Ketchum CEO Ray Kotcher pens answers to PRWeek questions about the DoE situation, changes in the media, and the nuances of working with the government.
PRWeek: How have your clients and employees reacted to the Department of Education (DoEd) situation?
Ray Kotcher: Since the story broke in January, I have spoken to or met with dozens of our clients. They have been most supportive. I believe their support is a true testament to the firm's tradition of building meaningful client relationships and delivering great strategy, creative and results. We appreciate the faith and trust they have placed in us.
With regard to our employees, they were understandably concerned about what was being said about Ketchum. Our employees are very connected to the firm's 80 plus year heritage.
More importantly, we all are proud of our values ? honesty, respect, teamwork, passion and precision ? and our work to professionalize our firm and further our industry. From the very start, while we were establishing the facts around the DoEd situation, it also was important for us to keep our focus on our work and continue to deliver great service to our clients. Our employees did just that. This was fundamental to getting us through the early demands of the situation. I owe our people a great deal of thanks.
PRWeek: How did the relationship with the DoE begin?
Kotcher: The master contract with the Department of Education (DoE), which originated in 2003, was awarded after a competitive bidding process in accordance with the Federal Acquisition Regulation (FAR) standards and procedures. The contract was for technical and production support and strategic communication consulting services in support of No Child Left Behind (NCLB).
PRWeek: How did the relationship with Armstrong Williams begin? Whose idea was it?
Kotcher: As part of its overall contract with the DoE and at the request of DoE, Ketchum was asked to administer the Graham Williams Group (GWG) subcontract. The total value of the subcontracts with the GWG was $240,000. All monies paid to GWG were specifically for GWG to produce and place advertising. In addition, for its part, Ketchum received $2,503.25 from the Department of Education to administer this subcontract with the Graham Williams Group.
It is our understanding from interviews conducted with Mr. Williams by major media outlets that his subcontract was based on an idea proposed by Mr. Williams to the DoE.
Though the subcontract called for advertising services, it also stipulated that Williams would talk about NCLB on his show, The Right Side. While we had no legal obligations to ensure Williams disclosed on his show his financial relationship with the Department of Education, under the guidelines of our agency and our industry, it is clear that we should have encouraged him to do so. It has been determined that it was an unintentional error and certainly not typical of our standard practices. We regret this has occurred and will continue to work with the government and our industry in addressing this situation.
PRWeek: You previously stated you were doing an internal/external examination. What have you found?
Kotcher: The examinations focused on getting to the facts. Again, we acknowledge that we should have been more diligent in ensuring that Williams disclosed his relationship on his syndicated television program, The Right Side. There is no indication that it was ever the intent of Ketchum or any of our people to mislead anyone.
It also is our understanding that in addition to speaking on his own show, Williams discussed NCLB on the record with other media outlets on his own initiative before and during the contract. Ketchum did not arrange any of these interviews or appearances. Ketchum's standard practice is to disclose to the media the relationship between its spokespeople and the clients they represent when arranging appearances on behalf of its clients. Williams has acknowledged that he should have disclosed his relationship with the DoE when he spoke about NCLB.
PRWeek: A lot of news has centered on the amount of money being paid to public relations agencies for federal government work. Please explain the $97 million figure.
Kotcher: In recent months, a number of figures have been reported concerning the federal government's contracts with public relations agencies. The Ketchum contracts have received a good deal of the attention. Simply put, in many [federal] contracts, the master or prime contractor will use subcontractors for all sorts of tasks. As it relates to the figure you've raised, in this case the great majority was paid to subcontractors for work they performed as well as for the purchase of advertising. The total value to Ketchum of all the US government work we performed is a small fraction of that being cited in the media.
PRWeek: You've been criticized for how Ketchum responded in the DoE situation. How do you respond to that?
Kotcher: Two important points. First, in any situation where one of our clients is concerned ? which in this case was a department of the federal government ? we must consider all of the ramifications for the client and then for Ketchum ? in that order. Second, it was tempting to clarify the dialogue. That would be the advice often given to a client in a crisis situation. But we also simultaneously needed to establish the facts.
I'll admit that it was painful at times to hear what was being said about us, but I would rather take the time to be fully confident about our response.
That said there were times when we spoke out. For those who may not have seen our responses, an Op-Ed with my byline appeared on this publication's website just days after the story broke. After that Op-Ed appeared, Lorraine Thelian, senior partner/North America, did interviews with our industry's major trade publications. We then issued a statement expressing our regret that this situation occurred. This forum is another step in the communication process.
PRWeek: What is your reaction to the way the industry has responded?
Kotcher: We appreciate the clients, former employees and other industry leaders who contacted us expressing their support. They recognized that this was an unfortunate and complicated situation and that our long-standing reputation in the industry would help us through this. Some comments weren't helpful in this particular situation or for the industry at large because people spoke without having all of the facts. We wish they had spoken to us first, and I'll leave it at that.
As far as the general reaction by the public relations industry to the issue of paid spokespeople, disclosure and transparency, it was immediate and clear. Individuals and professional groups made statements emphasizing the importance of disclosure of relationships with spokespeople. We agree fully with the responsibilities of public relations professionals and spokespeople to disclose and nowhere is that more important than with government work (i.e., taxpayer-funded initiatives). The public has a right to know about the relationship that spokespersons may have to the issue or organization they represent. Some of our industry groups ? the Public Relations Society of American (PRSA), Council of Public Relations Firms and the Arthur W. Page Society ? have scheduled different forums to discuss the changing media landscape and responsibilities of the public relations industry. We are participating whenever possible.
PRWeek: In light of the new media environment, how have you tailored the policies at Ketchum?
Kotcher: Historically, our policies always have emphasized truth, accuracy, and respect. Those policies have been designed to ensure that all Ketchum colleagues adhere to the highest standards and practices while providing outstanding service to our clients. And we always strive to improve.
After revisiting our practices, specifically those relating to spokespeople and third parties, we modified the relevant practices to ensure they provide crystal-clear guidelines within which our colleagues can make decisions in their everyday work.
There also is a central number they can call if they have additional questions. We revised the standard agreements we use with subcontractors on government work. We also revised the contracts guiding the work with spokespeople and media tours. All of these contracts clearly spell out the disclosure responsibilities of all parties involved.
We also are introducing two new training courses for all colleagues in North America. The first educates on the new contracts and disclosure policies. The second is a workshop that instructs how to put the agency's new policies, procedures and contracts into practice on an everyday basis. Finally, we will be launching a specialized training program for those employees who handle public-sector accounts.
The modification of our guidelines, revision of our contracts and the new training courses will provide a compass to help our people clearly and safely navigate the rapidly changing, highly complex media environment for our clients and for the agency. As the media environment continues to evolve, Ketchum will continue to adapt and improve our standards and practices.
PRWeek: What has this taught you as a CEO?
Kotcher: For me, recent events have reinforced yet again the fundamental importance of public relations work in both the public and commercial sector. As I said before, immediately after this issue broke, I sent an editorial to PRWeek in which I wrote about the changes in the media world and how with those changes come a fresh set of responsibilities for all of us in public relations. Whether one practices in an agency, corporation or not-for-profit, as counselors we must continuously learn and adapt so we can help our clients and management meet those new responsibilities and, at the same time, identify and seize new opportunities.
One more thing that I feel compelled to mention is my immense respect for those who came before me at Ketchum ? not just the CEOs but staff at every level. They set us atop a solid foundation that supports all that Ketchum is today. And while the past few months certainly have challenged our firm, we continue to grow and are coming through this stronger and better off for the experience. It is my intent to continue to build upon the work of our predecessors and protect our heritage and deeply rooted values, so that the next Ketchum generation has that rock solid foundation on which to stand and confidently navigate the changing environment.