TOP EUROPEAN AGENCIES 1998: Altered states - European Monetary Union and a wave of privatisations are forcing a transformation in the way European markets are using PR

These are historic times for Europe. Closer European integration, a distant dream for decades, will become a reality in January 1999 when European Economic and Monetary Union (EMU), is rolled out to 11 participating states. The impact of the euro will be considerable. Not only will the trading prices of equities, bonds and futures be quoted in euros, but the single currency will affect cross-border trade, allowing businesses and private customers to order goods on a pan-European basis, without the hassle of fluctuating exchange rates.

These are historic times for Europe. Closer European integration, a

distant dream for decades, will become a reality in January 1999 when

European Economic and Monetary Union (EMU), is rolled out to 11

participating states. The impact of the euro will be considerable. Not

only will the trading prices of equities, bonds and futures be quoted in

euros, but the single currency will affect cross-border trade, allowing

businesses and private customers to order goods on a pan-European basis,

without the hassle of fluctuating exchange rates.



In a pragmatic move, the London Stock Exchange and its former

arch-rival, Deutsche Borse, struck a strategic alliance in July. The

stated aim is to give investors in both countries a single point of

access to each others’ leading stocks when the single currency is

introduced. As to whether the London Stock Exchange would have been

quite so keen to bed down with Deutsche Borse had the UK signed up for

the first wave of monetary union, is open to speculation.



But even without the new business which monetary union will undoubtedly

bring, financial PR has already replaced hi-tech PR as the most buoyant

sector in Europe.



The reason lies in part with the current craze for flotations on the

Continent, a trend which is re-shaping the corporate landscapes of

German and Italy, in particular. Lutz Meyer, CEO of Shandwick Germany

says that the floodgates were opened in Germany after Deutsche Telekom

floated in November 1996. ’The Germans have discovered the stock

market,’ he says.



His view is shared by GCI Hering Schuppener CEO Ralf Hering, who says:

’The stock exchange is doing very well and financial PR and investor

relations are the two big growth areas in German public relations.’



The same is true in Italy. As Guido Bellodi, president and managing

director of Chiappo Bellodi points out: ’Not only are more companies

trying to get listed on the stock exchange, but those organisations

which had problems during the recession years are discovering that they

need to work on their image.’



However, the French affair with privatisation is showing some signs of

cooling. The new Socialist government has applied the brakes to the

privatisation of state companies, including Air France, La Poste and

France Telecom, which had been earmarked by the previous

administration.



The liberalisation of the European telecom market is also creating

opportunities for PR. In Switzerland, the telecom market was liberalised

in January 1998 and in Holland, EnerTel, a group of nine utilities and

cable firms, has enlisted public relations support to launch it on to

consumer and business markets.



The PR industry has also been drafted in on a Europe-wide basis to help

convince sceptical consumers of the potential benefits of genetically

modified (GM) products. Part of the booming life science sector, work on

GM products has, in many cases, grown from work which agencies were

already doing for the chemical industry. PR is seen as one of the best

methods of counteracting the widespread misinformation the sector

attracts, a situation compounded by the BSE crisis. As Meyer says:

’Anything in the area of life science needs a lot of careful

communication and a good deal of public information, which is why there

is growth potential for both consumer and corporate communications,

including reputation management.’



In the consultancy world Porter Novelli International, which recently

bought a majority share in Paris-based Parmenide Group, has completed

its streamlining process, started last year. All its European agencies

are now branded Porter Novelli. The group has stormed to the top of the

owned groups table with a 13 per cent growth in fee income. In doing so,

it has knocked Euro RSCG, which suffered a six per cent decrease in fee

income, off the top spot.



Shandwick, too has edged up the table, with good performances in France,

Belgium, Spain and Germany, but a disappointing year in Italy. Earlier

this year, Shandwick restructured its UK operation by closing two of its

eight offices to save on administrative costs. Shandwick parent company

International PR also announced its global strategy of operating under

two brands - Shandwick and Golin Harris.



Burson-Marsteller, which held the third position in last year’s owned

group table, also had a good year, despite selling its offices in

Hungary and the Czech Republic. European fee income, including those of

countries outside the EU, stood in 1997 at pounds 52,617,000, an

increase of 12 per cent on the previous year. (Burson-Marsteller has

been unable to break down its PR fee income by country or provide

overall fee income for EU-only countries.)



The UK’s decision to remain outside the first wave of EMU is leading

many to speculate that London’s position as the public relations launch

pad to Europe is under threat.



’London used to be a given for companies and agencies setting up in

Europe but other centres such as Paris and Brussels are increasingly

proving popular, says James Thellusson, European network developer of

Cohn and Wolfe. He adds: ’Brussels is at the heart of the regulatory

action and in the financial area, Frankfurt has great potential. The UK

has size, sophistication and professional depth but people are hedging

their bets because of British attitudes towards the single currency and

the political fall-out that may create.’



But increasingly, companies with their headquarters in a particular

national market prefer to see their own country playing the lead role in

campaigns.



Simon Van Ende of Bennis Porter Novelli in the Netherlands says: ’There

are many companies with their home base in Holland, like Unilever,

Philips and Shell, which like to have their co-ordination point in

Holland. When a campaign is run from London, people in other countries

always have problems with that and it’s the same the other way

round.’



Thellusson of Cohn and Wolfe emphasises that the strength of networks is

the adaptability of its configurations. He says: ’Clients may not choose

one network for all their business. Networks can mean different things

to different clients. Many are picking the best agencies in each market,

but looking for a central agency to drive, evaluate and co-ordinate that

selection of agencies.’



While Europe remains inwardly focused on the events of the coming year,

storm clouds are gathering eastwards. So far, the Asian economic crisis

has failed to make much of an impact on the European market. But as

Shandwick Europe’s new CEO Michael Murphy, who was previously

responsible for Shandwick’s Asian market, warns: ’Asia is not a short

term crisis. All the signs are that the current headiness of the

financial markets in Europe and North America will not last very much

longer. There is a possibility that the current economic problems will

be on a global basis in the next 12 months.’



If Murphy’s prediction comes to pass, it will be a short honeymoon

period for Europe’s new union.



TABLE RANKINGS - THE FACTS ON THE FIGURES



The 1998 PR Week European Consultancies League Table ranks owned groups,

networks and consultancies in leading European markets by calendar year

fee income. For the second year, PR Week has enlisted the co-operation

of trade associations in some of the main continental markets in order

to produce the most comprehensive cross-border league tables in

Europe.



Syntec RP in France, Gesellschaft Public Relations Agenturen (GPRA) in

Germany, Associazione delle Agenzie di Relazioni Pubbliche a Servizio

Completo (ASSOREL) in Italy, Association of Consulting Companies in

Public Relations and Communications (ADECEC) in Spain, Bund der Public

Relations Agenturen der Schweiz (BPRA) in Switzerland, PRECOM and VPRA

in Holland, and ABCRP/BGPRA in Belgium advised on exact definitions of

PR Week’s criteria to avoid misunderstandings in different markets.



According to PR Week’s criteria, ’European income’ includes fees for

public relations work carried out in the EU and Switzerland. It does not

include income relating to non-public relations activities, such as

advertising, direct mail and design etc. To avoid possible

misinterpretation of the term ’mark-up’ in different European markets,

consultancies were asked to submit fee income only. To avoid an

imbalance in the tables caused by the use of different exchange rates,

consultancies were also asked to provide sterling fee income figures for

1997 and 1996 according to a set average exchange rates (see below).



Once PR Week’s tables had been compiled, the trade associations in the

relevant countries checked members figures against their own records to

help ensure the accuracy of the PR Week rankings.



For the 1998 PR Week European Consultancy League Tables, local currency

was converted as per the average Financial Times exchange rates 1997

quoted below.



For comparison purposes, both 1997 and 1996 were converted at the same

rate.



Belgium                  58.6

France                    9.6

Germany                   2.8

Italy                  2787.6

The Netherlands           3.2

Spain                   239.7

Switzerland               2.4



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.