All eyes on the East

Marketers, corporations, and PR firms see opportunities like never before in Mother Russia.

Marketers, corporations, and PR firms see opportunities like never before in Mother Russia.

The global spotlight recently shone on Russia during its presidency of the G8 summit. But the Russian market is one that has been the subject of a great deal of interest for the business community, as well as the PR community, for some time. Indeed, the global CEOs of many major PR firms cite Russia as a region with ripe potential.

Local firms are enjoying the opportunities, as well. "There is interest in the Russian market because there are 142 million Russian consumers who drink coffee, clean their bathrooms, smoke cigarettes, and drive automobiles," says Roman Diukarev, MD and president of the Willard Group Moscow, a Burson-Marsteller affiliate that works across Eastern Europe and Turkey.

In terms of news, the price of oil, which Russia has in abundance, has had a very positive impact on the economy, says Peter Necarsulmer, founder, chairman, and CEO of PR agency PBN Co., which opened his Moscow office in 1990. Russian corporations have experienced a tremendous amount of growth, and the political uncertainty with President Vladimir Putin's authoritarian leadership and his seemingly tighter grip on freedoms actually creates business for political and corporate PR.

A new discipline

There is no accurate way to refer to "traditional" PR in Russia because the industry is so new - just about 15 years old. But the way PR is done is very much the same as typical Russian business culture, with people wary of others until they are well-known.

"Russian PR is still built on relationships," says Svetlana Picou, director of international client services for Weber Shandwick. Picou is a Russian-born PR pro now working on many Russia-based programs from WS' Paris office.

"It is cultural. The people are straight to the point. There is no 'please' or 'would you mind?' - it's not rude, that is just the way they do business."

Rory Davenport, MD of Qorvis Communications in Washington, DC, has extensive experience working on public affairs campaigns in Russia. Davenport was surprised to discover that many journalists expect payment for stories and at how easily some corporations think of stories as purchases, like advertising.

"It was a real eye-opener," Davenport says. "One thing that still exists is 'black journalism,' or black PR, pay-for-play... It is interesting work, but it can be a little unsettling at times."

The upside, he continues, is that reporters in Russia have to have a strong knowledge of the systems of ownership, the publications' loyalties, and the history of businesses to be effective at their jobs - which they are.

"The reporting is absolutely first-rate," Davenport says.

The PR industry is as accepted as it is in the West, Picou notes. "We see that there are a lot of proactive areas like corporate, consumer, or financial. But a lot [of people] do not see the role of strategic PR. There is still a lot of education that needs to be done."

Most PR agencies are based in Moscow, but there are a dozen other cities, such as St. Petersburg, with populations exceeding 1 million people. Local PR experts say Russian business often identifies more with Asia than with the rest of Europe, though Diukarev adds, "the business climate in the Asian portion of Russia is still undeveloped... but is gaining in sophistication and importance very quickly."

Almost all leading international firms have a presence in the market, including Ketchum and Burson, Diukarev says.

In addition, there are several small agencies with one to 18 employees that work on very local businesses, adds Picou.

Because the PR scene is so new, it's competitive, but the employees are young, and some are inexperienced. Some have been formally trained in PR, but it isn't the norm.

The majority of multinational companies operating in Russia have in-house PR departments. They are generally small, specialized, and rely on outside PR firms - though it can be hard to establish a productive relationship.

"Russian local firms do not yet consider PR an important discipline and delegate PR duties to human resources, marketing, legal staff, or the managing director's assistant as an 'extra' task," says Diukarev.

Political PR gave rise to commercial PR in Russia, but it has had a spotty success rate. PR reps brought in to help Boris Yeltsin's 1996 presidential campaign for re-election did not see their ideas and strategies implemented. Before the election of Putin, there was more political debate in Russia; now, the audience is reduced, and more of the PR initiatives come straight from the Kremlin.

The media scene

The most popular newspapers are the tabloids, such as Komsomolskaya Pravda, Moskovsky Komsomolets, and Argumenty i Fakty, which are full of features and entertainment, and not as authoritative as the international business dailies.

The English-language newspapers printed in Russia are mainly based in Moscow, such as The Moscow Times, the first daily English-language newspaper in Russia, published by Independent Media. Most of its readers are ex-pats, business-minded people, and English-speaking Russians. The Russian Journal is an English weekly written primarily by Russians.

The main difference many PR pros cite between US and Russian media is the number of journalists.

"For me personally to see [media] change, there is a large media corps in Moscow, hundreds and hundreds," says Picou. At events, she says, the turnout is often impressive. "In France, it will be 10 to 15 [journalists who attend. In] Russia, 100."

Ben Roome, head of corporate communications for Nortel who has worked extensively on promoting Nortel in Russia, says the same thing. "We find the Russian media very keen consumers of our telecoms messages, with high turnout and coverage for events and announcements," he says.

However, broadcast is a tougher sell in Russia than the West. Most of the TV stations are still government-owned or -run, with far fewer choices than in the US. There is little space and a lot of interest.

"It is very difficult to get on TV," Picou attests.

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