A recent survey in Russia asked 500 Moscovites an ostensibly simple
question: 'What is public relations?'. The results were shocking. More
than 50 per cent said they had no idea what it meant, with just 33 per
cent answering correctly. But what causes greater concern is that a
proportion thought it was a synonym for propaganda.
The findings, from Russian research agency ROMIR, coincide with recent
reports exposing the extent of Russia's 'black' PR market - or, in other
words, newspapers taking cash for stories.
A press furore erupted both in Russia and abroad when news broke that,
as part of an expose campaign, a Russian PR agency approached 21 news
organisations offering to pay for an article to be published - and 13
published ran the story without question.
Since the expose, led by St Petersburg-based consultancy Promaco PR/
CMA, Russia's PR industry has been catapulted into the media spotlight.
With such blatant corruption evident throughout the industry, it's no
wonder so many Russians are suspicious of and confused by PR.
Until just five or six years ago, PR was widely seen as merely another
form of advertising in Russia. Only very recently has the industry
started to come into its own, although negative press generated by the
cash-for-news scandal does nothing to improve its image. So, it's hardly
surprising Russia's PR industry is lagging behind the West, given that
the development of the industry is directly related to the country's
Under communism, business and press were government controlled.
Companies simply had no need to market themselves to investors and
consumers. As the country moved towards a market economy, business
started to see the importance of PR and investor relations, which acted
as a catalyst for PR development.
However, Russian PROs found themselves faced with a reluctance inherent
throughout many companies to be open with the press and public - a
mindset that lingered from the Soviet era.
Shandwick financial PRO David Hothersall, who worked in equity research
for Robert Fleming in Moscow and studied in Russia, says the lack of
legislation and accountability still proves a challenge for PR.
'Suddenly Russia has found itself in the midst of everything but does
not have a strong backbone of legislation and a market infrastructure to
keep up,' he says. 'Companies are not aware of the importance of keeping
investors in the loop.' He adds that the decision-making process in
companies can also hold PR back.
Some CEOs do not take PR seriously and cannot understand the benefits of
talking to the media, except to pay for positive news stories.
Russian-born Marina Boughton, Gavin Anderson associate director and
financial PR expert on the region, says: 'In Russia it is customary to
pay for articles, and it remains a Russian mentality from Soviet times
when people were told what to think and do. People still think there's
no value in their story apart from money. I keep trying to explain that
you don't have to pay to get your point across in the media.'
Boughton says Russian companies are often scared to talk to journalists,
especially Western ones, as they see their interest as a threat.
However, as these firms find themselves part of an increasingly global
market, they are being forced to play by Western rules. If they want to
attract foreign investment, they have to start communicating their
company message effectively, and to do that they must use best practice
'Gradually these companies are realising that they have to be
transparent and communicate with investors - and not just when they want
to raise money,' says Hothersall. 'If they have to deal with Western
media they can't operate on their own standards, they must realise that
they are now competing for global media attention,' he adds.
Russia is waking up to the fact it must fight for foreign
Most of Russia's stock market is based on oil, gas, utilities and
telecoms, which means there are certain areas of PR which are steaming
ahead in terms of development.
Although consumer PR is already relatively advanced, mainly due to the
fact many of the product companies are global with PR programmes already
in place, the real high-growth sectors are investor relations, hi-tech
and financial PR. These are becoming increasingly important to Russia's
industry and are areas of PR that CEOs are being forced to take
When it comes to making their business a success, they're willing to
spend time and money learning about PR and how it can help them.
In fact, earlier this month a team of top officials from oil companies
and investment banks travelled to London to take part in a financial PR
training conference, organised by London Corporate Training. The course
covered IR, financial PR, lobbying and brand sponsorship, with speakers
from The Financial Times, Reuters, the International Public Relations
Association and financial PR agencies Gavin Anderson and Weber Shandwick
Boughton, who also worked as a BBC World Service correspondent in
Moscow, says: 'It's really fascinating how fast financial PR is changing
in Russia, because they want to tap into international capital markets.
We've found that companies are beginning to listen to us and are
actually putting money aside for proper PR budgets.'
However, she adds that there is such a rush in these sectors to catch up
with international PR methods, CEOs are jumping on the bandwagon without
the proper know-how to see it through. They know they want PR and are
willing to finance it, but are still unsure of how to use it or what it
can do for them.
'I know some companies that have communications departments, but don't
even have a communications strategy - and for many, internal
communications just doesn't exist,' she says.
While some groups are still coming to grips with the concept of PR,
there is a growing band of PR-literate growth companies. Mobile Tele
Systems (MTS), based in Moscow, is one such firm. It has formed in-house
PR and IR teams and also retains Gavin Anderson for financial PR.
MTS press secretary Eva Prokofieva joined the company ahead of its
flotation on the New York Stock Exchange, when the CEO realised it
needed a press officer to direct communications through the IPO.
Speaking from Moscow, she says the top-level attitude towards PR has
changed greatly following the flotation: 'Since we went public our CEO
takes PR very seriously, realising investors judge the company by what
they read and see in the media - I now don't have any problem arranging
'There's also a big difference in the attention and importance we attach
to analysts and the investment community as a whole,' she explains,
stressing her company has strict rules not to pay for articles to be
Fellow Russian telecom group Sistema Telekom (ST) - a holding company of
26 firms - set up its PR department two years ago. ST head of PR Kiril
Maslentsyn says: 'The idea came about when we understood it was
impossible to provide information to the media without a PR department.'
The firm sometimes receives between 25 to 30 press enquiries a day, with
many from international financial journalists.
But Maslentsyn has found the choice of good Russian-based PR agencies
limited. 'There's a huge gap between the amount of money they charge and
the quality of service,' he admits, blaming the lack of experienced PR
professionals available in Russia.
As with the rest of the global PR industry, recruitment is proving one
of the biggest problems, but in Russia this is compounded by the fact it
is still such a young sector. Currently there are around 60 higher
education establishments licensed to teach PR in Russia, which is
encouraging in terms of training, although it will be a few years yet
before an adequate number of experienced PROs arrive on the market.
Many Russian companies seek PR support outside the country as a result
of this, alongside their growing need to target overseas investors.
Yet, according to accounts from some UK agencies, dealing with Russian
firms can prove more trouble than it is worth.
One British financial PRO said they had so many problems recovering fees
they had to resort to extreme tactics.
'With one Russian client who refused to pay, I had to call them up and
pretend that if they weren't going to pay the fees I would be fired from
my job and my wife and kids would be destitute. Eventually they coughed
up,' he says.
'Many agencies who looked to Russia have ended up spending more on
recovering debts than the fees were worth in the first place,' he
Those who have had their fingers burnt once now refuse to take on
accounts unless money is paid up front. Unfortunately, it is this kind
of attitude from Russian businesses that encourages unethical practice
in the country's PR community.
Shandwick's Hothersall believes those Russian companies which are
starting to adopt fairer business practices and cultures in line with
the rest of the world will not only achieve greater success in Russia
and overseas but will help the PR sector immeasurably.
'There has been a sea change of attitudes towards PR in Russia over the
last five years and every year world standards are increasingly being
applied,' he says. 'The companies that realise you have to be
accountable and use PR effectively will be the true winners, because
they'll stand out a mile.'
Russia's PR market will be invaluable in helping the country's economy
grow, which will, in turn, see the PR industry thrive in its own
The key to its long-term success, though, lies in educating not only
clients but also the press and public on the practice of PR to help
eradicate negative perceptions formed during Russia's complex past.