TOP EUROPEAN AGENCIES 1998: BELGIUM - Despite problems of high unemployment, domestic consumption has still proved buoyant Photographs (Omitted)

[TX] Business in Belgium appears to be booming, despite the continued unpopularity of, and scandal surrounding, the Belgian government over the past year. The beginning of 1998 saw the creation of two new political parties and the expulsion by the Francophone Christian Democrat party of its senior members. At the end of April, the short-lived escape from custody of alleged paedophile Marc Dutroux caused the resignation of both the interior and justice ministers. In the aftermath, the coalition government survived a vote of no confidence, but will face further scrutiny later this year when members from the socialist party face trial on charges of receiving bribes.

[TX] Business in Belgium appears to be booming, despite the continued

unpopularity of, and scandal surrounding, the Belgian government over

the past year. The beginning of 1998 saw the creation of two new

political parties and the expulsion by the Francophone Christian

Democrat party of its senior members. At the end of April, the

short-lived escape from custody of alleged paedophile Marc Dutroux

caused the resignation of both the interior and justice ministers. In

the aftermath, the coalition government survived a vote of no

confidence, but will face further scrutiny later this year when members

from the socialist party face trial on charges of receiving bribes.



What amazes ICO president and Interel Marien managing partner

Jean-Leopold Schuybroek, is that the government and public institutions

still refuse to be open with the electorate. He says: ’Nothing has been

explained to the people, they are kept in the dark. The public

authorities still live in the Bronze Age and they pay for it very

dearly.’



He points out that in The Netherlands almost one third of agencies’

business comes from public sources while in Belgium it remains at less

than one per cent.



To add to these problems, the country still has a huge national debt,

well above 100 per cent of GDP, and high - although falling -

unemployment.



While pay rises are limited by law, high wages continue to be a major

problem. As a result, companies with large manual work forces, such as

car manufacturer Renault, have turned to cheaper options, elsewhere in

Europe. Hill and Knowlton Brussels managing director Elaine Cruikshanks

says: ’Unfortunately, restructuring is a major area of business.’ And

Schuybroek says his company has implemented seven large internal

communications programmes for downsizing companies in the past year.



But despite these difficulties, the Belgian story is far from being a

tale of gloom and doom. On the up side, the service industry sector is

growing and now accounts for more than 60 per cent of GNP. In addition,

against all expectations, domestic consumption was buoyant in 1997 and

GDP growth reached a high of 2.9 per cent. Furthermore, plenty of

cross-border business is carried out by foreign multinational companies

based in Brussels. In the face of widespread public discontent with the

government, business has improved and this is reflected in the PR

industry. After all, it should not be forgotten that Brussels is the

centre of the European Union so it attracts international attention of

its own.



Jean-Luc Pleunes, chairman of the Belgium Public Relations Consultants

Association (ABCRP/BGPRA) and managing director of Communication

Partners says that total fee income for his members increased by 20 per

cent last year to hit the pounds 13.5 million mark. He thinks this is a

result of developments in the market since September. ’In the minds of

managers something has changed, they are looking to the future with more

confidence and the will to invest,’ he says. ’We will never return to

the golden years of the early 1990s, but after five years, the market is

finally coming back and taking a long-term view, while making more

strategic and global demands.’



While he says that agencies are increasingly seeing larger budgets, he

thinks clients are continually looking to make their money work

harder.



In addition, companies are also demanding better evaluation of

spend.



To make the industry more credible, the Belgian PR association is

launching a new charter later this year. The 16 current members will

have to conform to professional quality standards and be audited before

the end of 1998 by an independent external expert or risk expulsion.

Pleunes says the new rules will be along the same lines as those imposed

by the UK’s PRCA, but with a bias towards continental working

practices.



Along with others in Europe, another new development for Belgium is the

liberalisation of markets. This has seen an increase in internal

communications work and companies waking up to customer demands over

price and services.



At present, telecom company Belgacom retains its role of ’universal

provider’ with the obligation to provide affordable telephone services

to customers and interconnection services to other telephone companies.

But competitors, such as the Flemish cable consortium Telenet, which is

targeting residential customers with fixed-point telephone services,

have forced Belgacom to introduce revised tariffs and billing systems.

The company is also working on an internal programme to encourage

greater staff efficiency.



Similarly, mobile telecom competition is hotting up with the recent

granting of the country’s third mobile licence to KPN Netherlands and

Orange. ’Because of competition, many companies are now obliged to

communicate to their customers and stakeholders,’ says Pleunes.



But the room for growth within the Belgian PR industry is huge because

of the numerous markets. Firstly, there is the domestic market where

national campaigns are carried out in French for the citizens of

Wallonia and Dutch for the citizens of Flanders. Secondly, there is the

multinational market, serving the boom in international companies based

in and around Brussels.



Countrywide Porter Novelli’s Brussels office, for example, has achieved

major growth since it was set up in 1994 by servicing cross-border

accounts for trade associations and companies such as US zip drive

manufacturer Iomega based in Geneva.



Lastly, there is the public affairs market linked to the European

Commission, which has become increasingly sophisticated. In the past

five or six years this has moved away from regulatory issues to embrace

much broader topics such as genetic modification. The Hill and Knowlton

network, for instance, handles the EC contract to promote the health

benefits of olive oil. H&K’s Cruikshanks, says that while public affairs

is still a major strength, her office is looking to develop its

corporate and marketing communications work. Last September, Cruikshanks

recruited Samantha Rowe from Biss Lancaster to build on H&K’s Brussels

consumer work for Adidas and Kellog.



A major change within the PR market in October 1997 was the merger of

independent agency Ine Marien with Interel to form a new group, Interel

Marien. Managing partner Schuybroek says it was a question of needing to

reach a critical size and the two agencies having complementary

clients.



’As the growth in the market is currently driven by the foreign

multinationals based in Belgium, we wanted to present ourselves as

multi-specialists to win new business’, he says. The agency now

comprises 55 staff divided into seven separate business units: public

affairs, hi-tech, healthcare, crisis and issues management, financial,

corporate and marketing communications.



The question of size has also affected other agencies within the PR

industry.



As the larger agencies get bigger, so the smaller ones are being pushed

out of the market. 1997 saw the closure of Van Luyken and Eeckman,

ranked 16 in last year’s table and a member of the European PR and

public affairs network Entente. Edgard Eeckman, founder of the disbanded

agency, has joined PR Consult, the agency which took over as Entente’s

new network member in Belgium.



In addition, Fleishman-Hillard closed its Belgian office earlier this

year to avoid brand duplication. F-H was bought by media group Omnicom

last year, so remaining clients were transferred to the Brussels office

of new sister agencies Countrywide Porter Novelli and public affairs

group GPC. As the F-H office in Brussels largely served public affairs

clients, CPN Brussels managing director Dominic Lyle says that his

agency has gained clients such as Wang Computers, but the effect on fees

has been small.



However, the larger players remain confident. Cruickshanks says: ’The

introduction of the single currency in January 1999 means that Brussels

will benefit as the capital of Europe.’ She adds: ’The Belgian market

still has a long way to go because of its three-tiered structure. There

are a lot of changes occurring, but that’s good news as it creates more

communications opportunities.’



EURO CONSULTANCIES - BELGIUM

Rank Company                         Fee income (pounds)

97                                   97             96

1    Interel Marien*1                2,000,000      1,358,668

2    Hill and Knowlton*              1,922,000      1,617,000

3    Ellips Communication            1,484,642      1,245,734

4    Shandwick Belgium*              1,338,000      1,214,955

5    APCO Europe2                    1,174,840      1,414,000

6    PRP*                            886,000        795,000

7    Edelman                         786,950        321,637

8    Decitime*3                      513,000        621,105

9    Attitudes PR*                   325,000        214,744

10   Pyramid PR*                     257,000        264,300

11   Appart-Relations                200,000        160,000

12   Kate Thomas & Kleyn*            140,000        226,000

13   Communication Partners          123,275        127,000

Rank Company                      Location     Status

97

1    Interel Marien*1             Brussels     Independent

2    Hill and Knowlton*           Brussels     H&K subsidiary

3    Ellips Communication         Brussels     Independent

4    Shandwick Belgium*           Brussels     Shandwick Int subs

5    APCO Europe2                 Brussels     GCI Group subsidiary

6    PRP*                         Brussels     Ind/ECP net member

7    Edelman                      Brussels     Edelman subsidiary

8    Decitime*3                   Brussels     Ind/IPRN net member

9    Attitudes PR*                Brussels     Ind/IPREX affiliate

10   Pyramid PR*                  Brussels     Ind/Ecco member

11   Appart-Relations             Brussels     Independent

12   Kate Thomas & Kleyn*         Brussels     Independent

13   Communication Partners       Brussels     Independent

* Denotes ABCPR/BGPRA member

1 Figures for both Ine Marien and Partners and Interel, which merged in

October 1997

2 Formerly known as GCI Europe 3 Figures supplied by the ABCPR/BGPRA



- Members of the Belgium PR association - ABCRP/ BGPRA - must have a

minimum of three years’ practice as a PR consultancy



- Although wage rises are limited by law, high wages continue to be a

problem, resulting in many companies with large manual work forces

turning to cheaper options elsewhere in Europe



- 1997 saw the closure of Van Luyken and Eeckman, ranked 16 in last

year’s table and a member of the European PR and public affairs network

Entente. Edgard Eeckman, founder of the disbanded agency, has joined PR

Consult, the agency which took over as Entente’s new network member in

Belgium.



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