Recession steals PR and ad agency jobs

But some firms are still hiring as downturn strikes uneven blows

The recession is hitting Triangle public relations and advertising agencies, which have been cutting jobs as clients reduce their spending.

In the past month, Raleigh's Capstrat laid off six workers, and Durham's McKinney, the Triangle's largest ad agency, let go of eight. "The economy is affecting everybody, and we have to adjust for that," said David Chatham, senior vice president at Capstrat. The firm now has 87 employees.

Chatham said 2008 was Capstrat's "best year ever" in terms of revenue, but business slowed during the past three months as the economy soured and clients cut their spending budgets.

"I think people are accepting the fact that this is a down economy, and they're planning for that, but they understand they can't stop communicating," he said.

Chatham said the early signs for client spending in 2009 look more positive. But also said, "I can't say that we have seen a bottom, because I don't know that."

Capstrat's clients include Blue Cross and Blue Shield of North Carolina, RBC Bank, Rex Healthcare and the UNC Health Care System.

McKinney has 160 employees after letting eight people go after Thanksgiving. The cuts were prompted by reduced client spending and "taking a conservative look at what is ahead," said CEO Brad Brinegar.

McKinney's clients include Travelocity, Coldwell Banker Real Estate Corp., Gold's Gym and Southern Comfort. Brinegar said that "in general, our business is strong," but he's hesitant to make projections for 2009 because the economic picture is so uncertain.

"It could improve dramatically in the next couple of months ... and it could get tougher," he said. "None of us really know."

FWV Distilled, the advertising affiliate of Raleigh public relations firm French/West/Vaughan, eliminated two jobs a couple of months ago when revenue dipped, but the addition of three new clients since then enabled the firm to hire two new workers. Today FWV Distilled has eight employees, not counting administrative staff it shares with French/West.

FWV Distilled's business was boosted recently by the addition of new clients, including a start-up brewery in Kinston, Mother Earth Brewing Co., and Intrahealth International, a Chapel Hill nonprofit that promotes health in impoverished countries, said Adam Cohen, executive creative director. The agency's clients also include AstroTurf and the CIAA, or Central Intercollegiate Athletic Association.

French/West, which has a total of 77 workers, laid off one employee in New York about a month ago. The agency hasn't had any layoffs locally, and the firm plans to add to its New York staff after winning two major PR accounts in December, said CEO Rick French, who did not identify the new clients.

French/West's revenue for 2008 is up 9 percent to about $14 million, French said. Although many clients have been slow to set their spending plans for 2009, he expects that revenue will continue to grow. French/West's clients include Coca-Cola, Speedo, Wrangler and Capital One.

In the spring, Catevo Group, which was formed in 2006 through a merger of public relations firm Epley Associates and business consulting group Digiton, shed some non-communications functions and eliminated eight jobs. Since June 1, however, it has added five workers.

"We feel pretty optimistic right now," said Roger Friedensen, Catevo senior vice president. "We've received a number of new assignments from both current and new clients and, given the fact that we went through our restructuring six months ago, we're confident that we're well-positioned heading into 2009."

Catevo now has 40 employees.

Some agencies haven't missed a beat despite the recession.

Raleigh public relations firm MMI Associates added two employees in the past two months, giving it a total of 14 full-time workers, after adding a pair of new clients, said Ryal Curtis, senior account executive. The new clients: the Council for Entrepreneurial Development and Wake County Economic Development.

MedThink Communications, a 60-person Raleigh agency that focuses on pharmaceutical and medical clients, added three employees in December and expects to hire more in 2009, said Scott Goudy, partner and co-founder. If the agency's forecasts for 2009 are on the money, it would add 10 to 15 employees next year.

"The health care field isn't recession-proof, but I think it is more insulated from the recession" than most industries, Goudy said. The agency's clients include Salix Pharmaceuticals, United Therapeutics, Talecris Biotherapeutics and Teva Pharmaceutical.