The PR Industry : Overview

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Public relations and lobbying industry

an overview

By Corporate Watch UK
Completed April 2003


1. Overview

"The history of PR is… a history of a battle for what is reality and how people will see and understand reality."
Stuart Ewen [1]

"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate the unseen mechanism of society constitute an invisible government which is the true ruling power. We are governed, our minds moulded, our tastes formed, our ideas suggested largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate if they are to live together as a smoothly functioning society. In almost every act of our lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses. It is they who pull the wires that control the public mind."
Edward Bernays [2]

Every organisation that interacts with other agencies may be said to engage in public relations. Organisations by and large wish to project as good an image as they can, and often wish to communicate a particular message. This applies as much to a small cooperative like Corporate Watch as it does to a large multinational like Dow Chemical. It is, by a broad definition, an ubiquitous and inescapable practice.

There is nothing essentially wrong in wanting to present one's own case in as effective manner as possible. However, in spite of frequent protestations to the contrary from the PR world, this is only a part of what modern PR does. There is a considerable body of evidence emerging to suggest that modern public relations practices are having a very significant deleterious impact on the democratic process. As this report will demonstrate PRs have often engaged in deliberate deception on their clients' behalf and have developed a deeply unhealthy relationship with the 'free press'. Furthermore, by giving vested interests the opportunity to deliberately obfuscate, deceive, and derail public debate on key issues the public relations industry reduces society's capacity to respond effectively to key social, environmental and political challenges.

Section 1 provides some background information on public relations: what it is; some basic stats on the size of the industry; and a short history of its development

Section 2 looks at the different agencies in the industry from in-house PR departments to the big communications conglomerates

Section 3 looks at the services offered by PR companies

Sections 4, 5 and 6 explore the relationships between the PR industry and governments, the media and the public

Section 7 provides a list of further resources on public relations and lobbying

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1.1 What is Public Relations?

Public relations is the practice of getting attention and shaping public opinion. Its tools include publicity, advertising, public affairs forums, lobbying public officials, and any and every other means that gets a message out to the public. Mostly however it is about placing stories in the media, getting newspapers, radio and television to accept stories or messages sourced from PR agencies. This gives the illusion that the client's message is simply the product of impartial journalism rather than advertising with which the consumer is more familiar and resistant. Sir Tim Bell, of Bell Pottinger, comments, "A strong story placed in the newspaper, picked up by everybody else, will actually have more impact than an advertising campaign."[3]

Public relations uses many of the tools of marketing and may be used to promote a particular product but often it is employed in pursuit of a slightly different goal. Marketing (including advertising and promotion) is about selling products and services whereas PR is often concerned with selling persons, government policies, corporations, and other institutions. In addition to marketing products, PR has been variously used to attract investments, influence legislation, raise companies' public profiles, put a positive spin on disasters, undermine citizens’ campaigns, gain public support for conducting warfare, and to change the public perception of repressive regimes.

In a modern democracy the mechanisms of propaganda and control must necessarily be far more subtle than those employed by more repressive regimes and PR or ‘spin-doctoring’ has become ubiquitous in the western political economy.

By necessity the industry keeps a very low profile, however. Although the public consumes a huge amount of their work, companies such as Burson-Marsteller or Bell Pottinger are far from household names. Michie quotes a top British spin doctor as saying "'PR is very much an invisible art and it doesn't serve our purposes to reveal how much we manipulate journalists and the public'"[4]

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1.2 Economic Importance

From its birth in the early part of the 20th Century public relations has grown in to a multi-billion dollar industry that has become an integral part of modern business and political life.

In recent years the PR industry has been pulling in record revenues. In 2001 the PR industry recorded global revenues of $4.3bn, with revenues of $2.9 billion in the US, down 7% from 2000. That's 2.7% down from 2000, due to the economic downturn immediately after the Sept 11th attacks but still 19.5% higher than in 1999. From 1990 to 2000 worldwide PR revenues increased by a massive 250%[5]. In Britain, memers of the Public Relations Consultants Association saw incomes rise from £18m in 1983 to £401m in 2001[6].

In a report commissioned by the Council of PR Firms, Economist Jaime de Pinies noted, "despite the budget cuts, it appears that public relations as a discipline is increasingly valued by the firms in this survey." By contrast advertising revenues have declined in the past decade.

According to David Michie, ex-PR and author of 'The Invisible Persuaders: How Britain's Spin Doctors Manipulate the Media', it was the cheapness of PR compared to advertising that gave it a competitive edge. "During the recession of the early nineties most British companies faced the unhappy prospect of having to slash their marketing budgets, and in many cases it was the large and over-ripe advertising budgets which proved the easiest to prune… marketing directors turned more of their attention to other aspects of the marketing mix - and were pleased to discover the impact of a well-directed PR campaign. With the return of more clement trading conditions, PR held on to its increased market share of many corporate marketing budgets, spurring a massive boom in the industry."[7]

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1.3 Origins of PR

Public relations began to emerge as an identifiable industry in America in the early part of the 20th Century. From the mid-1800s onward there had been a rapid consolidation of wealth and power into the hands of big business resulting in systematic abuses of that power on their part. By the turn of the century trade unions began to emerge in order to protect workers. In time public opinion became highly sceptical of the new corporations and there were calls for stringent new regulations on corporate power.[8] In this hostile climate of public opinion big business found itself in need of friendly propagandists. Stuart Ewen, author of "PR: A Social History of Spin", puts it thus: "corporate PR starts as a response to the threat of democracy and the need to create some kind of ideological link between the interests of big business and the interests of ordinary Americans."[9]

The practice of PR was pioneered and shaped by men such as Ivy Lee and Edward Bernays. Lee was a journalist who moved into handling press relations for Standard Oil and railroad companies. Up until then companies faced with a crisis, such as a railway accident, had tended to do their best to cover up accidents and problems, engendering an oppositional attitude and hostility from the press. Lee innovated by allowing journalists supervised access to accident scenes, defusing press hostility and in the process exercising some influence over coverage[10].

Even in the early years however, PR practitioners were not above lying to promote their clients' interests. Ivy Lee famously handled public relations for the Rockefeller family after the Ludlow massacre of 1914, when 14 striking miners were shot dead by the National Guard who were working on behalf of John D. Rockefeller, the owner of the mine. The event provoked a national scandal. In spinning the Rockefeller line, Lee printed numerous falsehoods about striking miners, claiming that they had started fires and deliberately provoked the National Guard. According to Stuart Ewen, Lee quickly gained a reputation as a professional liar[11]. In the 1930s Lee accepted work for the German Dye Trust to improve relations between Nazi Germany and America. He died with the accusation of being a Nazi sympathiser hanging over him.

Edward Bernays (quoted above) was another of the early PR men. He learnt his trade working at the Committee for Public Information, or the Creel Commission, Woodrow Wilson's pro-war propaganda outfit that coaxed the American public into supporting US involvement in World War One. After the war, Bernays opened his New York office in 1919 and worked for companies including Procter & Gamble, CBS, General Electric and Dodge Motors. Bernays, a nephew of Sigmund Freud, attempted to apply theories of social psychology to his work in mass communication. By contrast with Lee who claimed to be very open, Bernays was quite candid about the secretive and manipulative nature of his work (see opening quotations), and was expert in the use of third party advocacy. Working for the manufacturers of Chesterfield cigarettes, he famously boosted sales of tobacco to women by persuading 1930s feminists to adopt smoking as a symbol of emancipation[12].

But it wasn't until after World War Two that the PR industry really began to take off. Larger companies began to emerge from an industry dominated by individual consultants. Companies such as Hill & Knowlton and Burson-Marsteller crossed the Atlantic in the 1950s becoming the first PR transnationals and quickly assembled global networks of offices. For the first time it became possible to coordinate corporate propaganda in both the US and Europe. [see Hill and Knowlton and Burson-Marsteller profiles]

In the sixties Hill and Knowlton again innovated by offering lobbying as a service to its clients. Within a few years its Washington DC office had multiplied its revenues many times and H&K began a string of acquisitions of other Washington lobbying companies. Now all of the major PR companies have a 'public affairs' or 'government relations' practice.

In recent decades the PR and advertising industries have begun to consolidate. A small number of large conglomerates, such as WPP Group and Omnicom (see section 2.3 below), have been buying up the largest players and offering integrated corporate communications services. Only one of the top ten PR companies, Edelman PR Worldwide is still independent.

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References

[1] Interview with Stewart Ewen, author of 'PR: A Social History of Spin", www.znet.org

[2] Edward L. Bernays, 1978, ‘Propaganda’, p47

[3] quoted in Michie D., 1997, " The Invisible Persuaders: How Britain's Spin Doctors Manipulate the Media", p.6

[4] quoted anonymously in Michie D., 1997, " The Invisible Persuaders: How Britain's Spin Doctors Manipulate the Media", p.4

[5] Council of PR Firms press release, 22-4-2002, www.prfirms.org/about/press_releases/4-22-02.asp date viewed 10-7-2002

[6] "PRCA Membership Statistics", PRCA web site, www.prca.org.uk

[7] Michie D., 1997, "The Invisible Persuaders: How Britain's Spin Doctors Manipulate the Media", pp 6-7

[8] Barsamian, D., "Public Relations: Corporate Spin and Propaganda: an Interview with Stuart Ewen" Zmag, May 2000.

[9] Interview with Stewart Ewen, author of 'PR: A Social History of Spin", www.znet.org

[10] J Stauber & J Rampton, 1995, 'Toxic Sludge is Good for You: Lies, Damn Lies and the Public Relations Industry', pp19-20

[11] Barsamian, D., "Public Relations: Corporate Spin and Propaganda: an Interview with Stuart Ewen" Zmag, May 2000.

[12] J Stauber & J Rampton, 1995, 'Toxic Sludge is Good for You: Lies, Damn Lies and the Public Relations Industry', p1