Czechs sign up to PR era - Since the ’velvet revolution’ of 1989, the Czech Republic has embraced Western business methods, including PR Danny Rogers reports.

Michal Donuth, head of Burson-Marsteller Prague, tells a joke about a nouveau-rich Russian who, while bathing on the beach at Nice, comes across a mythical golden fish, believed to confer boundless wealth on the lucky finder. The Russian picks up the fish and asks it: ’What can I do for you?’ The humour loses something in translation but the message is clear - market capitalism is no longer new to the former Eastern bloc.

Michal Donuth, head of Burson-Marsteller Prague, tells a joke about

a nouveau-rich Russian who, while bathing on the beach at Nice, comes

across a mythical golden fish, believed to confer boundless wealth on

the lucky finder. The Russian picks up the fish and asks it: ’What can I

do for you?’ The humour loses something in translation but the message

is clear - market capitalism is no longer new to the former Eastern

bloc.



In the hour it takes to walk across Prague, central Europe’s most

beautiful city, one passes medieval vaults, Gothic cathedrals, and

then ... yes, Tesco and Marks and Spencer.



Since the ’velvet revolution’ of 1989, and even more so since the split

with its Slovak neighbours in 1993, the Czech Republic has thrown itself

into the arms of Western Europe. The ultimate prize is the prospect of

EU membership.



Adding passion to this embrace is prime minister Vaclav Klaus who, we’re

told, has a large portrait of Margaret Thatcher behind his desk. He,

rather than president Vaclav Havel, is credited for the Czech ’economic

miracle’.



More than four-fifths of the economy has now been transferred into

private hands and the British retailers are the latest to contribute to

an influx of Western capital. The Czech market is not the biggest in

central Europe (Poland is four times the size) but it is roughly twice

the size of Hungary or Slovakia.



It’s tempting to compare the Czech Republic’s adolescent PR industry to

that of early eighties Britain: staffed predominantly by former

journalists; enjoying the fruits of privatisation; and with a growing

recognition of consumer brand power.



But a closer look reveals some important differences; characteristics

that reflect the country’s distinctive historical experience and

culture.



There are no definitive statistics on the size or growth rate of the

Czech PR industry, but Michal Kusmiak, managing director of Hill and

Knowlton in Prague, estimates 30 to 40 per cent annual growth.



He says: ’Back in 1991 total billing was around dollars 3.5 million, now

it’s more like dollars 35 million. So the industry has grown by ten

times in five years, although from now on it will be slower.’



Understanding the Czech condition



’Prague is important because a high number of multi-nationals have their

main central European office here. Its US chamber of commerce is also

the strongest in the region,’ says Kusmiak.



He also believes there is a cultural explanation for the phenomenal

growth rate: ’I have noticed that while the Poles and Russians like

direct communication such as advertising, the Czechs prefer explanation

and analysis, so public relations does well.’



Hill and Knowlton’s business is reaping the benefits of the

privatisation programme. Its biggest client, the formerly state-owned

Czech Electric, is building a nuclear power station on the Austrian

border. H&K’s work on their behalf includes lobbying both the Czech

parliament and US Congress for investment. The agency is also handling a

broad communications programme for the privatised pharmaceutical giant

Chemapol.



In the other exploding sector of consumer products, lucrative work comes

from Whirlpool and Pepsi.



British company Bass has been equally quick to spot the opportunities

for strong brands in the republic. It is the only foreign brewer to have

gained the trust of the fiercely proud Czech beer industry and is one of

the first companies to employ a formal in-house head of corporate

affairs.



Diana Dobalova, a young Slovak, joined Bass in September to handle all

corporate-related matters - including internal and external relations -

for Prague Breweries, in which Bass recently acquired a controlling

interest. Dobalova is understandably excited: ’The merger represents

some challenging issues. In a company like Bass there is also great

synergy between corporate affairs and brand marketing.’



Dobalova, formerly with The Rowland Company admits she has the advantage

of being a Czechoslovak national and understands the language, the

media, the Czech mentality and the level at which to pitch a

campaign.



’In order to communicate, you have to go back a stage and educate your

target audience. The market is getting more sophisticated but there’s

still a need to build basic product knowledge,’ she says.



Nevertheless Dobalova points out that the Czechs are highly media

literate: ’When you’re travelling on the metro you notice that 40 to 50

per cent of people are reading newspapers. They’re hungry to learn.’



B-M’s Donuth believes there is also a job to be done in educating

clients: ’We don’t have a word for PR here. We used to have a word for

propaganda.



You explain the difference.’ he laughs mischievously. ’We’re 15 to 20

years behind western Europe and our role as consultants is still very

educational. The concept of changing a perception of a company through

strategy is relatively new.’



Relationships with the media



Donuth also stresses the need for the industry to draw a clear line

between advertising and PR. He highlights a serious concern: ’Some of

our competitors buy coverage. They pay journalists directly, some of

whom actually have a price list. This is damaging the reputation of PR.’

Kusmiak agrees, estimating that as much of 30 per cent of editorial

coverage is paid for.



Donuth is a member of the executive committee of the trade body APRA

(Asociace PR Agentur) set up in November 1995. With around 40 members it

aims to educate clients about PR’s contribution to business and

establish a code of conduct.



However membership remains limited and Donuth admits that as yet it

lacks teeth: ’The difficulty is getting people to adopt a code of

ethics. It’s still early days and it’s going to take scandals and

bribery made public before an ethical environment is created.’



Vincent Boland, the FT’s central European correspondent since 1992,

recognises the weaknesses of his Czech journalist counterparts: ’The

Czech newspapers aren’t independent enough, they don’t show enough

initiative and rely too much on official sources.’



But Boland is also critical of the way organisations disseminate

information to the media: ’People don’t want to talk to the press.

There’s a lot of gossip, but information is scarce. Some PR people

bridge the gap, but managers in many companies feel no pressure to

communicate.’



David Stamp, Reuters’ chief correspondent in the Czech and Slovak

republics, agrees: ’I don’t deal that much with PR agencies. Big

institutions tend to do PR in house and I find it difficult to reach

spokesmen and to get information, which is still jealously guarded.



’Another problem is that relationships between a company and the media

are often based on personal friendships and it can be a problem getting

even basic information unless it’s the right journalist making the

call.’



Donuth is cautiously optimistic: ’Agencies are increasingly becoming

partners with the media but it is the first stage of a relationship.

It’s a case of ’dating’ rather than a well-functioning marriage. If

there is such a thing.’



Successful strategies



Kusmiak outlines what he sees as the keys to PR success in the Czech

Republic: ’You must have good personal relationships with

journalists.



You must also be well connected politically: The law is changing every

six months and you need to be in touch with ministers. It’s important to

be part of an international network. Many clients seek export

opportunities or investment from abroad, so they need to present

products in other countries.’



Czech PR certainly has a strong British influence. The Rowland Company,

Shilland and hi-tech specialist Harvard are all well established, while

Shandwick recently appointed Ewing PR as its new Czech affiliate.



But there are successful indigenous operations. Eklektik was born in

1993 and is one of the largest Czech PR firms. Managing partner Pavel

Kucera says the future is bright, but it’s time to specialise - his

agency having recently formed international partnerships with healthcare

specialists Shire Hall and financial firm Citigate.



Kucera has also experienced the problems of reporters acting as ’ad

salesmen’ but concludes: ’We’re the guardians of our own future. If we

pull together there are some big billings ahead.’



EMERGING MEDIA: THE RACE FOR THE TOP



After the ’velvet revolution’ Czech state TV lost its monopoly but

retained two channels. However commercial TV challenger Nova, launched

in 1994 by Ronald Lauder, proved a massive success with around 70 per

cent audience share. Another commercial station Premiera has a nominal

share.



Radio stations have also mushroomed. Czech state radio has several

stations, while the infamous US propaganda machine Radio Free Europe is

now headquartered in the former Czechoslovak parliament. There are also

dozens of commercial FM channels.



There was an explosion of newspapers after 1989 but competition is so

fierce, and content so similar, that a number of casualties are expected

over the next year. The largest - Mlada Fronta DNES - was the former

Communist Party youth league paper. Now the accent is on the DNES

(Today) with its centre-right outlook and the fairly middle ground

tabloid Blesk (Lightning), although the paper is suffering from falling

circulation. On the centre left is Pravo (Rights), the former communist

party newspaper which now sees itself as the opposition paper. Others

include the Hospodarske Noviny, the economic daily and only real

financial paper, and the more intellectual Lidove Noviny, which has a

small readership.



Michal Kusmiak, managing director of Hill and Knowlton Prague says most

Czech papers are largely tabloid in outlook: ’There is no equivalent of

the Times in terms of serious political comment.’ Vincent Boland,

Financial Times’ central European correspondent adds: ’Gradually

newspapers are getting more focused on readerships rather than on the

news-makers. When news becomes an essential commodity in the running of

the country, their credibility will improve.’



There are also a number of English language weeklies or monthlies. The

Prague Post is the ex-pat community’s social bible along with the more

formal Prague Business Journal. A young entrepreneur has also started up

the Fleet Sheet, a weekly summary of major Czech news in English. At a

regional level the Economist publishes the monthly Business Central

Europe and there is a weekly title called Central European Business.



The domestic news agencies are CTK and CTI. Internationally, Associated

Press, Bloomberg Business News and other national agencies operate in

tandem. Reuters has two services in Prague, one in Czech and one in

English.



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