Who could have predicted that in 2006, one of the biggest PR stunts would be Tory leader David Cameron awkwardly addressing a video camera from his kitchen? With 160,000 viewings in its first few days, WebCameron demonstrated the new power of blogs in the world of communication.
‘2006 has been all about the online comms revolution,' says Edelman London CEO Stuart Smith. ‘PR 2.0 will fundamentally change our business.'
When Google paid £880m for YouTube in October, it became one of a trio of ‘mainstream' media groups to have invested heavily in social media (following ITV's purchase of Friends Reunited and News Corporation's acquisition of MySpace in 2005).
Everyone, it seemed, wanted to blog. The Prince of Wales (at princeofwales.gov.uk) showcased his ‘day in a life', while SNP leader Alex Salmond launched a podcast and videocast that has also been featured on YouTube.
‘Our industry is continuing to see the impact of new and social media, particularly in the breaking of major news,' says Vodafone group corporate affairs director Simon Lewis. And according to Tim Dyson, CEO of agency Next Fifteen (and author of siliconvalleypr.blogspot.com), every print article on average spurs one and a half blogs on the same subject.
Perhaps bloggers were kept busy because 2006 was a year of crisis - Cadbury's salmonella recall, BA's price-fixing probe, the Wembley Stadium palaver, Dell's combustible laptops - and of rebirth (Kate Moss and Marks & Spencer).
According to the Pew Research Centre, nine per cent of blogs on Dell were mentioned by the news media - another indication of how ‘citizen journalists' and the like are gaining influence and credibility.
From caution to celebration
In January, the PRCA reported that only a quarter of consultancies were more optimistic about the year ahead than they were in the previous year. But by April, on the same day PRWeek published its Top 150 Consultancies report - led by the Bell Pottinger Group - the PRCA had happier news: half of its member consultancies had reported an increase in client budgets.
‘The good times were definitely returning,' says Beattie Communications founder Gordon Beattie.
In the Top 150 report (PRWeek, 21 April), 90 per cent of agencies posted fee-income growth. Weber Shandwick CEO Colin Byrne cites healthcare as the fastest growing sector. ‘Pharma's reputational woes - typified by The Constant Gardener and the botched "elephant man" drugs trial - helped stimulate impressive income growth,' he says. Indeed, PRWeek's healthcare league table (PRWeek, 19 May) reported an 18 per cent increase in total fee income for the top 25 agencies.
Buy, buy, buy
Many had predicted 2006 to be a year of agency acquisitions, but such activity did not take off until the autumn. The landmark acquisition was undoubtedly Financial Dynamics' sale to US group FTI Consulting for £139m (PRWeek, 15 September).
In October, Lord Chadlington's ever-expanding Huntsworth Group bought MMD, which has 18 offices across central and eastern Europe, and corporate comms adviser Quiller. Other M&As included Lansons Communications' acquisition of PA firm The Jackson Consultancy; UK-listed holding company Hasgrove's purchase of Belgian public affairs firm Interel; Cardiff-based Freshwater's regional expansion via Sheffield's Kath Harding PR and Southampton B2B tech adviser Black & White Communications; and Fuse PR's sale to US consultancy Racepoint Group.
Some, though, expected more. ‘There has not been a huge amount of PR agency M&A activity this year,' says Results International partner Jim Surguy. ‘Quite a lot of the PR middle ground has been bought up already. In addition there doesn't seem to be that much appetite for PR from the AIM-listed acquirers. Instead there's a big emphasis on buying digital assets.'
Another interesting deal to note was tech agency Rainier PR's sale to marketing group Loewy, which followed the latter's purchase of consumer agency BMA Communications in 2005. ‘PR is a good addition to the mix,' says Loewy CEO Charlie Hoult on the acquisitions.
Terror and politics
There was no shortage of issues management for top PROs. The Metropolitan Police, somewhat bruised after last year's shooting of Jean Charles de Menezes, was slammed in a London Assembly report for its slow comms response to the 7/7 terror attacks. Its anti-terror raid in Forest Gate was just as controversial, but this time the Met's comms team pulled out the stops to defuse tension among local Muslims (PRWeek, 23 June).
Elsewhere, heightened security following a foiled terror plot sent airport operator BAA - and the UK's airlines - into crisis management overdrive. BAA Heathrow recently beefed up its comms team, replacing outgoing head of media relations Jo Bird with two new postholders, while Maitland bagged a corporate account to bolster BAA's reputation (PRWeek, 20 October).
And it was another tough year for PROs at British Airways. In addition to airport security issues, head of comms Iain Burns and commercial director Martin George both left in the wake of price-fixing allegations, while its Battle of the Cross was ongoing as PRWeek went to press.
Other PROs in the spotlight were more fortunate. BNP leader Nick Griffin, and the party's publicity director Mark Collett, were both acquitted of inciting racial hatred in November. In the aftermath, Collett labelled the BBC ‘cockroaches', while Gordon Brown said race laws may have to be tightened.
The Chancellor, of course, was practising his leadership skills as the ‘PM-in-waiting', following months in which Cameron - named PRWeek's Communicator of the Year - had stolen the limelight, especially in policy areas such as the environment.
‘The Conservative Party has tackled Labour head-on in policy areas where the Tories have traditionally fared poorly - the NHS, the environment and social policy,' explains APCO Worldwide managing director Simon Miller.
For Euro RSCG Biss Lancaster chairman Graham Lancaster, the environment's rise in prominence has been the story of the year. He cites offsetting schemes - offered by organisations such as The CarbonNeutral Company - as a trend to watch (PRWeek, 17 November). October's publication of the Stern Review gave economic weight to the greens' argument, and has cemented the environment as the cause de jour, both politically and commercially.
The big industry issues
According to Rentokil Initial head of corporate comms Malcolm Padley, in 2006, everything was labelled a ‘PR stunt'. ‘The words "PR stunt" seemed to be abused at every opportunity,' he laments. ‘The low point was a senior US State Department official dismissing the suicides of three inmates at Guantanamo as a "PR stunt" aimed at discrediting the US.'
Padley bemoans journalists' lack of PR appreciation, citing their apparent fixation with the amount of government money spent on advisers. The Daily Telegraph, for instance, claimed that the numbers of press officers had more than trebled under Labour to 1,815. The Cabinet Office said the true figure was 400.
Padley says he would like the CIPR and PRCA do more to address such misconceptions and improve the reputation of the industry. But the CIPR has not exactly been idle this year. It launched the industry's first procurement guide in July in partnership with COI Communications, hosted its first diversity conference, and last month pledged to get tough on agencies that act unethically.
‘The strengthening of our Code of Conduct will help us to safeguard the reputation of the industry by allowing us to take more effective action against those who bring the profession into disrepute,' says CIPR deputy director-general Ann Mealor.
But the trade body's most gritty battle has been with the Newspaper Licensing Agency, whose introduction of eClips - by which clippings agencies must pay royalties for the articles they use - divided PROs and angered monitoring companies. The latter even claimed the move could put them out of business. In April, the CIPR attacked the NLA's monopoly, claiming that 60 per cent of MPs thought it was unacceptable for the group to have sole rights to newspaper copyright licences.
Perhaps the biggest industry story is only just getting started though: changing service provision rules under TUPE - a subject that split the CIPR's Francis Ingham and the PRCA's Patrick Barrow (PRWeek, 17 Nov). ‘TUPE is only just becoming an issue as the potential implications come to light,' says AAR head of PR Alex Young. ‘It will concern clients and agencies, but the latter are burying their heads in the sand.'
Public affairs and the City
Public affairs consultancies generally had a strong year, and many are predicting an even better 2007. ‘It's a very interesting political climate, for a change,' says Bell Pottinger Group chairman Kevin Murray. ‘Blair's days are numbered, and the likelihood of a Brown government means that a lot of legislation that affects clients is going through. This includes the recent Ofcom ruling on the TV advertising of junk food to children, and regulations on financial reporting. This is good news for our public affairs business.'
Meanwhile, financial PR practitioners could hardly have had a better 12 months. A buoyant stock market and high levels of investor confidence have contributed to a bumper year in the City. Private equity funds have grown in importance and prominence, a host of overseas companies have floated in London, and there have been some very high profile M&As (PRWeek, 24 November).
The boom in private equity has been one of the most talked about business trends in the City this year, with record amounts of money available for purchases and a number of listed firms being taken into private ownership. Financial Dynamics alone has worked on 30 private equity transactions in the past 12 months. Brunswick, Finsbury, Tulchan and Citigate Dewe Rogerson have also been extremely active in terms of private equity deals.
Encouraging for the sector is the fact that increasing pressure for disclosure and transparency is leading more private equity groups to seek financial comms counsel.
Foreign ownership of famous British companies has also been an ongoing - and emotive - theme, with BAA and P&O acquired by Ferrovial and Dubai Ports World respectively. And the London Stock Exchange is currently being pursued by rival US stock market Nasdaq.
The biggest deal of the year was Mittal Steel's successful £15bn bid for Arcelor. Although neither company is UK-based, the PR campaign was largely fought and won in London. Maitland acted for Mittal, while Finsbury worked on behalf of Arcelor.
More recently, the battle for ownership of ITV - which this month snared the BBC's Michael Grade as executive chairman (see News Analysis: ITV failing to make the grade) - and the very public spat it has triggered between Sir Richard Branson and Rupert Murdoch, has been a pleasure for outsiders to follow.
‘The market has been strong,' says College Hill chairman Alex Sandberg. ‘We have worked on more than 80 transactions, including Old Mutual's £4bn offer for Skandia.'
Sandberg adds: ‘I think that Russia will continue to be a huge topic, especially in terms of its oil power. The [alleged] Alexander Litvinenko poisoning is another indicator for me that media interest in the region will only continue.'
But let us not pretend that 2006 was an unparalleled success. The Countess of Wessex's former agency, RJH PR, was wound up in the summer; fashion PR agency Judy Bennett closed; and Revolver disbanded its London office.
Agencies have had to cope with the fact that clients increasingly want to use them on a project basis, the growth of in-house comms departments, and tighter budgetary control. Moreover, many agencies continue to overservice their clients.
According to the PRCA, overservicing reached an all-time high of 33 per cent during Q2. And while PRWeek last month reported on the record number of graduates being recruited, a number of big employers have wielded the axe. In March, Barclays axed around 50 jobs in its corporate affairs department; in April, Northamptonshire County Council revealed it was halving the size of its comms team; and in September, Thames Water axed its PA team.
Meanwhile, Beattie Communications chairman Gordon Beattie says the problem of finding good staff is worsening: ‘There are too many people running around with fancy titles who lack basic PR and management skills.'
FROM BLOGS TO 'FLOGS'
01. Anyone who didn't already have one started their own blog. In May, CIPR president Tony Bradley launched PRVoice (prvoice.typepad.com); in October, Fleishman-Hillard US produced the Out Front blog ‘dedicated to the idea that gay and lesbian communications and marketing is important, relevant and appropriate'.; Novell's chief marketing officer John Dragoon unveiled his own blog in May; Edelman CEO David Brain launched his 60-second videoblogs, sixtysecondview.com.
02. Anyone who wasn't in a blog was on YouTube instead. Bob Leaf, Burson-Marsteller's septuagenarian former chairman, gave a one-minute speech on how PR had changed in his 50-year career. Even the Government has had a go, posting two short videos on ‘transformational strategy' and how it was ‘consolidating departments'. And last month, Borkowski PR shunned the usual ‘we've relocated' postcard with a stop-frame animation.
03. PROs who couldn't infiltrate other blogs simply started their own. In July, Dell launched One2One, which tells the ‘Dell story' and ‘allows the company to interact with its various stakeholders'. Bloggers didn't take long to spot the irony though; one blog, by Like It Matters' Brian Oberkirch, reads: ‘Better late than never. I had good fun last summer saying "Dude, you're getting Dell'd" whenever I referred to companies that were being savaged online and not making a move to deal with the criticism at all.'
Elsewhere, The London Business School launched mbablog.london.edu for MBA applicants who want to know more about life as part of the London Business School community. Meanwhile, myjewishlearning.com began its own blog to focus on jewish cultural life. But marks for the most inventive blog have to go to Wensleydale Dairy Products, which in September produced a blog to raise support for a campaign to protect the origins of Real Yorkshire Wensleydale Cheese. The blog was created by Green Communications, after Wensleydale received its Protected Designation of Origin mark, which protects EU foods based on their geographical area of production.
04. Fake bloggers (floggers) got found out. In August an apparently homemade movie mocking Davis Guggenheim and Al Gore's An Inconvenient Truth was revealed to have actually come from Republican-leaning PR firm DCI. It just so happened to have oil giant Exxon as a client. In May, Southampton Football Club's PR agency The PR Office was exposed for being behind fans' online defence of the club's management. More recently, consumer champion website consumerist.com reported in October that McDonald's PROs, posing as consumers, were extolling the virtues of the Big Mac and fries. Meanwhile, Edelman got caught with is pants round it ankles for its part in a pro-Wal-Mart blog - ‘Wal-Marting Across America ' - about a couple travelling across the continent.
05. You can even go to blogging conferences now - indeed, it has not taken long for blogging to become a conference topic in its own right. The season kicked off with February's Blogging4Business in London (also live on the internet, of course), with speakers including Anthony Mayfield, director of Harvard, and Mark Rogers, founder of Market Sentinel. It was followed in June by blog.ac.uk, aimed at the educational blogging community. And those in healthcare might have spotted Blogging HC2006 - the theme of the 23rd conference of the NHS's Health Informatics.
MAKING A DIFFERENCE
The story Stop Climate Chaos publishes ‘how to' guide to saving energy.
The reason Environmental concerns were rising up the political agenda. Stop Climate Chaos had a chance to steer the debate six weeks before the Stern Review on the economics of climate change.
The story School Food Trust bids to lift public confidence in school meals.
The reason At the height of the public debate on what children eat - especially at school - the body responsible for revolutionising the quality of school meals brought in a director of comms and began the hunt for external PR support.
The story Bottled water firm Belu launches an eco-friendly container.
The reason The ethical bottled water firm, which donates its profits to global water projects, hired Redhead PR to launch the UK's first biodegradable plastic bottle. The launch made the front page of The Independent.
USING THE 'SOAPS'
The Alzheimer's Society worked with researchers at Granada on a Coronation Street storyline relating to factory boss character Mike Baldwin's battle with the disease. Corrie scooped a Best Soap Storyline award at the TV Quick and TV Choice Awards, while the society's helpline got a record number of calls.
An EastEnders storyline about the birth of a Down's Syndrome baby came to fruition after BBC script researchers collaborated with the Down's Syndrome Association on medical and technical issues. The DSA put researchers in touch with families affected by Down's to help develop ‘real life' scenarios and is treating the prime- time exposure as a huge opportunity for raising awareness of the condition.
OBESITY REMAINED A MEDIA OBSESSION IN 2006
The ‘obesity' issue showed no sign of waning. According to Factiva Insight, every major national newspaper featured more stories on it in 2006 than they did in 2005.
See below for PRWeek's month-by-month rundown of the major events that emerged from the industry during the past 12 months.
2006 - A YEAR OF CORPORATE CRISIS
Alex WOOLFALL, MD, Issues & Crisis Management, Weber Shandwick ‘It's hard to know where to start. Sony, Dell and Apple all had to contend with fears over the safety of lithium batteries, leading to product recalls. Cadbury faced a nightmare summer after a salmonella scare cost it £20m and led to headlines such as "I'll Sue Cadbury Over my Bug Hell". BP had its share of woes, too, shutting down the largest oil field in North America after a serious spill. This was blamed for sending oil prices surging. Then came allegations that the shutdown was really a strategy to manipulate the market - fiercely refuted.
‘But the crisis that sticks in my mind is the botched TeGenero drugs trial. The side effects suffered by six young people at Northwick Park Hospital in Middlesex made global headlines. And it drew a huge question mark over the safety and ethics of testing drugs on humans. We read with horror stories such as "My Boyfriend Looks Like the Elephant Man" (Daily Express).
Overnight, drugs firms, regulators and would-be human guinea-pigs began to think again about the risks involved in this type of trial.
‘Of course, a crisis can come in all shapes and sizes. For the BBC, picking up the wrong person from reception left a lot of people with eggs on their faces, and got acres of press coverage. Who will forget the live interview with a bewildered Guy Goma, who came for a job vacancy in IT, but was bundled into the studio after being mistaken for an expert on the music download industry?
‘Will it all be the same next year? Well, there's never a dull moment in this game, that's for sure.'
SOME OF THE STORIES COVERED BY PRWEEK - 2006
Virgin Atlantic director of corporate affairs Paul Moore quits after nearly nine years, and is replaced by ex-Eurostar comms director Paul Charles; Bite buys tech shop Credo Communications; 888.com splits from Frank PR; The PR Office acquires The Seven Partnership; Granada's ex-head of comms Susan Donovan joins John Lewis in the same role; Ronnie ‘the Rocket' O'Sullivan hires Frank PR; Islington Council poaches neighbour Camden Council's Emma Marinos as its new PR chief; London Underground hires Consolidated, Cohn & Wolfe and Idea Generation to improve its reputation; The Observer moves to ‘the Berliner' format; 3 director of comms Ed Williams joins Reuters; Victoria McQuaid, co-founder of Big-mouths PR, launches Chatterbox PR.
Charlotte Oades, president of Coca-Cola GB, becomes director of corporate identity, public affairs and communications Europe; Hewlett-Packard transfers up to £2m of pan-European business to Burson-Marsteller; 118 118 hires Chime to woo directory services users from rival companies; Club Med enlists Four Communications to ditch its holiday club image; Google hires Portland PR, Octopus Communications and Cow PR for corporate and B2B work; Olympus ditches August.One Communications after a decline in sales of digital products; Ronnie Scott's - the home of jazz - announces plan to appoint first PR agency; BA chief lobbyist Andrew Cahn quits after six years to become CEO of UK Trade and Investment; Vodafone pinches Orange's Kate Haddon to head its UK internal comms team; Commodore, the iconic 1980s computer brand, turns to Pleon for comeback bid.
Max Clifford challenges PROs to see for themselves ‘just how far removed I am from the PR professionals'; The FA hires Ruth Wicks, ex-head of marketing for the Millennium Dome, as its new head of PR; Claudia Schiffer turns to The Outside Organisation to handle her image; Defra brings in new head of strategic communications Jo Rushton as it prepares for bird-flu outbreaks; YMCA restructures its comms team as it tries to shed its Village People image; Roger Sharp, special adviser to Culture Secretary Tessa Jowell, quits to become group director of public affairs at O2; Rolls Royce comms chief Duncan Campbell Smith quits; Mr Kipling brings in Grayling to reverse fall in cake sales; Martin Patterson exits as director of comms at the Food & Drink Federation.
The Body Shop looks for first retained consumer agency following its sale to L'Oreal; Next Fifteen reports half-year profits up two per cent to £1.4m for the six months to 31 January; Eccentric inventor Sir Clive Sinclair launches the A-bike with Whiteoaks PR; Lansons acquires public affairs firm The Jackson Consultancy; Royal Mail puts £8m worth of PR business up for grabs; In its first full year after acquiring rival Incepta, Huntsworth reports rise in PR income of 4.4 per cent; Cabinet Office reveals Engage, its strategy to restore public trust in government; Omnicom reports Q1 increase in PR income - up 1.5 per cent to £145.6m; The Lawn Tennis Association hires Splendid to revamp the image of the game.
PRWeek reveals Tesco's growth is damaging its public image, with 38 per cent of consumers willing to boycott the store if it ‘harms' independent shops; ABTA's director of corporate affairs, Keith Betton, quits to launch his own agency; First-quarter revenue figures at WPP show income from PR and PA rose from £117m in 2005 to £140.6m this year; London Underground launches an internal TV channel to communicate with its 12,500 staff; Liberty hires its first-ever PR agency, Camron PR; Norfolk Police scraps its director of communications role, after the resignation of Philippa Winterburn; Vodafone cuts ten PROs in bid to save money; Tom Howard-Vyse, the top PR man at the London Eye, joins Harper Collins as communications director; Marks & Spencer CEO Stuart Rose tops PRWeek's CEO Watch; New Lib Dem leader Sir Menzies Campbell hires Puja Darbari, account director at The Forster Company, as his press secretary.
Under-fire Health Secretary Patricia Hewitt enlists Karen Livingstone, former campaigns manager at TGWU, as her adviser, after saying the NHS had had its ‘best year ever'; Social networking site Bebo hires its first director of comms, Sarah Gavin; Israel signs Halpern to improve its tourism image; Heinz gives its WeightWatchers business to Cow PR; Slough Council joins the World Cup bandwagon by urging residents to make recycling ‘Your Goal'; Royal Mint severs 13-year relationship with Good Relations; Thank You for Smoking film satire released; Easyjet sets up a rapid- response unit to counter claims about the environmental impact of flying; PRCA bids to boost the cred of PR consultancies.
Charles Kennedy's former press secretary, Jackie Rowley, joins the GMC as director of comms; Cyan Books drops Raft PR after its authors accuse the agency of overpromising and under-delivering; PRWeek launches its first podcast with an interview of Sir Christopher Meyer, chair of the Press Complaints Commission; English cricket's Barmy Army hires its first PR agency, Paul Ridley Ltd; Chelsea Football Club hires Hill & Knowlton to take the brand into America; London Underground announces no plans to replace head of communications Andrew Jones after he leaves to join the Charities Aid Foundation.
Jayne Mayled, director of comms at Boots, leaves after more than 20 years with the company; The Red Consultancy partners blogging agency Shiny Media to form new-media consultancy Shiny Red; The Nuclear Decommissioning Authority put its entire PR business up for review; Taylor Herring is tasked with introducing to consumers the new-look Rupert the Bear; Weber Shandwick's vice-chairman for Europe, Sally Ward, and senior vice-chairman David Yelland, both quit; Stag Republic and Hen Nation - organisers of stag and hen weekends in eastern Europe - hire BGB Communications; The Welsh Assembly uses Consolidated Communications as smoking ban looms.
Multiplex hires Dan Bridgett as UK head of corporate affairs as the Wembley Stadium fiasco shows no sign of waning; US group FTI Consulting acquires Financial Dynamics; Microsoft loses senior director of corporate comms EMEA Mike Love; David Hasselhoff enlists Max Clifford Associates; Rachel O'Reilly, head of comms at TUI Thomson, leaves to become director of Siren PR; Thames Water axes its PA department and scales back comms, despite criticism over leaks; BAA loses media chief Jo Bird to the British Transport Police (as head of media relations and marketing); PRWeek poll: 78 per cent of Britons believe the Muslim Council of Great Britain has not done enough to prevent radicalism among its members; PRWeek poll: most think Chelsea FC ‘bought' success.
Borkowski PR red-faced after an employee sends an email criticising Golden Goose PR for being ‘unable' to lure celebs to a launch event; Outside wins brief for this year's X-Factor winner; Sony Computer Entertainment ends eight-year tie with Jackie Cooper PR because of Edelman's work with Xbox; British Airways head of communications Iain Burns quits over price fixing allegations; The Fish Can Sing wins brief to resurrect the Ray Ban brand; COI sets up diversity PR unit; Freud lands the Fosters account; Texaco hires Good Relations Consumer for CSR drive; The Alzheimer's Society is to lobby the Department of Health after NICE rejects two drugs; Rainier PR is sold to Loewy; Henry's House bags consumer account for the newly united NTL Telewest and Virgin Mobile.
Cadbury Schweppes brings in Blue Rubicon to advise on corporate PR; As the eagerly awaited Borat film goes on release, Kazakhstan confirms plans to bring in PR support; The UK's leading PR consultancies are lambasted for their own environmental credentials; CIPR pledges to ‘get tough' on poor PR conduct; The Olympic Delivery Authority installs Tom Curry as its first head of media; NTL drafts in M:Communications to win support for its mooted £5bn ITV bid amid scepticism from media, investors and analysts; The Liberal Democrats draft in veteran party aide Olly Grender in the wake of director of policy and comms, David Norman's sudden exit; A PRWeek survey finds that 44 per cent of Britons think Madonna's adoption of a Malawian infant was a ‘cynical ploy' to boost her own profile; Ben Hayes quits as top communicator at the Association of the British Pharmaceutical Industry after 15 years.
The Church of Scientology says it will treble the size of its UK PR team to capitalise on its soaring media interest and high-profile followers, such as Tom Cruise; Edward Mortimer, director of comms and head of speech-writing at the UN, quits to join global think-tank the Salzburg Seminar; Boots reveals plans to reduce its consumer roster of agencies from seven to two to avoid ‘journalist confusion'; Internal comms specialist Trident Communications merges with local government agency TheLimehouse Group; The Red Cross hires its first agency, Frank PR, to promote its fundraising awareness week during 6-13 May 2007; Lewis PR wins £500,000 pan-European account from printer firm Lexmark.