chris Davies, erstwhile director of government

affairs at Bristol-Myers Squibb took charge of the Bristol office. Then

at the beginning of this year, Gabrielle Pursey was appointed director

of the Glasgow operation.



’The regional offices have been the focus for quite a lot of my

attention during the past year,’ says Kennedy. ’I’m optimistic that 1998

will be the first good year they’ve had this decade.’



Grayling is also building up its international presence, adding

Singapore to its operations. Client wins last year included industrial

clothing company Alexandra Workwear, vaccine specialist Pasteur Merieux

MSD, Kitten Soft brand owner Fort James, recruitment business HW Group

and project work for the PAGB and British Gas.



The group’s public affairs arm Westminster Strategy also performed

well.



And an Edinburgh-based lobbying outfit, Strategy in Scotland, was set up

to exploit devolution.



Incepta, the parent company of Citigate, last year took a 10 per cent

stake in Lopex but acquisition advances were rebuffed. Lopex itself

acquired hi-tech specialist John Brace and Associates which brought

about pounds 200,000 in annualised fees and clients such as ICL Retail

Systems to the group.



11 Charles Barker BSMG: pounds 6,840,850 - NO CHANGE



An eight per cent growth in fee income to pounds 6.8 million is hardly

earth shattering stuff given the strength of the market last year, but

as much senior management time at Charles Barker was devoted to

hammering out a deal to sell the corporate and consumer agency to US PR

operation Bozell Sawyer Miller Group it is quite understandable.

’Inevitably your eye does come off the ball,’ concedes CEO Tim Sutton.

’One of the problems of doing a deal is that it’s very time-consuming at

senior level.’



But now that the dust has settled, Charles Barker has the support of a

parent company, True North, that owns two advertising agencies -FCB and

Bozell Worldwide - and can call on its resources to build international

business.



On the home front, new business included Barclaycard, FujiFilm and a

publishing brief for Alliance and Leicester. There was work too on the

Independent on Sunday’s campaign to legalise cannabis and tying up loose

ends for Shell on Brent Spar. But after 21 years at the agency in its

various incarnations, out went holiday camp brand Butlins to Biss

Lancaster.



The arrival early last year of former Maureen Cropper managing director

Rachel Dalton to head up healthcare signalled the agency’s intention to

step up activity in this sector. Since her arrival, Charles Barker has

expanded its work for pharmaceutical clients from over-the counter

medicines into ethical products for client Janssen Cilag.



13 Text 100: pounds 6,182,486 - NO CHANGE



As Text 100 continued to grow, this time by 21 per cent, the agency

restructured into six business units: consumer, business information,

personal technology, projects, public affairs, and telecoms citi

(computer and internet telephony integration). This move was partly due

to the size of the agency, which has grown to 130 people. ’Lots of

clients prefer the feel of a small agency,’ says UK MD Katie Kemp. The

units are run by associate directors who are responsible for profit,

retaining clients and recruiting staff.



Biggest growth was experienced in the telecom and public affairs

sectors.



Text won a lot of new BT work, mainly from global marketing. Microsoft

also significantly increased its public affairs work. Ian Howarth was

recruited from Biss Lancaster to head up the consumer division and was

instrumental in winning the Orange account.



Text lost part of its Cisco account because it had a client conflict in

the UK but it retained European analyst work for the company. The agency

also resigned the Acorn account due to a difference in opinion about how

the account should be moved forward.



One of the welcome trends Kemp noticed was the tendency to win business

without pitching for it, thanks to referrals from Text’s other 17

offices worldwide.



14 Scope Ketchum: pounds 5,673,476 - CLIMBER



’In all, 1997 was a fantastic year, given that we started it with a

merger,’ says chief executive James Maxwell, looking back at the first

year of Scope Ketchum.



Fee income increased by 19 per cent while the client roster shrank

slightly from 47 to 44. ’The Ketchum business had a very large number of

small project clients. We’re focused on working on major clients

in-depth,’ explains Maxwell.



Following the merger the agency restructured, creating eight practice

groups effectively operating as small agencies. ’This worked extremely

well. It’s a structure that’s designed to accomodate growth,’ says

Maxwell.



All Scope clients were retained, apart from Halfords, and existing

clients BT, Xerox and Esso all increased their spend. One of the star

performers was the healthcare practice which started the year with

billings of around pounds 350,000 and ended it with over pounds 1

million, winning business from Pharmacia and Upjohn and Janssen.



The sponsorship practice also had a good year handling the Flora London

Marathon for the first time and picking up two awards - best European

sponsorship for Teachers Whisky in the Hollis awards, and an ABSA arts

sponsorship award for Allied Domecq and the Royal Shakespeare

company.



’We also benefited from the first year of being part of Ketchum and

Omnicom through international client referrals,’ says Maxwell.

Pan-European clients included FedEx and the Meat and Livestock

Commission.



Having started the year with a new management team there were no senior

appointments, except for Serena de Morgan who was promoted internally to

the board following the decision of Karen Croft to go freelance.



15 Freud Communications: pounds 5,504,383 - CLIMBER



Freud’s figures were boosted last year when its parent, advertising

group Abbott Mead Vickers (AMV), bought luxury goods PR specialist

Aurelia Public Relations for a maximum consideration of pounds 4.25

million.



’We recognised that potentially Aurelia had the same opportunities we

did to create serious business out of a niche market,’ says Freud

chairman Matthew Freud on the deal. As part of the new relationship

Aurelia has access to the resources and support structure of the AMV

group but is being allowed considerable freedom.



Separate figures for the two PR agencies show that Aurelia grew its fee

income by ten per cent last year to pounds 973,119, while Freud achieved

growth of 19 per cent on fee income of pounds 4,531,264. ’Our growth was

due almost exclusively to the development of existing clients,’ says

Freud. ’When you expand your portfolio with clients who have already

seen your work it’s the ultimate endorsement.’



Among the big names to give Freud more business were Elida Faberge which

switched its pounds 390,000 Sure Deodorant account from

Burson-Marsteller and PepsiCo Restaurant Group which asked the agency to

handle Pizza Hut and corporate and crisis work in addition to its

existing work for KFC.



’Our media business, which had been fairly flat in 1996, reignited in

1997,’ says Freud. Freud says that there were no major losses, but the

agency did part company with Nickelodeon and Segaworld.



16 GCI Communications: pounds 5,109,100 - CLIMBER



Following growth in fee income of 23 per cent in 1996, GCI had another

very good year, growing fee income by 25 per cent. ’There was

exceptional growth in financial services, healthcare and technology,’

says managing director Adrian Wheeler.



All groups won a lot of new business as GCI grew its retained clients

roster from 49 to 66. Professional and financial services won Barclay’s

Life, Teachers Assurance and law firm Cameron McKenna. A new technology

division was formed headed by Caroline Randle who was recruited from Fox

Parrack Fox. Business came from Lexmark, Nokia Display Systems and

business software company Scala. In the consumer arena, the highlight

was winning the Camel Trophy account. The trade marketing division won

pan-European work from glass and derivative products manufacturer Dow

Corning Construction, and public affairs company APCO was appointed by

Boeing and Polaroid.



Wheeler says there were two losses that hurt - RBS Advanta which

appointed a new head of communications, and BAT which rationalised all

its sponsorship into Edelman.



The agency achieved Investors in People in just a year and was one of

the first to qualify for the PRCA Consultancy Management standard.



17 College Hill Associates: pounds 4,647,827 - CLIMBER



Last year Robert Leach left College Hill for Shandwick after two years

on its board, but by way of compensation there was of plenty of talent

drawn to the financial and corporate agency. Former Ludgate managing

director Tony Friend arrived in 1997, as did former City Marketing

director Simon Astley, and Pam Atherton, the ex-editor of Pensions

Management.



There were few new issue assignments, according to chairman Alex

Sandberg, but a number of MBOs and M&As kept the transactional side of

the business ticking over. About 80 per cent of fee income comes from

College Hill’s retained client base, which is a major reason why it has

enjoyed solid and relatively consistent growth throughout the 1990s. A

16 per cent hike took it up two places.



Financial services has been identified as an area for growth and a win

in this sector was Zurich Life. Other new clients in 1997 included

Monument Oil and Gas, the English First Division Rugby Campaign, Lonrho

Africa and the demerger of SGB from John Mowlem.



Sandberg claims to be delighted with College Hill’s current

circumstances.



It has no debt, is independent of any advertising agency or marketing

services group and has no external shareholders. ’We’re rather

comfortable,’ he says. ’We’re paddling our own canoe with some

success.’



18 Fishburn Hedges: pounds 4,542,006 - CLIMBER



According to chief executive Neil Hedges, for the first time last year

Fishburn Hedges picked up a significant piece of new business (BT)

through FH’s parent, advertising agency AMV. But as last year’s 16 per

cent rise in fee income follows a 22 per cent hike in the previous year,

it seems that although any future business generated through the

connection with AMV will be welcome, it is hardly essential.



Areas of expertise that the corporate and financial agency is looking to

develop include pensions, professional services, property, public

affairs and internal communications. Last year the consultancy carried

out an internal communications programme for Nuffield Hospitals while

the arrival of senior consultant Ann Rossiter - a former adviser to the

minister responsible for pensions, John Denham - added further financial

services capabilities.



Among the wins were US investment bank JP Morgan, Swiss reinsurer Swiss

Re, pensions client Pearl Assurance, London Academy of Music and

Dramatic Art, Goldfish credit card, computer company NCR, BAA Group

Properties and the National House-Building Federation, which came to

Fishburn Hedges after its head of communications Liz Male joined the

agency as a senior consultant.



Meanwhile BG (formerly British Gas) hired the consultancy to design and

manage its annual reports and there was work for the Government on the

controversial new Individual Savings Accounts (ISAs).



’The essential ingredient to successful growth is being able to retain

our people and recruit good new people,’ adds Hedges.



19 Harvard PR: pounds 4,314,000 - CLIMBER



Harvard moved into the top 20 with fee income growth of 20 per cent.



’This growth was achieved despite a strategic reduction in new business

activity for the first six months of the year,’ says chief executive

Nicholas Taylor.



’Following high growth in 1996 we invested significantly in training and

development and information resources to allow us to continue to provide

the best service possible for our clients. The second half of the year

saw us reap the benefits of this prudent policy with a number of major

new client wins,’ Taylor explains.



Growth was even across the board for Harvard’s three principal areas -

healthcare, technology and leisure. Among the major wins were German

software company SAP which gave Harvard a six-figure account to raise

awareness outside the IT departments of corporate users and build

corporate strategy. Agfa charged Harvard with publicising its range of

digital cameras, while Merck Pharmaceuticals called in the agency for a

women’s health campaign. The agency also launched the Nintendo 64 games

console and the Psion Series 5 handheld computer.



Reported losses were Proteon which was bought by Compaq, a competitor to

one of Harvard’s existing clients, and Community Network Systems.



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