Harold Burson's Blog
1/26/2010 12:24 PM
The Economist, arguably the most respected of all global business periodicals, recently devoted a full page (January 16, 2010 issue) to the public relations business. It titled its article:
Other Firms’ Suffering has Bolstered the Public-Relations Business
The article is perhaps the most positive assessment of public relations in a major business publication in the past twenty years. Its special significance for public relations is that in about a thousand words of copy there is nary an appearance of the words “flack” or “spin” – nary an allegation that public relations professionals “obfuscate,” “whitewash” or are otherwise less than truthful.
In effect, the thrust of the article is that corporate CEOs (it’s also true of not-for-profits) increasingly recognize that public relations strategies and tactics can be effective in solving problems – especially in a time of economic adversity. It also positions public relations as the discipline most involved in capitalizing on the overwhelming versatility of the internet.
But the article actually understates the substantial role of public relations in the global economy. It treats only that portion of public relations activity handled by public relations/communications firms. The estimated amount spent on public relations in the U.S. in 2009 is put at $3.7 billion, an increase of nearly 3 per cent over the previous year. That figure includes only the fee income received by public relations firms for services provided in the U.S. It does not include out-of-pocket disbursements covering implementation costs of campaigns and programs or, even more significant, the monies expended by corporate or institutional or governmental internal public relations/public affairs/communications departments.
There are no reliable estimates on the totality of public relations expenditures in this country or elsewhere. Nor is there a clear-cut description of what activities fall within the rubric of public relations/communications. For example, some corporations include public affairs or government relations (lobbying) in their public relations budgets. Some regard corporate philanthropy as a subset of public relations. For various reasons, many corporations are skittish about disclosing their total expenditures on public relations.
But an educated (and conservative) guess is that the internal “spend” on public relations/communications is at least three to four times the amount spent with outside public relations/communications firms. That means the total U.S spend for services falling within the public relations classification is now in the $15/20 billion range – and growing year-to-year. One example of the industry’s growth: the annual revenues of the largest global public relations firms today approach a half-billion dollars, roughly half of that amount generated in the U.S. and half abroad.*
While the article correctly points out that “the rise of the internet and social media has given PR a big boost,” it repeats the myth that “PR has done well in part because it is often cheaper than mass advertising campaigns.” While some public relations professionals would concur, the fact is that no experienced marketer of a nationally or globally distributed consumer product would ever depend totally or even predominantly on public relations to sustain supermarket sales day-after-day, week-after-week, month-after-month. Paid advertising – both electronic and print – plays a specific and irreplaceable role in motivating customers to favor one product over another. Public relations can play an important support role in making paid advertising more credible, give it broader reach and an implied “third party endorsement” benefit. It’s seldom a case of either/or; the most effective result is usually a combination of the two – and that’s happening more and more.
As with other articles in broadly-based media, the Economist also views public relations as near totally media-centric – that the role of public relations is to obtain “free publicity.” While clippings and air time and mentions on blogs and the internet’s social sites are indeed important, significantly less than half the money spent for public relations is aimed at the media. In fact, monies expended on developing strategies in the public affairs area are probably more a factor in the growth in public relations than the advent of the internet (which itself has a role in seeking public relations objectives as well as achieving sales goals). Other significant growth areas ignored by the general media are internal communications and programs that derive from public demands that corporations be more socially responsible, i.e. the green movement is just one example. Thousands and thousands of hours are invested by public relations developing programs – strategies and tactics – that address these intangible issues that are transforming the way companies do business.
These observations are in no way intended to be critical of those who report on public relations in the general media. Instead, its intention is to remind fellow practitioners that we in public relations continue to suffer the fate of the cobbler’s children. We’re so busy explaining the businesses of our employers and clients that we have had no time to explain the role of public relations in today’s complex economic and social environments.
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* When Burson-Marsteller became the world’s largest firm in 1983, our worldwide revenue was $63.8 million – which translates into eight-fold growth in the past quarter-century for those public relations firms that are now at the top of the heap. 12/8/2009 11:00 AMAs the end nears for the first full year of the first global recession and the deepest U.S. economic downturn since the 1930s, taking time to assess its impact on the public relations/communications function seems worth while to both fellow practitioners and our employers and clients. As with most cataclysmic events (when trillions of dollars and millions of jobs are at stake, “cataclysmic” is an appropriate adjective), this one had its good news as well as its bad.
The best of the good news is confirmation that public relations/communications is accepted as a critical and necessary component of the management function. Unlike the dozen previous recessions I have experienced over the past half century, staff and budget reductions were much less severe. In earlier recessions, management’s knee-jerk reaction (both public and private sector) was to reduce the public relations staff by half with corresponding budget cuts at the first hint of a slowing economy. Other than such hard-hit industry categories as financial services, real estate, automobiles and not-for-profits (and, of course, agencies serving them), that did not happen in the present ongoing recession. Many employers cut staff, but often by a single digit percentage, and professionals and staffers leaving voluntarily were likely not replaced. The public relations/ communications “environment” was slowed down, but not nearly as much as in previous recessionary periods.
Many corporations and not-for-profits used the depressed economy to reassess its public relations/communications mission and its real value to the enterprise. In many such cases, the staff and its involvement in management policy making were actually upgraded. Recruiting specialists tell me their business has picked up considerably since September and many assignments have the objective of upgrading staff.
The recession also caused public relations professionals at both internal public relations/communications departments and agencies to evaluate the value of their programs and offerings. Traditional media frequently gave way to digital with the end result delivering more precisely targeted information more effectively communicated at a lower cost.
Another significant good news by-product of the overlapping recession with the coming of the internet is that many more journalists are entering the public relations/communications ranks. Having lost their traditional media jobs, they are now turning to public agencies and the corporate and not-for-profit sectors as outlets for their talents. This, I believe, is especially good news for the public relations/communications function. It should, as time goes on, have a positive effect on the quality of writing in our industry.*
Best of all is that the forced curtailment of advertising, sponsorships and other more costly marketing initiatives has caused marketing executives to be more receptive to employing public relations strategies and tactics to achieve their sales goals and enhance their brands in the marketplace. Although it’s foolish to assume that public relations initiatives can ever replace paid advertising and other traditional marketing initiatives, there is ample hope that this recession has helped public relations gain a permanent niche in the marketing mix.
What’s the downside of the recession, the bad news?
Mainly, it has rendered public relations/communications a negative growth business for at least two years. Hiring has, in effect, been frozen. That means that thousands of talented college graduates have been unable to obtain employment in public relations. A great number will be forever detoured away from public relations and that is a loss that will be felt ten to twenty years from now. Another adversely affected group are those who were victims of downsizing, many highly capable with years of experience. Many will turn to other occupations and that, too, will be a loss.
As for the longer term future, I am optimistic about the role of public relations as a management function. The need for establishing and maintaining reputation – a good name -- has never been greater; or the need to differentiate a company or a brand from its competitors. More than ever, I believe behavior is the all important metric against which all manner of institutions will be measured and rewarded. Call it what you will, public relations will be a major force in the creation and communication of corporate values and brand attributes.
The rappers have it right: if you’re gonna talk-the-talk, you gotta walk-the-walk.
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*For purposes of full disclosure: my first job was as a newspaper reporter. I have always believed reporting for a newspaper (preferably newspapers too small to have rewrite staff) is the best training for a job in public relations. It may be of interest to learn that, pre-1975 or thereabouts, most large agencies and corporate employers wouldn’t interview employee candidates lacking solid news experience. 10/30/2009 11:00 AM
A recent website question aimed at public relations professionals (and, presumably, their bosses) was “What’s the role of public relations when traditional media die?”
Obviously, the person posing such a question has little or no understanding of what public relations is or what tasks are implemented under the rubric of public relations. The tragedy is that such questions have been asked before.
Public relations is not of the same specie as the internet; it is not a media format that packages and delivers information in a form that appeals to a certain target audience. The internet is a vehicle, the hardware so to speak, that disseminates information. It’s in the same category as the printing press, movies, radio, broadcast television and cable television. Social media are the 21st Century counterparts of style pages, columns, how-to articles, radio talk shows and television specials.
As for public relations, I look at it as the applied social science which deals with influencing behavior and deploying information to motivate a defined audience to a specific course of action -- to support a certain point of view, choose one automobile over another, trust one bank over others and vote for one candidate rather than another.
In doing so, the public relations professional helps hone the messages that will be most persuasive to the audience and selects the media (usually a mix of media) that will deliver the messages most credibly and economically. It goes without question that this process take place within the context of uncompromised dedication to truth and transparency.
That in a few words is the essence of public relations. It should also be noted that public relations has many subsets. Publicity is likely the one most recognized by professionals and the public. Nowadays often referred to as “earned space” (print) and earned time (electronic), publicity also is sought on internet websites including social media. Other subsets are employee relations, investor relations, marketing support, litigation support, communications training, crisis management, etc., etc.
There are still a few of us around who remember the coming of television in the 1950s. Back then most public relations professionals were former newspaper or press association reporters. For the most part, we dealt with print media – radio seemed always to have a secondary role in the publicity mix. But we soon realized the potential of television to reach the audiences of interest to our employers and clients. It took a good ten years for most of us, both in-house and agency publicists, to feel comfortable working with television producers. And ever since television has been an important delivery vehicle for public relations practitioners.
Just as television, for the better part of a decade, was a work in progress so is the internet. It would be as foolish to question its ubique power and reach as to ignore its potential pitfalls, not the least of which are its threat to privacy and, at times, its lack of credibility.
But make no mistake about the role of public relations professionals in this ongoing process of capitalizing on the best of the internet and minimizing any pitfalls. The domain of the internet as an information dissemination vehicle is ours to lose.
Put another way, there well may be people other than today’s public relations/communications specialists responsible in the future for what goes on the internet, but regardless of their identity and experience, what they do will still be a subset of the public relations function.
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Harold Burson
October 30, 2009
9/17/2009 3:47 PM
For almost half a century, the Peter, Paul and Mary trio endured as one of the world’s best known folk-singer group. For pioneer B-Mers (going back to the late 1950s and 60s) the success and acclaim of Peter, Paul and Mary has had special significance. For four years Mary – Mary Travers – was a colleague in our then small (about 35 people) New York office; she attracted special attention because she was our prime “hippie” -- in dress, in attitude, in her Greenwich village address and in her deeply held belief in the equality of all peoples and her passion for protecting the environment. Sadly, she died on September 16 at age 72 from complications from chemotherapy associated with a bone transplant she had several years ago after developing leukemia.
Mary’s job was preparing clipping books for our clients, in those days mostly business-to-business. A substantial part of our work was product publicity, and we delivered it by the ream. (In fact, for many years we offered a monthly prize to the account team that produced the most cover stories). We reported our results monthly to clients in clipping books, ranging in size from 12 to 36 pages, that were distributed to client executives, the sales force and, in some instances, to dealers and distributors. Arranging clippings in order of the publication’s importance and by subject was Mary’s job. She did it well and took great pride in her output.
On weekends, Mary and her friends, Peter Yarrow and Paul Stookey, did gigs in Greenwich village venues including two that became well known, Folk City and Bitter End. In short time (during which Mary resigned her job at Burson-Marsteller) they established a worldwide reputation and were producing albums that made it to the top of the hit parade. Among their best known songs – with which they are still identified – are Bob Dylan’s “Blowin’ in the Wind,” “If I had a Hammer” and “Leaving on a Jet Plane.”
I have three specific memories of Mary, whom I saw from time to time through the years. The first involved her father, Bob Travers, who joined Burson-Marsteller about a decade after Mary had departed and she was at the peak of her career. Bob was our “copy editor” for ten years or so -- no written editorial material left the New York office without his approval. I had learned that he and Mary’s mother had split when Mary was very young and that Mary had not seen him in many years. Tragically, Bob developed an abdominal cancer which was discovered in its late stages; the prognosis was dire. I thought Mary should know and my calling her resulted in a reunion before Bob died.
The second occurred a year or so after leaving Burson-Marsteller when Mary brought her baby daughter to our office to show off to her many friends. My partner, Bill Marsteller, a great stickler for office decorum, returned from lunch just as Mary was diapering her offspring on the couch in our reception room. Though he said nothing to Mary, he was, I am told, near apoplectic that Mary was diapering her child in the reception room. Luckily, I was out-of-town that day.
The third happened three years ago – actually the last time I saw Mary. I was walking one winter day across the lobby of the Waldorf-Astoria and found myself engulfed from behind in swaths of mink fur. Mary, who was about five inches taller than I, snuck up from behind and wrapped her arms around me, turned me around and gave me a big smooch.
That’s how I will always remember my Burson-Marsteller colleague, Mary Travers.
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Harold Burson
September 17, 2009 9/15/2009 10:39 AM
Back in the mid-1960s, Marshall McLuhan, a scholarly English professor who morphed into a “media theoretician,” startled the media world, including advertising, public relations and other affected disciplines, with his theory “The Medium is the Message.” In his best selling book, “Understanding the Media” his basic thesis is that different media invite different degrees of participation by the reader/viewer. Put another way, the same advertisement in different media even of the same genre, i.e. magazines, influences the reader differently. Or different media, i.e. movies and television, affect viewers differently. Movies, he contended, were “hot”; they utilize a single sense, vision, in a way that requires little exertion by viewers to understand the action. On the other hand, television is “cool” because it requires viewers to expend more effort. “Hot” media generate complete involvement by the reader/viewer with little expenditure of effort; “cool” media require more active participation with less impact.
McLuhan also argued that the evolution of different and more advanced media – going all the way back to the phonetic alphabet and the printing press and, later, movies, radio, television and today’s computer-driven electronic communication vehicles -- have different impacts on their readers and viewers. For example, the print culture which followed Gutenberg’s mid-15th Century invention resulted in a more visual cultural homogenization, while later media like movies and television created a more oral/aural culture. In fact, as long ago as the early 1960s, McLuhan wrote that “electronic independence” would replace the visual culture with an aural/oral culture. Mankind, he predicted, would then move from individualism and fragmentation to collective identity with a “tribal base.” He described this future social structure as the “global village.”
McLuhan was right in foreseeing the force of the internet, the computer and their many spin-offs in the field of advanced electronic telecommunications. But he failed to point out that no new development since the invention of the phonetic alphabet caused a total replacement of an existing form of communications. Movies and radio did not replace newspapers and magazines; television did not replace radio and movies. Cable TV did not replace broadcast TV. Instead, newspaper articles are now available on computer and mobile telephone screens and so are movies and television.
Typical for a new medium, the internet is still a work in progress. Each has evolved over periods of time using trial and error experimentation to sift out its most effective usage. In the 1950s and 60s TV commercials ranged in length from 30 seconds to two minutes. In Germany, commercials were once bunched up and broadcast in five-minute segments before the half hour and the hour (programming started at 5 p.m. and ended at midnight). Half-hour and full hour shows in the U.S. were at first sponsored by a single advertiser until it became apparent that television required an economic model different from radio because of increased TV production costs. For a decade or more, movie producers earned more from DVDs than from motion picture theaters.
But while the internet seems on track to be the dominant medium for disseminating news, information and even entertainment and telephone calls, there is still doubt whether it is the perfect medium for all usages. Because of its openness, it allows for the transmission of false and even malicious information. Because of the near-permanent access of computer-generated data, it has the potential to cause harm to individuals who have been reckless in their e-mail exchanges. In his recent address to the nation’s grade and upper school students, President Obama admonished them to take care with their e-mail texts so as to avoid future embarrassment or misunderstandings if they ever ran for public office. Despite the power of social media, we have seen examples of the harm it can do as well as the good.
We tend to forget that the internet is neutral in its capability to disseminate information. Its users will make it a credible and authentic source of information or one whose output is met with doubt and uncertainty. Very likely, it will be both.
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Harold Burson
September 14, 2009
NOTE: Marshall McLuhan quotations from Wikipedia 8/13/2009 2:30 PM
Much has been written about the $100 million bonus Citigroup energy trader Andrew J. Hall insists he is owed.
But ponder this question:
Would such widespread outrage have been expressed by media, politicos and the public-at-large if the princely sums promised to Mr. Hall and other high income producers had been positioned as commissions (instead of bonuses) for negotiating the hugely profitable transactions that, in Mr. Hall’s case, netted his employer some $600 million?
Admittedly, there are two extraordinary aspects of Mr. Hill’s situation. One is the magnitude of his reward, i.e. a hundred million dollars, a respectable, but not overly inflated fraction of the income his transaction generated. The other is that his employer, Citigroup, borrowed taxpayer-derived TARP funds, a loan which rescued Citigroup from insolvency, which Citigroup expects to repay and on which Citigroup is paying the government market rate interest.
If Mr. Hill had been selling 45-inch TV sets he likely would have netted a few hundred dollars, say five or seven per cent of the of purchase price. Most likely, he would have received it in his next paycheck, certainly a lot sooner than bonus-giving time.
But Wall Street seems to feel differently about the timing of employee compensation – very likely a factor of its early partnership structure. The usual compensation model, which persists to this day, delivers a modest salary (even for the most senior executives) and bonuses based on the firm’s total profits. Trader and broker bonuses usually reflected transactional income they produced (totally free of future liabilities) – in effect, commissions deferred and paid at bonus time. Bonuses for other executives were usually based more on qualitative metrics than quantitative and truly fit the “bonus” descriptor.
It therefore seems grossly unfair that traders like Mr. Hill should be penalized when they have generated measurable income after a promise (in most cases contractually) of an agreed-on reward based on measurable performance. It’s even more horrific that they are being reviled in the media and in Washington circles as both greedy and unpatriotic when they choose not to forfeit money (commissions) they have rightfully earned. The reality that some of them earn more than their CEOs is beside the question; they’re the ones who bring in the moolah and the formula determining their share is always very precise.
Those who earn their money by the rules ought not to be singled out as money-grubbers feeding at the public trough. Perhaps a starting point toward more equitable treatment is for Wall Street to differentiate between bonuses and commissions.
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Harold Burson
August 12, 2009
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