PR firms riding economy with double-digit growth

Crisis communications, hunt for new media seen spurring business

Boston Business Journal
June 16, 2006
By Lisa van der Pool

Massachusetts public relations firms are reporting double-digit growth in an era when marketers are increasingly looking beyond the 30-second television commercial to disseminate brand messages.

Many local PR industry executives use superlatives to describe 2005 and the current year's growth – most notably an increase in billings and hiring. The boom is being attributed to factors including a heavier reliance among clients on PR because of media fragmentation coupled with a robust economy.

"Things are really picking up," said Nancy Sterling, president of the Boston chapter of The Public Relations Society of America. "Look at all the implications of Sarbanes-Oxley: Companies are paying more attention to what they are saying and how they are saying it. There has been a lot of activity in the crisis communications field, and I think organizations are just more aware generally of reputation management."

Nationally, public relations spending is growing at almost double the rate of advertising. Public relations grew to $3.4 billion in 2004, a 12 percent increase over the previous year, while advertising grew to $188 billion, a 6 percent increase over the year before, according to Veronis Suhler Stevenson in New York, a private equity firm that targets the media industries.

The growth is not exclusive to firm size – from the well-established to the startups, positive stories are a common refrain. Area mainstays Schwartz Communications Inc. in Waltham, Regan Communications Group in Boston and PAN Communications Inc. in Andover are all reporting bigger billings in 2005. Four-year-old technology firm Fama PR Inc. in Cambridge nearly doubled its size to 20 staffers, benefiting from the increase in venture capital spending.

Three-year-old Shift Communications in Watertown predicts growth from 2005's $5 million in revenue to $8 million in 2006.

In addition to the healthy economy, principal Todd Defren notes that the desire among his clients to mine messaging possibilities of the social media explosion, which includes blogs, podcasts and RSS feeds, is fuel for growth.

"What's been a surprise for me is the number of companies who say, 'We want to be the social media guinea pig.' We haven't seen that level of openness in a long time," said Defren.

Weber Shandwick's Cambridge office, owned by The Interpublic Group of Companies Inc., had a record year, according to Micho Spring, chairman of Weber Shandwick New England.

Spring attributes the growth partly to "the rise of PR in this environment of validating your brand and reputation."

One mainstream consumer brand that has upped its use of PR is ice cream marketer Baskin-Robbins, which is using Schneider & Associates in Boston to promote the national rollout of the new look of its stores on a grassroots level.

"We have been using PR much more recently than we have in the past," said Bobby Williams, national director of field marketing. "Buying straight media has become more and more difficult as media becomes more fragmented. The American consumer gets bombarded with all kinds of media messages, so it becomes tougher to get your message out. One solid way of doing it is to use PR."

The need to influence customers, investors and employees makes PR more essential than ever, but there is still progress to be made, according to John Isaf, senior vice president and group director of Boston-based Arnold Worldwide's 10-person PR department.

"As an industry we have not done enough to burnish the image and raise the strategic value of the PR profession," said Isaf.

"We're our own worst enemy sometimes. There's no industry standard for measurement, professional code of ethics or single authoritative governing body. The level of strategic value and service quality runs the gamut," he said.