Paul Holmes 06 May 2001 // 11:00PM GMT
NEW YORK—Six months and about 500 layoffs ago, the conventional wisdom in the public relations industry was that PR firms were better positioned to survive an economic downturn than their advertising brethren. To understand why the current recession has people rethinking that idea, look no further than the latest revenue numbers from the Council of Public Relations Firms, which show that in the year 2000 more than 40 percent of all PR revenues came from the technology sector—and remember that number almost certainly excludes a significant number of dot-com clients who were served by consumer marketing and other practice areas.
With the technology sector bearing the brunt of the current recession, it’s not surprising that PR agencies have been hit harder than they expected. Not only were PR firms deriving an extraordinary proportion of their revenues from technology, but in many cases PR was the lead marketing discipline for these companies, setting the strategy and driving most of the messaging. Advertising, traditionally a larger and more tempting target when it comes time for cuts, was in many cases playing a secondary role.
As for the biggest players in the technology sector, Fleishman-Hillard held on to its number one ranking, with tech revenues for 2000 of close to $110 million. Weber Shandwick Worldwide was second, with $88 million in fees, followed by Ogilvy Public Relations Worldwide ($57 million), Edelman Public Relations Worldwide ($56 million) and Waggener Edstrom ($56 million)—the only independent specialist firm to make the top 10.
The big gainers were Hill & Knowlton, where fees more than doubled to $54 million; Schwartz Communications, up 57 percent to $33 million; FitzGerald Communications, up 59 percent to $22 million; and GCI Group/APCO Worldwide, up 59 percent to $21 million.
While the technology sector clearly led the way, with revenues up 46 percent, other industries fared well: revenues from financial products and services, government and non-profit, and industrial clients were up better than 35 percent; and healthcare revenues were up about 30 percent. Only professional service revenues were flat, up just 5 percent on the year.
It’s not surprising then, that the biggest revenue gains were posted in markets that are emerging as centers of the technology industry. The Bay Area—including San Francisco and Silicon Valley—has now clearly established itself as the third largest public relations marketplace in the U.S., with revenues of $402 million. It trails only New York ($788 million) and Washington, D.C. ($440 million), which itself has benefited from the technology boom in northern Virginia.
The fastest-growing market was Austin, where PR revenues were up 132 percent. Sacramento, Seattle, Dallas and Boston also saw healthy growth.
For full details of the rankings, including breakout by industry, practice area, and geography, see our Rankings section.