Top European Agencies 1997: FRANCE - PR is becoming less the little sister of advertising as clients turn to it for strategic advice

The PR industry in France perked up last year after a very sluggish 1995. It would appear that French companies are beginning to realise the value of PR, despite their everlasting love affair with advertising.

The PR industry in France perked up last year after a very sluggish

1995. It would appear that French companies are beginning to realise the

value of PR, despite their everlasting love affair with advertising.



According to a survey of French agencies by the trade association Syntec

RP, fee income grew by 11 per cent in 1996 suggesting a strong

recovery.



Syntec RP vice-president Gilles Moreau said: ’Consultancy activity has

been particularly strong in the key areas of external communications and

consumer PR. Other growth sectors such as telecommunications and

transport, are increasingly turning to PR consultants to manage their

communications.’



The private sector - industry, foodstuffs, energy and commerce - are the

main users of PR in France with some 35 per cent of fees generated by

consumer products and just under 30 per cent by corporate

communication.



There was also evidence of an upturn in 1996 in terms of

recruitment.



Across the sector recruitment rose by eight per cent as many agencies

took on specialist staff to meet client demand. According to Jean-Pierre

Rousset, chief executive officer for Burson-Marsteller: ’There are now a

lot of well trained, highly educated people joining the industry, which

was not the case a few years ago. This is very promising as it suggests

the industry is becoming more professional.’



This is just as well because French clients are becoming increasingly

sophisticated and demanding top notch services. ’Corporate PR is

changing’, says Daniel Verpeaux, associate director of Grayling

Paris.’Globalisation means companies want to have other services like

crisis management, internal communications, communications training for

managers, sponsorship and public affairs,’ he explains. ’More and more

companies are thinking corporately about issues, whether it is internal

or external, and improving their image.’



The trend looks set to continue. Several agencies, like Communications

and Institutions (C&I) whose fee income grew 22 per cent in 1996, are

responding by expanding their corporate communication capabilities.



Nathalie Bonneau, spokeswoman for Adocom, says it is strengthening its

corporate PR services. And although competition has been stiff it has

secured accounts for: British Airways; leading Spanish packaging firm

Torraspapel; French frozen food specialists Patigel; and UK turkey

farmer Bernard Matthews.



Demand for lobbying is up and, in response, all the major agencies are

beefing up their public affairs teams. At the end of 1996 a French

office of public affairs Grey subsidiary was set up along side Moreau

Lascombe GCI. Moreau Lascombe has also been busy bringing in new clients

including pharmaceutical company Pfizer Europe, Tetley, Stadt de France

- the new national stadium for the World Cup next year - French design

house Renoma and the extension of the motorway route through Mont Blanc,

ATMB. Burson-Marsteller has followed suit by recruiting five new members

to its public affairs team as well as expanding its marketing

division.



The biggest news in French public relations in the last 12 months is

probably the corporate spending spree some of the major international

advertising agencies and PR companies have been indulging in. The

omnipresent Omnicom snapped up Ketchum and Fleishman-Hillard. While

other big advertising groups like Publicis and Omnicom-owned BDDO,

muscled into the French PR business by setting up their own corporate PR

divisions or buying up smaller established concerns.



B-M’s Rousset believes that the spur to this foray is fear. ’Advertising

agencies see the PR industry as a threat. They are afraid that PR people

are closer to top management than they are. They see PR as a way to get

upstairs.’ Nevertheless B-M struck a blow of their own by poaching

BDDO’s commercial director Franck Gilardo to run their recently won

McDonald’s account.



PR has always had to do battle with advertising in France to secure the

few remaining crumbs of budget left over after companies settled their

advertising bills. As Monique Mehrez, associate director of Self Image -

Kodak’s new PR advisers - explains: ’In France companies are advertising

oriented, where the return on their investment is big. With PR it is not

so easy to measure the return.’



But now the big French shops also have their eye on PR revenues observes

Jean-Pierre Beaudoin, managing director of Information et Entreprise,

which secured accounts with France Telecom International and IBM Europe

this year. ’I can understand advertising agencies logic in acquiring PR

companies in the hope of generating advertising revenue, but it is at

the expense of developing the PR functions. This has caused some

operations to disappear and others to become institutionalised.’



However, Beaudoin is not overly worried by this activity because he

says: ’Companies are realising that they cannot deal with their

communications issues just by buying advertising space.’ Moreover, more

clients increasingly want high level consultancy and strategic advice

and he doesn’t believe that the newer advertising agency/PR hybrids will

be able to deliver that kind of service as efficiently as the more

established PR firms.



In other industries, IT is the big story. According to Moreau Lascombe

GCI managing director Jerome Lascombe: ’New technology, like on-line

communications, is having a very positive impact on our industry. There

are also lots of opportunities to do things with digital TV.’ Over 70

new TV channels were launched in France at the beginning of this year

which, he says, ’has great potential for PR consultancies’.



Sophie Renard, president of hi-tech outfit Sophie Renard Relations

Publicques adds: ’The internet is going to change our business and we

have to make plans to work with it.’ She already uses the internet to

provide journalists with information on her clients, the ranks of which

have been swelled recently by leading software publishers TBA,

Peoplesoft, Verbatim and Platinum and computer automated design company

Autodesk.



Healthcare is also a growth area, although sewn up to a certain extent

by the advertising agencies. But opportunities exist for PR companies

because of the growing influence of patient advocacy groups and also the

switch of many products from prescription-only to over-the-counter. Some

agencies, like Moreau Lascombe, have expanded their healthcare sectors

to exploit these developments.



Outsourcing of the internal PR function is another recent trend,

according to Rousset. ’In the past clients had huge internal PR

departments but now they want smaller departments and more professional

people from agencies to help with strategic implementation.’



The verdict on the French PR industry is that it is maturing both in

terms of quality and range of services provided by agencies and in the

expectations of clients. However, to continue to compete and offer the

international services that clients want, PR firms that want to retain

their independence are going to have plug into the network

structure.



’Networks are really important’, says Rousset. And on the client side

Beaudoin concludes that although some, like France Telecom, are thinking

beyond national boundaries, ’it is striking to see the number of French

companies that have not included their communications in their

international visions’.



Budgets will continue to be tight while the recession still has its grip

on the nation, but PR in France looks healthy and all predictions are

that things should get even better.



French trade association Syntec RP, the public relations branch of

Syntec Conseil, does not publish its own annual ranking of agencies.



The association’s 20 are, however, required to have been operating for

two years and show profit for the last two years of operation.



The election of the new French government has yet to impact greatly on

the industry. However, during the election campaign, agencies reported

that many clients postponed decisions while awaiting the outcome.



Euro Consultancies: France

Rk Company         Fee income (pounds)  Location   Status

                         96         95

1  Euro RSCG

   Int Comms     24,697,000         **  Paris      Euro RSCG subsidiary

2  Informtn et

   Enterprise*1   5,381,875  4,589,000  Paris      Charles Barker/PRO

3  Burson-

   Marsteller*    4,301,000  4,013,000  Paris      B-M subsidiary

4  Moreau

   Lascombe GCI*  2,388,000  2,405,200  Paris      GCI group subsidiary

5  Hill &

   Knowlton/ACTIS 1,658,000  2,188,000  Paris      H&K subsidiary

6  Comm and

   Institutions*  1,625,000  1,250,000  Paris      Independent

7  Grayling Paris 1,412,000    588,000  Paris      Grayling subsidiary

8  SA Kansa       1,340,281  1,366,000  Paris      BRACQ Gauvin subs

9  Hintzy

   Heymann & Ass* 1,291,250  1,331,250  Issy Les M Independent

10 Sophie

   Renard RP*     1,037,500    650,000  Paris      Euro Plus member

11 Fleishman-

   Hillard        1,037,146  1,023,510  Paris      F-H subsidiary

12 Groupe via

   Nova*            950,000    925,000  Paris      Independent

13 Shandwick

   France *         948,000    933,000  Paris      Shandwick subsidiary

14 Mathieu

   Thomas/Herald    878,656    633,211  Paris      Mathieu Thomas subs

15 Ketchum P R*     862,300    865,000  Paris      Ketchum subsidiary

16 Mediatique       839,231    631,951  Paris      Sanchis & Asocs subs

17 Hard

   Communication    748,000    450,000  Paris      Independent

18 Aromates *       672,719    620,971  Boulogne   Ind/Pinnacle member

19 ACdM conseil *   671,244    656,904  Paris      CIDER Sante subs

20 Nicole

   Schilling Comm*  633,665    612,625  St Nazaire Independent

21 Adocom           612,500    700,000  Paris      Independent

22 Text 100 SARL    514,000    556,000  Paris      Text 100 subsidiary

23 Self Image *     513,375    471,250  Paris      Ind/Pinnacle member

24 Trimedia Info

   Publiques        440,000    375,000  Paris      Trimedia subsidiary

25 14 Juillet       350,000    331,000  Paris      Independent



*Denotes membership of Syntec RP ** Figures not available 1 Includes

figures for Information et Enterprise, Information et Enterprise

Decision, Information et Enterprise Expressions.



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