Crains New York - February 18, 2013 - (Page 14)

SMALL BUSINESS Specialty PR firms take on Goliaths BY EILENE ZIMMERMAN P ublic-relations firm Spector & Associates used to represent companies in many different areas, including education, energy, telecom and financial services. But about two years ago, with the economy tanking, many of its clients—particularly in financial services and energy—began cutting their public-relations budgets. “We saw clients bringing their PR requirements in-house,” said Elliott Suthers, vice president of the 12-employee company. “We made a decision that we would stay competitively positioned by focusing on defense, health care and high technology, as these are somewhat immune to economic ups and downs.” Those markets made sense geographically, too. “We were seeing a lot of health care startups and Big Pharma companies relocating and expanding in New York City,” Mr. Suthers said. Having already done work for pharmaceutical giants, the firm made a smooth transition to representing health care startups like eCaring, one of its newer clients. “We see a lot of potential on the back end, as these companies grow,” Mr. Suthers said, noting that Spector & Associates is profitable and its revenue has more than tripled over the past two years (he declined to reveal the actual revenue number). Double-digit growth Public relations is a $4.2 billion industry in the U.S., according to a report in September from investment firm Veronis Suhler Stevenson. It was hit hard by the recession, but that only added to challenges brought by a changing media and communications landscape, according to Matt Shaw, senior vice president of the Council of Public Relations Firms, a trade association. Becoming more specialized has helped many PR agencies—especially small ones—compete. As a result, Mr. Shaw said, the industry has 14 | Crain’s New York Business | February 18, 2013 adjusted well: “The recession slowed things temporarily, but the past three years have seen doubledigit growth in the U.S., according to our data.” A 2012 survey by StevensGouldPincus, a merger and management consulting company specializing in PR, AVERAGE hourly found that billing rate at billing rates financial-publicity tend to be firms, 2011 highest among PR firms focused on AVERAGE hourly sports/enterbilling rate at tainment, sports-publicity health care and firms, 2011 public affairs. Source: StevensGouldDukas PubPincus data on flat rates charged when workers of lic Relations— varying seniority levels participate in a project which had clients in a variety of industries, including the financial sector—began narrowing its focus to financial services about two years ago. Now the firm works with hedge funds, mutual funds, exchange-traded funds, investment banks and wealth advisory firms. “For us, as a small firm aspiring to be a midsize firm, this is good way $201 $195 to go—you can’t be all things to all people,” said Richard Dukas, president of the profitable agency, which has 16 employees and had about $3.5 million in revenue last year.“It’s hard to compete against the Edelmans, Rubensteins and Ruder Finns of the world if you don’t have expertise in a particular area. Now we do compete with large firms and other specialty firms—and we often win in finance—because we are experts in that area.” Round-the-clock service About two years ago, Ron Gold, president of Marketing Works, a public-relations firm with offices in Manhattan and Long Island, began focusing more of his company’s resources on the nonprofit arena. He becomes an integral part of the nonprofit client’s team and makes himself available around the clock. “A larger firm does not give that kind of personalized service,” said Mr. Gold, whose profitable business has three employees and about $500,000 in annual revenue. In two years he’s added 10 clients, mostly nonprofits, largely through referrals. Revenue is growing at 25% a year, according to catherine gibbons Owning a niche helps small local outfits compete against the big guys—and grow REFOCUSED: Elliott Suthers’ firm, Spector & Associates, is going after high-tech, defense and health care work to gain an edge. Mr. Gold. “We recently teamed up with an Internet marketing firm that specializes in nonprofits and won the contract for the Institute for Community Living,” he said. “We beat out high-profile New York PR firms because of the accounts we both had in the industry.” It’s hard to spin it better than that. Ⅲ To sign up for Crain’s SMALL BUSINESS newsletter, go to www.crainsnewyork.com/smallbiz. http://www.crainsnewyork.com/smallbiz http://www.crainsnewyork.com/events-GoPrace

Table of Contents for the Digital Edition of Crains New York - February 18, 2013

DIGITAL NY
IN THE BOROUGHS
IN THE MARKETS
the insider
BUSINESS PEOPLE
OPINION
GREG DAVID
SMALL BUSINESS
REPORT: REAL ESTATE
THE LIST
CLASSIFIEDS
FOR THE RECORD
NEW YORK, NEW YORK
SOURCE SNACK
OUT AND ABOUT
SNAPS

Crains New York - February 18, 2013