Financial PR, say its promoters, is growing up, becoming less of a
process business, more a true consultancy. Gone are the days when a
financial PR firm could survive by providing a mere results posting
The talk is of added value and of strategic communications
Buoyed by fat profits from transactional work, many financial PR firms
have been expanding.
The experiments with bolt-on lobbying divisions may have failed but
several financial PR firms have now set-up their own corporate
divisions. Financial Dynamics and Gavin Anderson both did so last year -
following a pattern already set by Ludgate, Citigate and Shandwick.
As for lobbying - or public affairs to use the more polite term - many
firms now include this as part of the ’full service’ offer. Brunswick
has done so for some time. But now even smaller firms which have never
marketed themselves as lobbyists have found themselves called upon to
provide political advice. Rather than use a lobbying specialist, East
Midlands used its financial PR firm Finsbury for regulatory and
political advice during its negotiations with Dominion Resources.
Meanwhile Dominion’s agency The Maitland Consultancy is considering
setting up a special regulatory affairs unit.
’It’s something companies are increasingly turning to financial PR
companies to provide - particularly as they shy away from full-blown
lobbying companies in the aftermath of the cash-for-questions,’ says the
head of one financial PR firm.
The emphasis here is on feedback and advice, rather than buttonholing
MPs. Likewise, the growth in the core financial PR activity is in the
advisory role rather than the executional. This may be being driven
partly by the burgeoning in-house sector.
The merchant banking sector is one which has seen a number of new
in-house roles created, or existing ones upgraded. According to Philip
Ranger, head of corporate communications at Charterhouse, he’s not used
a FPR agency in the traditional way for almost four years. ’Five years
ago we used to use an agency for all aspects of press relations work.
Now that’s my job. I use an agency tactically rather than
He also makes a point which will strike a chord with many other in-house
practitioners: ’If you rely on an external source for all your advice
and strategic input, the corporate communications function remains
’well, they do events don’t they?’. I think there used to be a time,
perhaps five years ago, when you did wonder what the in-house
communications department was there for, because of the (range of)
services being purchased by clients.
Those agencies that are still offering that are finding it’s a shrinking
It is a trend that has been worrying Chris Matthews, chief executive of
Shandwick Consultants. He predicts a major restructuring of the
financial PR sector. ’Big agencies are giving clients all this stuff
they don’t want - reports, stock market announcements. It’s nice but of
They know their industry better than we ever will - what they really
want is a particular edge in one or two areas, where they don’t have
And he asks: ’Are people doing anything about it? We’re all chasing
growth and hiring staff - but many of those available are career
consultants who don’t know what it’s like on the other side.’
Richard Sermon, non-executive chairman of Shandwick Consultants predicts
a polarisation of the consultancy sector into large firms, with access
to an international network and small, niche players while the mid-size
agencies will find themselves squeezed out. He points to two factors: a
strengthening in-house sector and the need for agencies to invest in
He also sees an increasing emphasis on the core skills of consultancy -
media handling and news management - which even large in-house
departments might not necessarily have. The focus on media relations
skills is also being driven by the demands of the journalists
As joint managing director of Square Mile, Tim Jackaman points out
papers have moved away from seeing themselves as places of record. Even
the Financial Times has reduced the amount of space it gives to smaller
company results - now running them in the form of a table. Jackaman sees
this as just the latest sign of a shift away from an emphasis on
statistics and scoops, and towards analysis and opinion. The
beneficiaries of this, he believes, will be those PR people who can show
they have real knowledge, and a finger on the trends which others
As former Telegraph news editor, now Dewe Rogerson director, Andy
Cornelius says: ’I think these days journalists are looking for a much
better informed PR - they are looking for people who understand the
subject better. Journalists only want to speak to PR people that can
With tougher regulation on the use of insider information, the challenge
now for PR people is to shift the basis of their relationship from leaks
to real knowledge of a particular sector - in a sense, to show the flip
side of the strategic consultancy role. Consultant Antony Wreford cites
the way some of the management consultancies have established themselves
as expert witnesses - a source of ideas and information without an
obvious promotional motive - as an example of the way this can work.
PR people, he points out, often have an international perspective which
business journalists rarely have, and can therefore be useful in
pointing out trends overseas which affect the UK.
One thing hindering PR consultancies in developing this role further may
be the lack of sector specialism - PR agencies have traditionally been
opportunist rather than specialist in their new business strategies with
the recent exception of the utilities.
According to Guardian City editor - and soon-to-be PR consultant -
Patrick Donovan, this has favoured the in-house operator: ’On particular
issues, like electricity, in-house PR teams are quite useful. Agencies
don’t necessarily have the wealth of expertise a specialist in-house
does. But we are beginning to see PROs in particular sectors being used
by journalists to give impartial advice on specfic issues.’
PRESS RELATIONS: AN INCREASING DEPENDENCY
The comment of one senior financial journalist about PR people -
’they’re all lying bastards’ - indicates the ’creative tension’ that
still exists between the two parties. There is precious little there to
indicate that financial PR is becoming more strategic and less
Jane Fuller, UK companies news editor at the Financial Times says the
primary value of financial PR people to her is that they can provide
access to senior executives and that they help the company write press
releases which are more transparent than the company might otherwise be
inclined to do it.
Fuller says she has also been doing the rounds of PR agencies to enlist
their help in getting better photographs - the FT made all its staff
photographers redundant last April.
Michael Walters, deputy City editor of the Daily Mail rehearses a few of
the old bugbears: press releases not delivered promptly enough, and
people given as contacts when they are away from the office.
On a more general level he points to the trend for companies to dispense
with set-piece press conferences for their annual results in favour of a
series of short briefings between the directors and selected
It is, believes Walters, quite deliberate and part of the increasing
manipulation, designed to put more power in the hands of the PR
On a more positive note he agrees some PR people are useful in terms of
spotting trends, discussing wider issues - ’some are very useful, others
sadly aren’t’. But it is the former he will spend time on.