PR LEAGUE TABLES: Consumer sector feels the squeeze - Tighter marketing budgets seem to be the norm in the consumer sector, yet many firms have still had to consolidate their positions

A key question in the annual survey on which the Marketing PR league tables are based asks agencies to say what proportion of their income is derived from particular audiences - consumers, investors, business-to-business, political or internal.

A key question in the annual survey on which the Marketing PR

league tables are based asks agencies to say what proportion of their

income is derived from particular audiences - consumers, investors,

business-to-business, political or internal.



Although a minority of agencies decline to provide this information, the

responses are consistent from year to year. According to the latest

survey, expenditure targeted at consumers rose to pounds 142m in 1999

from the 1998 figure of pounds 128.7m.



The business-to-business market appears to have been fairly static,

overall, at around pounds 166m. Consumer PR increased its share of the

total slightly, from 34% to 35.6%, while business-to-business showed a

small decline, from 44% to 41.7%.



This swing is not altogether surprising, given the increased emphasis on

communicating with the public that has emerged in two of the industry’s

most important growth sectors, technology and healthcare (see separate

articles, pages 59 and 68).





Public openness



And Martin Ellis, managing director of Cohn & Wolfe, points to another

factor. ’Consumer is still very strong for us,’ he says, ’but how do you

define it nowadays? A very large part of what was called corporate PR is

business-to-consumer. That’s because many companies are seeing the

benefits of being more open and frank with the public.



’With few exceptions, all accounts have a consumer element now. A

multi-discipline approach is needed. We may create and manage an event,

a roadshow to directly target the consumer and build in the media

component arguably more coherently than an event management company

could be expected to do.’



The Consumer Audience Top 50 table is based on agencies’ responses to

the question about the audiences they address. Naturally, it includes

companies that would also claim to be dedicated specialists in areas

such as technology, like Firefly, or healthcare, like Shire Hall.



Two significant absentees, which ought to appear well toward the top of

this table, are the Bell Pottinger group, whose agencies include Good

Relations and Green Moon, and Burson-Marsteller. Marketing felt unable

to position them accurately because of insufficient data.



Also missing, because it has substantially dropped out of consumer PR in

recent years, is Ogilvy Public Relations. It will be back. Account wins

since Donna Zurcher took over as managing director early last year have

included the BBC licence campaign, Argos, and the Canine Defence League.

’We’ve taken the consumer division from nothing to between pounds 1.5m

and pounds 1.8m this year,’ says Zurcher.





Specialist sector



The purpose of this table is to identify agencies specialising in

consumer PR. Clearly there has to be a cut-off point, but it’s worth

noting that there is a handful of agencies specialising almost

exclusively in consumers, which just miss the cut: Phipps PR, Bryan

Morel, Capitalize, Ptarmigan Consultants, and Colman Getty.



We’ve also grouped together a number of sectors where consumer PR is an

important element, even if the accounts also include

business-to-business aspects, such as media relations with the trade

press.



Unfortunately, it is not possible to make comparisons with last year’s

survey, to get a feeling for trends in these areas, because of attempts

on two fronts to improve data accuracy.



Partly this is a question of minor refinements to the questionnaire.



In addition, however, we have tried to exclude information from City

specialists on the sectors they represent, in the belief that this

distorted the picture.



The argument is that responsibility for publicising the financial

results of a major chocolate or detergents manufacturer does not make a

financial PR agency a specialist in packaged goods. Nor is it easy to

pick up from the agencies themselves what is happening in some of these

sectors.



As Neil Backwith, managing director of Countrywide Porter Novelli points

out: ’None of us has such a strong share of any one market that our own

trends necessarily match the marketplace.’



So it is that Lord Tim Bell, chairman of Bell Pottinger, can suggest

that margins are so tight in a lot of consumer markets that

manufacturers are reducing their marketing investment: ’They will regret

it, but that is what they are doing at the moment.’



Consumer PR is one of the most difficult areas of public relations, he

argues, and may have been affected by an advertising revival.



In contrast, Hill & Knowlton chairman David McLaren says that packaged

goods companies are putting more of their budget into PR, because it

offers better value than some other forms of marketing expenditure.



’We are seeing some of our very big packaged goods clients increasing

their spend,’ he adds. ’If you can measure it and demonstrate its value,

the client will invest more. Our FMCG spend is up - not as much as some

of the IT budgets - but definitely up.’



In spite of reservations about comparability between last year and this,

the answer appears to favour Lord Bell. Hill & Knowlton’s income in this

sector is up, as is Countrywide’s. But most of the other companies in

the Top Ten show a decline. In Shandwick’s case this may be due to

restructuring, which saw its Paragon subsidiary realigned to

Golin/Harris.





Packaged problems



It’s also worth noting that an income of pounds 380,000 from packaged

goods was needed to get into the Top 40 listing for the sector last

year. This time pounds 290,000 is enough.Two companies heavily dependent

on the packaged goods sector are Richmond Towers and Nexus Choat. Both

have shown only modest overall growth in the past year, which may be a

reflection of the conditions in their sphere.



’During 1999, turnover growth was disappointing for us, which is why we

restructured and brought in Jim Horsely as chief executive to lead our

development,’ says Amanda Cryer, managing director at Nexus Choat.



’Since January, we have won six significant new business accounts, three

in healthcare and three in food. Increasing new business, together with

our acquisition programme means our growth is back on track.’



BSMG Worldwide (UK), the True North subsidiary previously known as

Charles Barker, also had a bit of a mixed year so far as packaged goods

were concerned.



It lost two accounts it had held for ten years - Cadbury and Crown

Paints - but won Premier Brands. The agency’s launch of Typhoo tea bars

at the Millennium Dome was one of the best of the year, according to

chief executive Nan Williams.



The agency also picked up a number of major accounts in other sectors,

such as BT and Saudi Telecom, the retail group Kingfisher, London

Business School, Mitsubishi and Travelstore.com. Williams regards it as

a ’set up’ year, building the right base for a move into the top five,

she hopes, within the next couple of years.



’We took the decision at the beginning of the year to review our whole

portfolio, and head straight for the blue-chip, international work,’ she

says. ’We grew modestly in the year because of this repositioning, but

the blue-chip nature of the client base, the amount of international

work, and the profitability of our business were transformed out of all

recognition.’



A comparison she has provided of where BSMG’s income originates shows

total consumer down by 4% to 27% last year, with income from packaged

goods, fashion and beauty and leisure virtually halving. That catch-all

category, Other Consumer Goods, shows a healthy increase, however,

because of new client Kingfisher. There are other compensatory gains in

key growth sectors such as high-tech and healthcare.



Edelman has increased its income from consumer-targeted business. Wins

in the past year have included Heinz, Boots, Procter & Gamble, and

several Pillsbury brands.





Flexible expertise



The agency’s CEO, Tari Hibbitt, claims the factor that attracts the big

brands is Edelman’s ability to assemble a seamless team across different

disciplines. Heinz, for instance, was looking for expertise in consumer

and healthcare. Long-standing client Ericsson employs the agency for

both consumer and technology support.



There have been sharp gains also for GCI/APCO, which are partly

explained by its acquisition of the consumer specialist agency Jane

Howard. Some apple trees, though, only bear fruit every other year, and

it’s a theory that can be applied to some PR agencies.



McLaren says that this tends to be the pattern at Hill & Knowlton, which

is acknowledged by most to be the UK’s leading consumer PR agency. After

a 24% leap in 1998 he was happy with a 10% gain last year.



Similarly, rather further down the table, Craigie Taylor focused on

consolidation in 1999 - ’consolidation’, in the eyes of managing

director Kate Waterfall, being a 14.4% growth rate.



But this year is intended to be another of rapid growth. Account wins in

the first quarter of the year have included LG Electronics, the Royal

Yachting Association, wildlife charity WWF and Action Performance,

supplier of Formula 1 and SuperBike merchandise.



Phipps has climbed 20 places up the packaged goods table, with 61%

growth.



This is due to increased business from existing clients and to wins such

as Whole Earth Foods, Finlandia Vodka, and REH Kendermann.



Strategic planning director Miranda Page Wood says: ’We have responded

to the position of the grocery multiples by developing the expertise

in-house to offer integrated retail sales promotions.



’We are winning budgets for in-store sampling and promotions that we

support through retailers’ magazines, loyalty schemes and web

sites.’



Phipps has also found itself a new managing director, poaching Nick

Hindle from Countrywide.



Darwall Smith is an agency specialising 100% in consumer PR - mainly

packaged goods and leisure - which saw a 44% income growth last

year.



Clients include Procter & Gamble, Swedish Match, Budgens, and 20th

Century Fox Home Entertainment.



Managing director Gill Garside says that growth came from increased

expenditure by existing clients, but also from clients abroad.



For example, the agency works on P&G’s femcare range, Tampax, Always,

and Alldays. ’Our strategic expertise and creative applications have

become the talk of Europe,’ Garside claims. ’Our clients have embraced

us as strategic partners in plans to meet the specific market needs of

other countries.’



The arrangement extends to preparing campaign templates that can be

applied to other countries, such as a successful approach to a product

launch in the UK that was later mirrored in the US. ’This is not only

good for this agency, it is good for the UK PR industry,’ she

concludes.



The Windsor-based agency Elizabeth Hindmarch PR has also grown rapidly,

with income up 51%. Much of the expansion is due to extra business from

established clients, such as Wella, the haircare manufacturer, kitchens

and white goods specialist Miele, and Prestige.



The importance of size in the current market is not lost on founder

Elizabeth Hindmarch, however. She is looking around for a merger partner

of similar size and stature.



At the same time, her agency has a distinct culture. ’Marketers are

under enormous pressure,’ Hindmarch says. ’We know we are only part of

the team, so it is important to keep very close to their business.



’We know weekly if not daily how our clients’ business is doing in sales

terms. We mix with the sales teams as well as the marketing teams to be

sure we are involved at the sharp end. You have to be able to prove to

clients that this two-way communication will give them payback. We make

it clear when we meet new clients that getting under the skin of their

businesses is how we can add value.’





Client focus



Hindmarch adds that she believes two strategies have helped make the

difference for her agency. The first is its focus on existing

clients.



’I have a real policy there,’ she says. ’We try to keep the relationship

fresh by continuing to treat them like new business.’



But, second, the agency had a major push on creativity last year. Staff

at all levels received additional creative training in areas such as

’thinking outside the box’, exposure to ideas that might inspire and

motivate, and different ways of brainstorming.



’The result has been an explosion of new ideas,’ says Hindmarch. ’We

like fresh ideas, and we like them from juniors as much as from

seniors.’



Also worthy of mention is the Propeller Group, which has traditionally

focused on servicing media companies, such as Turner Entertainment.



Founder Martin Loat concluded that this was too restrictive, however,

and recruited Marilyn Wicks to head a new, consumer-oriented subsidiary,

Propeller Direction.



Clients of the new offshoot include Ryvita, Bic Razors, Interflora and

Skoda. Although not big enough yet to show through in our specialist

tables, it has played a part in raising the group’s income by 59% last

year.



Another smallish consumer agency doing well is Focus PR. Between

mid-February and mid-April this year, it picked up more than pounds

500,000 in new business from Piaggio scooters, Montilla Wines, and

Raymond Weil watches. Focus is now looking for new offices.



Dotcom mania is inevitably affecting consumer PR, as it is every other

sector. Nick Band, chairman of Band & Brown, says that a year ago the

agency had one dotcom on its books and now 60% of its income is internet

related. He’s now turning down an average of four new business leads a

week and the over-supply of clients means they are now pitching to the

agency, rather than vice-versa.



’The other significant shift is in the type of work we deliver,’ he

adds.



’We have developed a completely new product set for the

innovation-hungry new economy, techniques not normally associated with

PR companies.



’We’ve run ad campaigns on everything from manhole covers to cash

machines.



We’ve hijacked, ambushed and broken the law for our clients. The

marketing rules for the new economy are that there aren’t any.



’Are we worried that the bubble will burst? We have a broad portfolio of

dotcoms and internet infrastructure clients, so our risk is spread. In

the Great Gold Rush, it was the guys who sold the picks and shovels who

made all the money. That’s us.’





Raising relevance



Nelson Bostock was among the Top Ten fastest growing smaller agencies

last year, with clients as diverse as Bacardi, Martini and Bosch.

Managing director Martin Bostock says it is now reaping the dividends of

the work put in over several years to develop a focused understanding of

the new media, and their relevance to all of its clients.



’We can deliver the goods to a wide range of clients, from dotcom

start-ups all the way to established multinationals. Treating the

internet as somehow removed from a client’s other marketing operations

is a mistake,’ says Bostock.



Alan Twigg, head of consumer business at Harrison Cowley, reports that

the agency is having to drive the marketing strategy a lot more than

previously with the dotcom companies, because of their lack of knowledge

of marketing.



But he detects a change toward greater realism on the part of the latest

dotcoms. They no longer expect to own sectors of the internet, he

declares.



Instead, what is emerging is a hunger for wide-ranging partnerships with

as many online and traditional marketing partners as possible.



Meanwhile, the controversial Robert Phillips at Jackie Cooper has no

hesitation in suggesting that many agencies are getting it badly wrong

by assuming, incorrectly, ’that an online brand needs online

strategy’.



’The majority of online brands are crying out for excellent offline

campaigns,’ he declares. ’This is what we delivered for eToys, are doing

for Boxman and will do for Cahoot.



’Online brands are providing us with a great chance to demonstrate

classic, brand-building flair. After all, a brand is a brand is a

brand.



CONSUMER AUDIENCE - TOP 50

Rank  Agency                        Income 1999          Consumer

                                       (pounds)          (pounds)

1     Hill & Knowlton (UK)           25,707,000        11,954,000

2     Freud Communications            6,690,000         6,356,000

3     Shandwick International        25,924,000         5,963,000

4     Countrywide Porter Novelli     19,019,000         4,565,000

5     Biss Lancaster                  9,688,000         4,553,000

6     Edelman Public Relations        9,001,000         3,960,000

7     Harrison Cowley                 5,402,000         3,781,000

8     GCI/APCO                       12,111,000         3,633,000

9     Jackie Cooper PR                3,523,000         3,523,000

10    Cohn & Wolfe                    6,309,000         3,281,000

11    Citigate Dewe Rogerson         30,027,000         3,003,000

12    Nexus Choat                     3,726,000         2,944,000

13    Consolidated Communications     3,877,000         2,714,000

14    BSMG Worldwide (UK)             9,821,000         2,652,000

15    August.One/Text 100             7,525,000         2,634,000

16    Manning Selvage & Lee           4,317,000         2,590,000

17    Grayling Group                  8,794,000         2,550,000

18    The MacLaurin Group             3,873,000         2,517,000

19    The Red Consultancy             4,016,000         2,209,000

20    Craigie Taylor International    2,390,000         2,199,000

21    Band & Brown                    2,994,000         2,096,000

22    QBO - The Quentin Bell

      Organisation                    3,778,000         2,078,000

23    Lexis Public Relations          3,580,000         2,076,000

24    Cartmell Communications Group   1,902,000         1,902,000

25    The Shire Hall Group            5,903,000         1,771,000

26    Harvard Public Relations        4,596,000         1,701,000

27    Richmond Towers                 4,310,000         1,638,000

28    Holmes & Marchant Group         3,831,000         1,571,000

29    Key Communications              6,061,000         1,515,000

30    Attenborough Associates         1,577,000         1,498,000

31    Munro & Forster Communications  2,300,000         1,495,000

32    Staniforth Public Relations     2,505,000         1,378,000

33    Firefly                         5,652,000         1,356,000

34    BMA Communications              1,885,000         1,282,000

35    Communique Public Relations     2,090,000         1,254,000

36    Barclay Stratton                2,677,000         1,231,000

37    Weber PR Worldwide              9,887,000         1,186,000

38    Beattie Media                   5,900,000         1,180,000

39    Camron Public Relations         1,164,000         1,164,000

40    Bite Communications             2,383,000         1,144,000

41    Fleishman-Hillard               3,607,000         1,118,000

42    Elizabeth Hindmarch PR          1,138,000         1,070,000

43    The Communication Group         3,761,000         1,053,000

44    Fishburn Hedges                 7,803,000         1,014,000

45    Darwall Smith Associates          983,000           983,000

46    Kable Public Relations            943,000           943,000

47    Stephanie Churchill               952,000           904,000

48    BGB & Associates                1,548,000           882,000

49    Nelson Bostock Communications   1,760,000           880,000

50    Grant Butler Coomber Group      2,879,000           864,000



PACKAGED GOODS - TOP 40

Rank  Agency                        Income 1999          Packaged

                                       (pounds)             Goods

                                                         (pounds)

1     Hill & Knowlton (UK)           25,707,000         7,712,000

2     Richmond Towers                 4,310,000         3,879,000

3     Countrywide Porter Novelli     19,019,000         3,423,000

4     Nexus Choat                     3,726,000         3,130,000

5     Shandwick International        25,924,000         3,111,000

6     Biss Lancaster                  9,688,000         2,325,000

7     GCI/APCO                       12,111,000         2,059,000

8     Freud Communications            6,690,000         1,873,000

9     Grayling Group                  8,794,000         1,653,000

10    Key Communications              6,061,000         1,273,000

11    Holmes & Marchant Group         3,831,000         1,188,000

12    Staniforth Public Relations     2,505,000         1,127,000

13    Jackie Cooper PR                3,523,000         1,057,000

14    The Red Consultancy             4,016,000           843,000

15    Weber PR Worldwide              9,887,000           791,000

16    Phipps PR                         812,000           763,000

17    Harrison Cowley                 5,402,000           756,000

18    Lexis Public Relations          3,580,000           752,000

19    College Hill                    7,457,000           746,000

20    BMA Communications              1,885,000           735,000

21    BSMG Worldwide (UK)             9,821,000           687,000

22    Barclay Stratton                2,677,000           669,000

23    Beattie Media                   5,900,000           590,000

24    Darwall Smith Associates          983,000           590,000

25    Brahm Public Relations          2,108,000           527,000

26    Communique Public Relations     2,090,000           523,000

27    Fleishman-Hillard               3,607,000           505,000

28    The Communication Group         3,761,000           451,000

29    Edelman Public Relations        9,001,000           450,000

30    Craigie Taylor International    2,390,000           435,000

31    Kable Public Relations            943,000           434,000

32    Attenborough Associates         1,577,000           394,000

33    QBO - The Quentin Bell

      Organisation                    3,778,000           378,000

34    Manning Selvage & Lee           4,317,000           345,000

35    Golley Slater PR                2,150,000           344,000

36    Vital                             706,000           332,000

37    The PR Connection                 433,000           316,000

38    Myriad Public Relations           879,000           308,000

39    Spreckley Partners              1,043,000           292,000

40    Mere Communications               623,000           249,000



FASHION & BEAUTY - TOP 15

Rank  Agency                        Income 1999         Fashion &

                                       (pounds)            beauty

                                                         (pounds)

1     Shandwick International        25,924,000         1,296,000

2     Freud Communications            6,690,000         1,004,000

3     Stephanie Churchill               952,000           952,000

4     Attenborough Associates         1,577,000           946,000

5     Elizabeth Hindmarch PR          1,138,000           854,000

6     Bryan Morel PR                    857,000           686,000

7     Le Fevre Communications         1,905,000           667,000

8     Countrywide Porter Novelli     19,019,000           571,000

9     Jackie Cooper PR                3,523,000           564,000

10    Harrison Cowley                 5,402,000           540,000

11    Hill & Knowlton (UK)           25,707,000           514,000

12    BMA Communications              1,885,000           490,000

13    GCI/APCO                       12,111,000           363,000

14    Lexis Public Relations          3,580,000           322,000

15    Camron Public Relations         1,164,000           233,000



OTHER CONSUMER SERVICES - TOP 15

Rank  Agency                        Income 1999    Other consumer

                                       (pounds)          services

                                                         (pounds)

1     Countrywide Porter Novelli     19,019,000         1,902,000

2     Shandwick International        25,924,000         1,555,000

3     Freud Communications            6,690,000         1,204,000

4     QBO - The Quentin Bell Orgn.    3,778,000           907,000

5     Harrison Cowley                 5,402,000           810,000

6     Barclay Stratton                2,677,000           589,000

7     The MacLaurin Group             3,873,000           581,000

8     Hill & Knowlton (UK)           25,707,000           514,000

9     Craigie Taylor International    2,390,000           495,000

10    Grayling Group                  8,794,000           492,000

11    Biss Lancaster                  9,688,000           484,000

12    August.One/Text 100             7,525,000           376,000

13    Golley Slater PR                2,150,000           323,000

14    ICAS PR                         2,491,000           299,000

15    Beattie Media                   5,900,000           295,000



OTHER CONSUMER GOODS - TOP 25

Rank  Agency                        Income 1999    Other consumer

                                       (pounds)             goods

                                                         (pounds)

1     Countrywide Porter Novelli     19,019,000         1,712,000

2     Freud Communications            6,690,000         1,539,000

3     Edelman Public Relations        9,001,000         1,530,000

4     Hill & Knowlton (UK)           25,707,000         1,285,000

5     BSMG Worldwide (UK)             9,821,000         1,179,000

6     Manning Selvage & Lee           4,317,000         1,079,000

7     Harrison Cowley                 5,402,000           972,000

8     Key Communications              6,061,000           970,000

9     The MacLaurin Group             3,873,000           968,000

10    Lexis Public Relations          3,580,000           931,000

11    Beattie Media                   5,900,000           885,000

12    Camron Public Relations         1,164,000           815,000

13    Fishburn Hedges                 7,803,000           780,000

14=   Jackie Cooper PR                3,523,000           775,000

14=   Biss Lancaster                  9,688,000           775,000

16    August.One/Text 100             7,525,000           753,000

17    Holmes & Marchant Group         3,831,000           728,000

18    Colman Getty                      937,000           609,000

19    Barkers Public Relations        2,209,000           530,000

20    Communique Public Relations     2,090,000           523,000

21    Shandwick International        25,924,000           518,000

22    Harvard Public Relations        4,596,000           506,000

23    Ogilvy PR Worldwide             4,880,000           488,000

24    Craigie Taylor International    2,390,000           402,000

25    Weber PR Worldwide              9,887,000           395,000



LEISURE, ENTERTAINMENT, TRAVEL - TOP 20

Rank  Agency                        Income 1999          Leisure,

                                       (pounds)     entertainment

                                                           travel

                                                         (pounds)

1     Consolidated Communications     3,877,000         1,939,000

2     Shandwick International        25,924,000         1,555,000

3     BGB & Associates                1,548,000         1,455,000

4     Countrywide Porter Novelli     19,019,000         1,331,000

5     Biss Lancaster                  9,688,000         1,259,000

6     GCI/APCO                       12,111,000         1,211,000

7     BSMG Worldwide (UK)             9,821,000           982,000

8     College Hill                    7,457,000           969,000

9     Edelman Public Relations        9,001,000           900,000

10    Hill & Knowlton (UK)           25,707,000           771,000

11    Harrison Cowley                 5,402,000           702,000

12    The MacLaurin Group             3,873,000           697,000

13    Freud Communications            6,690,000           669,000

14    The Communication Group         3,761,000           639,000

15    Bastion                           779,000           623,000

16    Craigie Taylor International    2,390,000           595,000

17    Jackie Cooper PR                3,523,000           458,000

18    Grayling Group                  8,794,000           431,000

19    Lexis Public Relations          3,580,000           430,000

20    Weber PR Worldwide              9,887,000           395,000



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