Drumbeat for P.R. business grows in R.I.

For Kimberly Lancaster Hageman the past year has been a roller coaster ride, with some dramatic drops and quick ascents that had her questioning the future of the public relations industry.
In a three-month period in 2009, Microsoft decided not to renew its contract with her South Kingstown-based firm, Caster Communications, one client went out of business and another essentially stopped operating. Lancaster Hageman laid off an employee and took on smaller accounts. She scoured the media for potential new clients for the first time in recent memory.
“It was, in my opinion, Armageddon around here,” Lancaster Hageman said.
By the fall the six-person firm managed to regroup somewhat, adding eight new accounts, albeit smaller than normal, and hiring two staffers to fill positions recently vacated. It’s a survival story mirrored throughout the industry after a disappointing 2008 holiday season sent corporate executives slashing marketing accounts.
By the end of 2009 local public relations firms were starting to see signs of life again, thanks in part to increased use of social media and aggressive pursuit of new clients. Still, at Caster revenue was down 18 percent for the year compared with 2008, Lancaster Hageman said. But that was coming off a particularly good year in 2008, when revenue surged 40 percent compared with 2007, she said.
At the larger, Boston-based Regan Communication Group, revenue was flat at the firm’s Providence office, said Lisa Doucet-Albert, a senior vice president. And the edict came down to find more clients.
“We had so much pressure from the top to get out there and try and get additional business,” Doucet-Albert said.
Bill Fischer, president of True North Communications in Providence, said he saw a mild increase in revenue in 2009, but only after beating the drums for business on an unprecedented scale.
Fischer called the uptick a “byproduct of being extremely aggressive, not being shy to call up a total stranger and say ‘I saw you in the paper.’ ”
It has helped that public relations, which he defines as organizing press conferences, writing press releases, serving as a spokesman and providing preparation for clients who will be interviewed, comprises about 85 percent of his business. Fischer and others in the industry said that spending on traditional advertising, such as ads one would find in a newspaper, has taken a fall along with the economy. Instead, companies are shifting budgets to public relations, which is often perceived as less expensive. As a result, local firms that specialized in public relations found themselves escaping the sting of companies axing advertising budgets.
Jonathan Duffy, president of Duffy & Shanley, said revenue from the company’s public relations group increased 24 percent in 2009 compared with 2008, while overall company revenue declined about 10 percent.
Annette Maggiacomo, vice president for public relations at the firm, attributed the jump to a newfound willingness of companies to engage in nontraditional public relations by utilizing social networking such as Faceboook and Twitter. Duffy & Shanley places so much emphasis on such tools that Maggiacomo prefers to call the company a “synchronized, marketing communications firm” rather than an advertising agency.
Maggiacomo says the strategy is the reason the firm won a contract with Staples to handle the office-supply chain’s holiday campaign. Two years ago the Providence firm won a Staples contract to handle the public relations piece of the 2008 holiday campaign. Maggiacomo and her team pitched utilizing Facebook, Twitter and other emerging technologies.
“We showed them something nobody else was showing them,” Maggiacomo said.
Staples bit and then turned to the company to handle its full holiday-season campaign in 2009. Maggiacomo said online campaigns in 2008 and 2009 exceeded Staples’ anticipated results.
Other public relations firms are also finding themselves spending more time on ways to put their clients in the virtual world.
“I see a lot of companies and smaller clients we represent embracing social media,” Fischer said. “I think that’s a byproduct of the economy because it’s cost-effective.”
Launching a Facebook fan group is free, but placing an advertisement on a television station could reach into the tens of thousands of dollars. And sending out a message on Twitter can reach more people than a traditional wire service if done correctly, Lancaster Hageman said. But the same underlying technology that brings firms Facebook also creates a smaller world in which companies find themselves competing with others hundreds or thousands of miles away.
Some, like Duffy & Shanley, are seizing on the ability of technology to level the playing field by chasing national accounts. Duffy said about 85 percent of the firm’s revenue comes from national work, with just 15 percent comprising Rhode Island work. Those numbers, Duffy said, are the opposite from when he arrived in 1998 to take the reins of the company his father, Dave Duffy, started.
Eric Cote, a principal at Cote & D’Ambrosio in North Kingstown, said smart public relations and marketing firms are following that strategy. At Cote & D’Ambrosio, about half the revenue flows from out-of-state business.
“I think our geographic diversity helped us as well, especially when you consider the unemployment rate in Rhode Island,” Cote said. “We have long been geographically diverse, and I have found that to be very helpful. If you are just relying on the Rhode Island and southeastern Massachusetts market for your client base, I don’t know how you could survive.”
Thanks in part to his out-of-state business, Cote said company revenue has remained flat rather than fallen during a tough market. And even Fischer, who describes himself as generally cautious in expanding outside of Rhode Island, has found himself looking for business in Boston.
Often, there are few choices. Duffy said during the past two decades many companies have left Rhode Island or consolidated. That means fewer decision-makers reside here and communications firms must follow the executives. But thanks to technology, the traditional, engrained feeling that one must hire a communications firm headquartered in a major city is slipping away.
“Now it’s about the idea, being smarter than everybody else,” Duffy said. •