Magazine article Marketing

PR Hits the Highest Points of Success

Magazine article Marketing

PR Hits the Highest Points of Success

Article excerpt

Public relations agencies are undergoing fast transformations fuelled by new media, a spate of takeovers, and a serious approach to corporate reputations at board level.

Three major themes dominate developments across the agency sectors. In no particular order, they are the impact of the internet, digital technology and e-commerce, the competition to be accepted as a boardroom consultant rather than a mere supplier, and the takeovers and merger wave.

All three apply to public relations, only more so. Electronic communications have changed PR in many ways, from advising clients on strategy, publicising web sites, distributing press releases by e-mail and 'virtual' press conferences via the internet.

One aspect of this is the need to monitor what's being said about clients in web discussion forums. Malicious gossip and criticism, can take hold like a forest fire if they are not countered (see Microsoft panel).

Just how important digital communications have become can be judged from the fact that the Public Relations Consultants Association's new 'futures group' is commissioning original research on the topic.

On the consultancy front, meanwhile, several of the biggest agencies, including Shandwick, Burson-Marsteller and Hill and Knowlton, are getting excited about new ways of looking at corporate reputation.

Business school academics, such as Professor Charles Fombrun, of New York University, a consultant to Shandwick, argue that reputation can be directly linked to share price.

Corporate reputation has been expanded to embrace relations with investors, the media, customers, suppliers, staff and the community.

Improving reputation

If CEOs accept this, it could become the big growth area for PR agencies, which claim the role of enhancing and protecting corporate reputation as their own. As the head of one leading agency puts it. "Chief executives and chairmen are acutely aware that the regard in which their companies are held can be the key that unlocks so much that is important to them, from share price to getting shelf space in supermarkets."

One significant change readers may notice between this table and the one published by Marketing on 27 May is the inclusion in the top slot of Bell Pottinger Public Relations.

The explanation is that Lord Bell, chairman of the publicly quoted holding group, Chime Communications, is unwilling to provide a breakdown of turnover between different specialisms, which is a requirement for the Marketing Top 150. His argument is that he cannot provide the magazine with information he doesn't also supply to the City and shareholders. As he admits, he's also reluctant to give too much away to competitors.

Bell Pottinger has been a major player since its formation, but it moves to number one for the first time, thanks to a sparkling growth performance in 1998 -- an extra 27% in income -- when its major competitors were focused elsewhere. Citigate and Dewe Rogerson were merging, while Shandwick, newly acquired by Interpublic, was restructuring.

Lord Bell claims not to enjoy heading the league table. "The only reason I don't like to be number one is because of history," he says. "I used to run Saatchis and when we hit number one everyone stopped working. Once you have hit a goal, people relax."

However, there's no sign that he's run out of ambition. "We don't have more than a single digit share of PR, and there is no earthly reason why we could not have 20%. Most markets consist of three or four big players and a host of small ones."

Following last year's acquisition of ad agency Howell Henry, the group has restructured into five businesses, including two PR specialists - Bell Pottinger and Good Relations.

PR has not been immune from the attentions of the big marketing communications groups such as Omnicom, WPP and Interpublic. In fact, there are now only two independents in the top 20--financial specialist College Hill, and Key Communications. …

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