PR firms shift tactics in post-merger H'wood

Corporate clients gaining importance

It's not just Hollywood studios and talent agencies that get roiled and restructured by mergers. The spin-meisters themselves, whose billings are under pressure and whose star clients' lives are under ever-increasing scrutiny, are undergoing their own shake-out.

As a result, two decidedly different strategies are emerging.

The latest amalgam is the melding of two of Interpublic's stand-alone public-relations powerhouses, PMK and BNC, which two months ago saw PR poobahs Michael Nyman and Chris Robichaud get bigger roles and several other high-profile players -- including the HBH troika of Stephen Huvane, Robin Baum and Simon Halls -- pick up and leave. Also upped in the combo was Cindi Berger, who ascended to chairman and CEO, completing a double-decade rise from her original role as a PMK receptionist.

The rationale for combining the firms? Given this is the PR world, that depends on whom you ask.

Cindi Berger
 

Nyman asserts his "aggressive" evolution of BNC's model to position it "on the attack" prompted Interpublic to reward the entity, and the parent acknowledged BNC's toppers in the merger: Nyman became a chairman-CEO and Robichaud a CEO. Others say the consolidation was simple business logic, given the global financial downturn and Interpublic's challenged 2009 balance sheet.

Stan Rosenfield, whose firm reps George Clooney, Robert De Niro and Helen Mirren, speculates that Interpublic's purchases of PR firms PMK, HBH, BNC and Rogers & Cowan 10-odd years ago were designed to give its ad agencies better access to talent.

"I don't know if that happened as publicists are not in place to make business deals for their clients -- their talent agents are," he says. "But companies like BNC have a huge corporate position, and corporate people are attracted by the loss leaders of big-name talent."

However, he adds: "The same people who were representing the same talent three months ago are still repping the same people. The only thing that's changed is the name of the companies doing the business."

Nyman stresses the "massive" value in integrating BNC's specialized departments with the talent reps at PMK.

"Technological changes have changed the way consumers receive content and consume it," he says. "We're on the road to a new normal. Celebrity- and entertainment-based media continues to be a popular media segment, and the talent need the resources around them to not only help them navigate traditional media but a strategy to manage the 24/7 of new-media coverage."

Being part of a bigger agency where branding is the buzz word doesn't sit well with everyone, however. Five talent publicists exited the fold, taking with them dozens of name clients. The departures raised eyebrows.

Huvane, Baum and Halls joined former ID executive vp Ina Treciokas to hang out a new shingle, Slate, a move Halls describes as back to basics.

"We are now virtually what we were as Huvane Baum Halls before we merged with PMK," he says.

Halls describes Slate's rationale thusly: "We've got no interest in corporate brand clients and product placement or any of the marketing stuff that BNC is good at. We're focused on looking after talent and clients' careers, and that's the road map that we have." (Treciokas' departure in 2008 from Kelly Bush's brand-minded ID was motivated similarly.)

Melissa Kates
 

Following a somewhat different logic, two other PMK veterans, Melissa Kates and Jennifer Allen, have set up a company called Viewpoint. Unlike Slate's focused approach, Viewpoint, Kates says, will aim not only to consolidate efforts around a current list but also to become "a true destination for talent. We have every intention of growing."

Kates also believes the star defections from PMK/HBH will dim PMK-BNC's luster. (They started even before the December merger: In January 2009, Joy Fehily took Gerard Butler, McG, Aaron Sorkin and Olivia Wilde to Prime; the next month, Jenn Plante and Erica Tarin moved to ID with Laura Linney, Stanley Tucci, Forest Whitaker and Patrick Wilson in tow.)

There were other potentially costly departures, too, as the firms were mashed together.

Corporate publicists Victoria Harvie and Dan Strickford left to join ID, taking with them clients Mercedes-Benz, eBay, Neutrogena and Netflix. Although those clients might have presented potential conflicts with existing BNC clients -- Audi, Amazon, MAC Cosmetics and Nintendo -- big brand losses represent a lot of moolah for PMK-BNC.

Meanwhile, event publicist Andy Gelb, who accounted for very rich fees, also exited, joining Slate.

Nyman admits the departures were "disappointing." But, he added, "they probably looked like a bigger deal than they really were because we were aware of how things were likely to shake out with regards to who was in and who was out."

There are plenty who are in: With 100 staff in Los Angeles and a bolstered New York office of about 50, not to mention PMK's longtime cachet in entertainment PR, the combo is a force with which to be reckoned.

In fact, PMK-BNC could be the prototype for a new, more vertically integrated PR firm, analogous to a major talent agency with its various related activities and economies of scale.

The combined billings of PMK/HBH and BNC (about $70 million) likely make it the largest entertainment PR firm in the U.S., though its contributions accounted for only 1% of Interpublic's 2008 revenue.

Other globally minded, departmentalized, bicoastal firms it will compete with include Interpublic's other PR stalwart, Rogers & Cowan, as well as BWR, ID, 5WPR, Platform Media and Leslee Dart's 42West.

Michael Nyman
 

These "majors" hope eventually to outpace such local Los Angeles "indie" outfits as those run by Nancy Iannios, Nancy Seltzer, Susan Patricola, David Lust and Rosenfield as well as banners including Prime, Pinnacle, WKT, Slate and Viewpoint.

Berger certainly thinks so. "For PMK, this merger was a very good idea," she says. "The corporate department, given their fees, allows us to work on established talent and on young stars moving up in their own careers."

Although traditional and new-media outlets are as accessible to smaller firms, Berger adds, larger entities have the experienced personnel to offer clients distinct digital and television departments, as well as event and promotional resources managed by their colleagues and through which celebrities can be guided personally.

Consider the money: Talent flacks typically receive $5,000 a month to represent star clients, but corporate clients can fork over six-figure sums for brand management, product integration, communication strategy, targeted marketing, promotions and event management. Just one large corporate account could equal the revenue lost from 20 exiting star clients.

For up-and-coming talent, a multifaceted flackery can more easily leverage offerings across departments -- and those up-and-comers who continue to get jobs and recognition via the hard work of their PR agency are likely to retain their reps. (Still, in some instances, they might feel they're waiting for too many better-known clients at the same firm to say no before their names come up.)

Not surprisingly, indie PR outfits feel they have advantages in this shifting landscape because of their laser focus on clients and ability to devote time to the task of public relations. They point out that they don't have to endlessly explain the economics of their actions to a parent company, attend to corporate protocol or rely on staff members whose interests in the business are limited by the fact that they have no ownership stake.

In short, Kates relishes the prospect of her and Allen's ability "to take a chance and build something for ourselves."

Success, though, often is limited to the ongoing ability of a specific publicist to serve a specific client. Unlike bigger firms, indie shops are more vulnerable to the everyday limitations and idiosyncrasies of the people at the core of these relationships with talent.
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