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PR Firms Getting More Work, Turning to Outsourcing in Tight Job Market

The county’s 36 largest public relations firms grew their fee income 26% to $59.9 million for the 12 months ended March 31, but also shrunk their professional staffs 2% as they moved to outsource new business in a tight job market.

The Business Journal list ranks the PR shops by OC fee income. The aggregate numbers exclude those fee-income figures that are Business Journal estimates.

Two of the top three PR firms on this year’s list are now subsidiaries of larger global operations.

Benjamin Group/BSMG Worldwide, Irvine, a high-tech specialist whose accounts include Toshiba, Ingram Micro and Kingston Technologies, maintained its No. 1 standing with a 39% rise in fee income to $5.5 million.

BSMG Worldwide, a wholly owned subsidiary of True North Communications, acquired the Benjamin Group’s offices in OC and Silicon Valley in July.

Newcomer NeoBrands, a high-tech-oriented spin-off from Shafer Public Relations, debuts at No. 2 with fee income of $4.2 million. Meanwhile, Shafer, which ranked No. 9 on last year’s list, dropped 64% to $700,000 in fee income and the No. 32 spot this year.

Tied at No. 3, NCG Porter Novelli (formerly Nelson Communications Group) in Irvine has estimated fees of $3.5 million. Porter Novelli, the world’s third-largest PR firm, acquired the privately held OC-based Nelson’s three offices in December.

Also at No. 3, Paine & Associates in Costa Mesa showed the biggest gain in fee income among the five largest firms, growing 44% to $3.5 million and moving up three notches on the strength of an expanding client roster.

Mixed Results

Fourteen agencies showed double-digit growth. On the other hand, four had declines, and seven were flat.

Agencies that moved off the list were last year’s No. 35, Brower, Miller & Cole Inc., Newport Beach, whose billings were up 4% to $680,000 and Fisher Business Communications, Irvine, down 64% in fee income to $400,000. FBC President Robert J. Fisher, who founded the firm 14 years ago, sold his business to Seattle-based Creative Works. The new Creative Works agency, headed by CEO Ron Wilbur, has a new list of clients that includes Edison Carrier Solution, Smart Contractor and MAG Technologies Inc.

Freeman/McCue, Santa Ana, grew 16% to $2.9 million in fee income from clients such as Kawasaki, Isuzu, Flashcom and Lot Polish Airways, but nevertheless dropped two slots to No. 6.

Big Gains

No. 9 Waters & Faubel Inc., Newport Beach, which handles PR for cities and other governmental entities such as the Irvine Ranch Water District, reported the biggest gain on the list, up 118% to $2.4 million. The agency moved up 18 notches from last year.

The firm benefitted from spending by El Toro airport foes in advance of the Measure F vote in March and the addition of new clients, principal Meg Waters said. The firm was able to more than double its revenue without adding staff by using outsourcing, she added.

“We think we will have at least a 25% growth this year without adding staff,” Waters said.

Other top gainers were No. 11 Larson Group, Irvine, up 77% to $2.3 million; and No. 23 T & O; Public Relations, Irvine, up 65% to $1.3 million.

In addition to NeoBrands, newcomers to the list are No. 13 Creamer Dickson Basford, Irvine, with $2.1 million in fee income; and No. 34 The Rankin Group Ltd., Tustin, with $800,000.

CDB, whose headquarters are in New York, is a subsidiary of Havas Advertising. The firm opened an office in OC four years ago.

No. 7 Frank Wilson & Associates Inc. in Laguna Hills, dropped three notches with fee income of $2.6 million. The firm has also found the job market tight, Frank Wilson said.

“We recently placed a job listing in PR Week and we were advised that the market is really, really tight so we shouldn’t talk about our company’s benefits, but talk about what a great place it is to work,” Wilson said.

The trade publication’s classified section advised him to lure potential hires by talking about perks such as lunches, movies, golfing and team activities, he said.

Wilson’s strategy is to maintain a core staff and use a lot of outside resources to get the job done.

“Our head count has remained steady or fallen because we have gone out and used seasoned consultants and freelancers, rather than carry a big overhead and constant recruiting,” Wilson said.

This year business is picking up, Wilson said.

“We’ve billed close to $2 million already this year we are going to have a dynamite year,” he said.


Survey Finds Small Firms

Facing Recruitment ‘Challenges’

Small businesses are stepping up their recruiting efforts, turning to the Internet to generate leads as well as using traditional means such as advertising and using professional recruiting or staffing services.

More than half of 200 small businesses (up to 500 employees) surveyed expressed they had recruiting “challenges,” according to a survey recently released by Sage Software, Irvine.

Like medium-size to large businesses, small businesses are offering higher salaries. Forty-two percent of the businesses said they paid more money to new hires. They also paid higher signing bonuses (18%) and increased fringe benefits (16%).

To keep people around longer businesses are adding employee bonus plans, offering training programs and allowing flextime, among other things.

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