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Public Relations Business Is Back
January 29, 2004
By George S. Mc Quade III
West Coast Correspondent
Odwyer Publications, NY
(From L-R Top right) Joe Kessler, president of California operations, Weber Shandwick; Gail Becker, president, Western Region, general manager, Los Angeles; Alan Arkatov, president & CEO, Burson-Marsteller, Southern Calfornia and Debra nakatomi, president, Nakatomai & Associates address the annual PR Newswire-PRSA-LA sponsored "State-of-the-State" workshop. Joseph Kessler, pres. of Weber Shandwick's
"Last year, we sat up here and told everyone business was good. We lied," said President Joseph Kessler of Weber Shandwick California, a panelist at this year's "State of the State of PR" session sponsored by PRSA/Los Angeles on Jan. 29.
Kessler was among four panelists sharing observations at the PRSA-LA sponsored Part I of a two-part program entitled "2004 STATE OF THE STATE OF Public Relations, PART I: The Agency Perspective," at the Wyndham Hotel, West Hollywood, CA.
"The last three years have been extremely painful, but we did not have to fire anyone other than for malfeasance. However, over the course of a couple of years thousands of people had to hit the streets as a result of the economy. This year business is growing, budgets are up and we are hiring again."
The entire panel agreed that the "tech boom" backlash of the late '90's where it was hard to find people to fill jobs has forced clients to do diligence to make sure the agency is the right fit. "So it is a matter of hiring better people, and training them better," said Kessler.
Weber Shandwick Worldwide is the world's largest PR agency and is a subsidiary of the Interpublic Group of Companies. Kessler, who was at last year's event manages agency operations in San Francisco, Silicon, Valley, Los Angeles and Orange County.
Kessler was the only returning top agency manager from last year's panel of six. Missing from last year's panel, but spotlighted this year was Doug Dowie, senior V.P. and Senior Partner, GM, Fleishman-Hillard. The question of ethics surfaced over a recent front page Los Angeles Times article that spotlighted how Fleishman-Hillard would do pro-bono work or contributed funds, or hold fundraisers for the Mayor James Hahn and receive large government contracts such as the City of Los Angeles Dept. of Water and Power, an account reportedly worth more than $2 million.
Alan Arktov, president & CEO Burson-Marsteller, SoCal
"I want to see the smoking gun when you have a good story, and there has not been one, so in fairness to Doug (Dowie) at the end of the day, people get hired, I think, especially in this town, people on this panel and in this room by the quality of work and that gets you continued business, end of story," said President and CEO Alan Arkatov, Burson-Marsteller, Southern California. "If Doug Dowie has figure out how to do the public affairs piece well and figure out the angles at city hall, good for him. If he doesn't do good work, he will not get the business. There are too many good investigative journalists in this town that will call him on it. If you look at the sum total of all of those pieces, you would say 'wow' he's gotten a lot of business. I consider him a friend and a competitor. When the City Controller is going to look at the billable with a magnifying glass, you're not going to get away with a lot of stuff. If you have the right people, you service the client well, you'll get business, and there's plenty of business for everybody in this room to go around in government and the private sector."
"I think they (the LA Times articles) have helped to broaden the definition of PR," said Gail Becker, general manager and president of the Western Region of Edelman's Los Angeles office. "People feel very confident, yet there's that trepidation, because we are all victims of our own experience." "It helps to really understand the role that PR plays in all sectors of our lives. It probably has had an impact on the non-PR types as well in understanding the profession and how important they are in the government." "I don't think Fleishman did anything wrong, but that doesn't mean there's nothing wrong with the system," she said. "The system is broken and I think there are ways to fix it. That doesn't necessarily mean the people who are able to figure out the system and use the system to their benefit is wrong, but that doesn't mean the system is not worth taking a look at it. It is interesting from my perspective, I look around the office at four or five practice areas, one thing I always notice: Public Affairs, whether consumer, technology or health care relies most on connections more than any other practice area," Becker explained.
"And what I recently discovered, since the LA Times story broke, in two separate instances, one firm had better
Gail Becker, president, Western Region, general manager, Edelman, Los Angeles, CA.
connections, and was really geared to get that account. The client group paid a lot more attention to the quality and issues involved and to the other firms, and in two of the cases the client ended up picking another firm, other than the one that was better connected. Was that a coincidence? I don't think it was, and I think there was that underlying feeling. As a former news reporter, I always think those things (newspaper stories) are healthy, she said."
Gail Becker, president, Western Region, general manager, Edelman, Los Angeles, CA. talks to PR pros after the PRSA-LA workshop in Hollywood.
"There seems to be some synergy in the nonprofit area, and we're looking for some new business possibilities in the nonprofit sector where organizations need branding and are raising money said," Debra Nakatomi, president, Nakatomi & Associates, a firm she founded in 1989 that does social marketing and public relations education campaign. "Fortunately, the Asian markets have not been impacted by clients wanting to do more PR internally. We have been fortunate to be able to team with the larger firms to meet the demand, but certainly that environment is changing as well."
"People feel very confident, yet there's that trepidation, because we are all victims of our own experience," said Gail Becker, general manager and president of the Western Region of Edelman's Los Angeles office. Edelman Worldwide is the largest independent agency in the country and in the top 10. "On the one hand we say business is very good, and clients are moving quicker and were sort of looking over our shoulder just to make sure that no one is jinxing it. Clients are moving quicker, but they're also a little more demanding. It holds true of what the demand the economy is putting on them and strains that their company is facing. All good signs, but strains the agencies a little bit."
"Our key clients know exactly where our strengths and weaknesses are, especially after the last three years, you can't do the bait and switch, you must tell them you're moving a junior manager up to handle their account," said President and CEO Alan Arkatov, Burson-Marsteller, Southern California, who is also heavily involved in the California Postsecondary Education and UC systems. "We have increased our professional development, which means a lot more training and mentoring is going on. But the first places you go to are the clients you have that know you the best, so there's not a lot of room for smoking mirrors."
"People feel very confident, yet there's that trepidation, because we are all victims of our own experience," said Gail Becker, general manager and president of the Western Region of Edelman's Los Angeles office.
Edelman Worldwide is the largest independent agency in the country and in the top 10. "On the one hand we say business is very good, and clients are moving quicker and were sort of looking over our shoulder just to make sure that no one is jinxing it. Clients are moving quicker, but they're also a little more demanding. It holds true of what the demand the economy is putting on them and strains that their company is facing. All good signs, but strains the agencies a little bit."
Panelist Debra Nakatomi, Nakatomi & Associates represented the smaller firms on the panel the annual event.
President and CEO Alan Arkatov, Burson-Marsteller, Southern California
"So many times we're brought into an Request For Proposal (RFP), where a company is looking to replace their firm, unbeknownst to that agency, and often times the client wasn't satisfied with the work," said Becker. "As an agency you would think that's a positive sign for business, but in reality it really hurts us all, because what you end up doing is spending half your time underselling the value of public relations, and the client becomes confused over whether they really need public relations at all. It slows down the entire process. When we all benefit, we all do really benefit."
"Edelman, which handles entertainment and consumer technology accounts has been working with the Grammy's for the last year, which plans to unveil a new "value for music" campaign on the night of the music awards February 8th. Edelman launched X-Box with Microsoft. "We have an office full of gamers, so when you come into our office and see people playing games, you know it's work," Becker said.
Two new rising trends have been observed. One, PR agencies firms are using consultants, training them and then bringing them into an agency for fulltime jobs. Another new trend in addition to more training, and more entry and middle manager job openings popping up is the fact that agencies like Edelman and Weber Shandwick are Collaborating with smaller firms. "Either we're agency of record for a company, because we consolidated and the clients may use a subcontractor firm or visa versa. There is no more middle in our business. It is either boutique or niche or it's big and global."
"I'm a big believer in shining the light, which everybody does in this room; you shine the light on somebody, where most of the good and bad will come out. What Gail was talking about, and I don't want to make this a beat up on Doug night, although I don't mind. But if someone is getting that much scrutiny, there going to have a lot more questions," said Arkatov.
"The ethical foundation of the PR business has been repeatedly called into question, and it has not served well when we're on the Channel 4 News, being accused of paper play services, using taxpayer money in that kind of a way," said Arkatov. "I think it needs to be looked at. I don't think it's the government's responsibility. Maybe some of it is, but I had a sick feeling in my stomach when I saw the mayor of the city on the local news defending a private public relations firm and it didn't make me feel good about the industry.
"I'm not taking a shot at Doug necessarily, because he's a great, smart and interesting guy, who provided more color than anyone last year anyone on this panel. He's got a great firm, but I think the agencies at the point owe it to themselves to enforce a set of rules and ethical conduct, which covers any questions to be concerned about when the light gets shined on us. There are practices and policies that should be called into question about how we work, because we have this unique relationship with government. I think public relations, because we're called upon to provide this kind of advice to our clients, this is troubling to me that that conduct would not be followed by the leading agency of this town," said Arkatov.
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