Rogers & Cowan retains No. 1 ranking on list of largest PR agencies in L.A. County.

Rogers & Cowan retains No. 1 ranking on list of largest PR agencies in L.A. County

The PR agency whose founder made Rita Hayworth famous remained the biggest public relations operation in Los Angeles County in 1989, according to the Business Journal's annual survey of county PR agencies.

Century City-based Rogers & Cowan, whose 76-year-old co-founder Henry Rogers recalls the days when Hollywood publicists "made up stories out of thin air," posted $9.5 million in billings for 1989.

Hill and Knowlton with $5.7 million in billings placed second on the list; third place went to Manning, Selvage & Lee with $4.5 million. The billings represent fees the agencies received for professional services but do not include reimbursement for out-of-pocket expenses like travel, postage, or the cost of printing promotional materials.

The survey showed the growth of the public relations industry in Los Angeles. Fifteen of the agencies reported $2 million or more in yearly billings, a plateau that only a few had reached as recently as several years ago. Billings of the 25 largest agencies on the list totaled more than $63.5 million, an increase of about $1 million from the year before.

Branches of agencies based in the East and Midwest -- Hill and Knowlton, Manning, Selvage & Lee and Fleishman Hillard -- occupied three of the top four spots on the list. But Rogers & Cowan and other agencies that began in Los Angeles, although some of them have since been acquired by eastern owners, represented 19 of the 25 biggest firms.

This year's list includes 35 agencies instead of the 25 the Business Journal has published in other years. For the first time, the survey indicated the growth in agencies specializing in Hispanic public relations. Moya, Villanueva and Durazo, while not large enough to qualify for the list, ranked 38th on the survey with $710,000 in 1989 billings.

The list also indicates the significance of the entertainment business in the Los Angeles PR industry. Besides Rogers & Cowan, four others of the 25 largest agencies specialize in entertainment industry public relations.

Rogers, who co-founded Rogers & Cowan with Warren Cowan in 1950, traces his history in the business to the 1930s and 1940s, when he launched the career of Rita Hayworth.

He said his big break was maneuvering the young Hayworth into a cover photo and 10 inside pages of Look magazine. Getting that kind of magazine exposure in those pre-television days did wonders for Hayworth's career, but Rogers said reports of his making Hayworth a star may be somewhat exaggerated.

"This was a case of the right actress getting together with the right press agent at the right time," Rogers said. He said that when people credit him with making Hayworth a star, he has a ready reply: "I didn't make her a star. She made me a star."

Rogers and Dick Taylor, president and chief executive officer of Rogers & Cowan, say the PR business and the agency have both changed considerably since the days when the agency concentrated on Hollywood clients.

Rogers & Cowan today derives 40 percent of its yearly billings from corporate clients, Taylor said, and the agency plans within three years to derive 50 percent of its business from the corporate side. Taylor said the agency's entertainment industry connections, however, "add some extra pizzazz" it can offer to corporate clients.

Taylor, who has been with the agency for 10 years, said even the entertainment industry portion of its business has changed. Long ago it was just publicity for movies and movie stars, but the company today represents film companies, television shows and production companies, and a host of other clients in music and other facets of the industry.

Taylor and Rogers both say the industry is much more credible, professional and sophisticated than it was in the era of Hollywood publicists. But the industry today still remains widely misunderstood. Ron Hartwig, who heads the Hill and Knowlton office here, said the misunderstanding often surfaces when he tells people what he does for a living.

"When I'm introduced to someone and they find out I'm in public relations, the first thing they say is, `Oh, so you do advertising,'" Hartwig said.

Some public relations people in fact do advertising work, and vice versa, but the number is small and the two professions demand distinctly different sets of skills. Advertising people create messages that their clients pay to have placed in various media. Public relations people try to persuade the press to write or broadcast stories about their clients, but there is no guarantee the press will do so.

Keeping clients in or out of the public eye is the aspect of PR that's easiest for most people to understand, but public relations involves much more than working with the news media, Hartwig explains. He lists a number of sub-specialities in public relations that Hill and Knowlton offers, a list that is typical of full-service PR agencies:

* Marketing communications, sometimes called marketing public relations, which is designed to generate publicity in support of a consumer product or service.

* Investor relations, sometimes also called financial relations, which entails working with the news media to report the financial results of publicly held companies but also working with financial analysts and shareholders to tell a company's fiscal story.

* Public affairs, also sometimes called government relations, which involves communicating to the world about political, social and environmental issues.

* Corporate relations, which has to do with supporting the corporate image of a company as opposed to the image of a specific product or service. This includes community relations, which is designed to burnish the client's image as a good corporate citizen.

* General corporate counsel. Hartwig said this category includes crisis communications, employee communications and other specialties that might be listed as separate categories by some agencies. He said Hill and Knowlton also has a desktop publishing division that produces newsletters and other publications for clients, and a Japanese business division advising Japan-based clients.

Hartwig said the increased billings of L.A. agencies reflect the growth and maturity of the PR market here. He said Los Angeles clients at one time were interested mainly in hiring PR agencies for short-term, one-time projects, but clients today are more likely to make an ongoing commitment to PR.

About 85 percent of the billings at Hill and Knowlton's L.A. office are generated by Los Angeles clients, Hartwig said, a big change from the late 1960s, when the L.A. branch of his agency existed "largely as a service bureau for New York."

Hartwig said typical corporate clients in the L.A. public relations industry now pay fees of between $5,000 and $10,000 per month. Some PR campaigns also require the spending of substantial amounts for out-of-pocket expenses. Agencies typically prepare "media kits" for their clients that include biographies of top executives, background information on the company and descriptions of its products. Some also prepare videotapes and other materials aimed at television or radio, but Hartwig said the print media kit "is still the bread and butter of our business."

Some of the PR agencies on this year's list provide Hispanic public relations, but Moya, Villanueva and Durazo is the first Hispanic public relations specialist to place high in the survey.

Partner Ray Durazo said the agency's growth is a sign that corporations are realizing the importance of the Hispanic market. Durazo said Hispanic public relations generally involves an Anglo company trying to reach the Hispanic market. The Saturn division of General Motors, for example, hired his agency to promote its cars to the Hispanic market.

Another client is Anheuser Busch, which hired Moya, Villanueva and Durazo on behalf of the National Hispanic Scholarship Fund, which Durazo defines as "the Hispanic equivalent of the United Negro College Fund."

The Hispanic Fund's problem, Durazo said, is that it lacks the high profile of the United Negro College Fund. So Anheuser Busch hired his agency to produce an eight-minute video and other materials explaining the Hispanic fund. Executives from Moya, Villanueva and Durazo then accompanied representatives of the Hispanic fund to meetings with public affairs directors, foundation executives and other influential types to spread the word about the Hispanic scholarship fund. Durazo said the meetings were done in "a very low-key, non-selling kind of way to familiarize corporate America with what the fund is and what it does." He noted the PR campaign for the fund is an example of one of many types of public relations that are not visible to the general public.

Such subtle approaches illustrate the wide variety of activities that fall under the umbrella called public relations. They also show how much the PR industry has changed since the halcyon days of the Hollywood publicist.

Rogers, for example, recalls how Hollywood PR people fabricated "events" to get their clients' names in the paper.

Rogers says he once made up a story about an actor client, the late Dick Purcell. He told a newspaper columnist that Purcell had wrecked his car, almost was killed, and couldn't make it to work the next day on the movie he was filming.

Rogers happened to be on his honeymoon soon thereafter when the columnist used the made-up story, which ran under a six-column headline. Rogers later called to thank the columnist, who told him: "Henry, that column was my wedding present to you."

Rogers says such fairy tales wouldn't get printed today. "The first thing a good journalist would do today would be to check out the story. In those days, untrue publicity stories were an accepted fact of the movie business."

Rogers says the fabrications were "harmless stories designed to get the clients' names in the paper." The manufactured story died long ago, he says, and it's probably just as well because little thought went into whether the stories actually did the clients any good. He says the columnist probably knew the stories were untrue, but there were seven daily newspapers in L.A. with columns to fill, so it was a heyday for columnists and publicists alike.

"In those days our primary objective was to get the client's name in the paper. Later, we decided there was more to the business than that. We became career builders and career managers," he says.

The industry still has a credibility problem in terms of how big some agencies really are. Jack O'Dwyer, who publishes a national newsletter of the PR industry, has a full page of rules that agencies must follow if they are to be included in his rankings of agencies. The rules are the result of the lies some agencies traditionally have told about their size: PR executives in L.A. have often complained to Business Journal editors that competitors exaggerate billings to make themselves look bigger and hence rise higher on listings like O'Dwyer's and the Business Journal's.

The Business Journal's list is based on a survey sent to the agencies and depends on the agencies to be honest. O'Dwyer's set of rules explain the documentation agencies must submit if they are to be considered for his list. The question of who's exaggerating billings "is still a hot topic" 22 years after he began publishing his newsletter, O'Dwyer said.