Wednesday, March 7, 2007

Independent PR Growing Nationally

Many independents are growing at a 20 percent and 30 percent clip by offering a variety of marketing and PR services...silence at PRSA, nationally and locally, is enforced by an elaborate system of carrots and sticks.

Wed., March 7


by Jack O'Dwyer

The 2006 ranking of independent PR firms published on this website shows the continued growth of the independent PR counseling business.

We talked to owners, executives and staffers at dozens of these firms in the past few weeks and we’re impressed not only with the growth of their businesses but with their good spirits.

They’re happy and expressive, just like PR people are supposed to be.

Their growth rate surpasses that of the conglomerate-owned PR firms. The growth rate of WPP’s PR firms is six percent and for PR firms owned by Omnicom, somewhat under 10 percent.

WPP reports that PR income grew an additional six percent because of acquisitions. OMC, which spends heavily on acquisitions, does not say how much of the 10 percent is from that. Interpublic, No. 3, does not break out PR and neither do Publicis and Havas.

Many of the holding company PR firms now won’t release account lists nor make announcements of new accounts or new executives.

This blanket of silence is harmful not only to them but to the PR counseling industry. We don’t see it changing any time soon. Ad industry culture is not to lift a finger without the permission of the client. PR culture is to see PR as a bridge between client and public, with duties towards both.

Some academics seem puzzled by the silence of PRSA national board members, chapter presidents, district leaders, ethics board members at the national and chapter levels, section leaders, etc., despite criticism of PRSA’s financial reporting by three accounting professors; lack of democracy (only APRs can run for national office); refusal of leaders to supply transcripts of Assemblies; lack of a staff CPA; failure to report nearly $2 million on staff time on the annual conference; refusal to defer dues income; removal of $2.5M in administrative costs from 13 categories of spending; refusal of new COO Bill Murray to disclose his salary; the collapse of the APR program (PRSA added 123 APRs in 2006 after adding 116 in 2005), and the cancellation of the printed members’ directory without the knowledge or permission of the members.

The answer is that anyone in “leadership” is co-opted by an elaborate system of favors and punishments that PRSA national has at its command. Veteran members know this system well.

“Carrots” include new business and job tips that pour into h.q. and that are not posted on the PRSA website where they belong. “Favorites” get them. The way to get off this “favored” list is to oppose national in any way or help the press about PRSA.

Counselors as well as corporate members and PR professors want these tips.

Also desired by chapter and district leaders are the scores of resume-enhancing national committee chair appointments that are given out each year; national conference speaking assignments, of which there are more than 100 (with publicity and reduced fees for the speakers); appointment to key committees such as Silver Anvil judging; appointment as speakers at the more than 100 on-site seminars and teleseminars that PRSA stages throughout the year, some carrying hefty fees (James Lukaszewski made $60,000 in one year by conducting such sessions), and approval of travel, meal and hotel budgets by national staff and leadership. Ex-presidents, who get free conference passes for life ($1,000 yearly) and free national membership for life, don’t complain.

Any employee of a PR firm who challenges national risks exclusion of the firm and its principals from the PRSA “goody bag.” Any chapter member who does this risks ostracism by chapter officers and members. Presidents-elect of the 110 chapters take $500 each year in “walking around money” from national for use at the annual (since 1999) “Leadership Rally” on a weekend in June in New York. Total budget for the weekend is $100,000.

The system of rewards/punishments extends to the PR media. Media that carry PRSA editorials word-for-word are rewarded with exclusives, invites to speak at PRSA events, and ads. PRSA, like Omnicom, is a subject that is off-limits to the New York Times ad column. Leaders of the PR Student Society of America are barred from speaking to the PR trade press. Students know this would about kill any chances of PRSA hooking them up with jobs. The students abjectly accept PRSA dominance of their website, learning only too early how to sacrifice principle for $$.

The result of this system is that chapter and district leaders are hog-tied and tongue-tied when it comes to national. The Ethics Board headed by Linda Cohen has said that under no circumstances will it criticize the national board. Only silence comes from the 110 chapters, all of which have ethics boards. Members of the current national PRSA board have promised never to speak in public or to the press about PRSA matters. This no doubt was a key condition for their nominations.

PRSA is thoroughly corrupt, led for too many years by solo practitioners or those who worked at one-person corporate PR offices. The last head of a major PR firm to lead PRSA was John Beardsley of Padilla Speer Beardsley in 1995. Members have been robbed of their printed directory, a caper condemned by nine of ten rank-and-file members that we talk to. This was the biggest heist in the history of PRSA and some members have vowed to overturn it. A close second is the robbery of New Yorkers of the use of h.q. by the move downtown. PRSA turned its back on its richest source of new members, cutting off its nose to spite its face.

The impact of this corruption on the PR industry is that PRSA is not available to provide an example of how good PR can be when blasts in the media take place such as an article in the NYT or ridicule from the Dilbert comic strip. It would be nice to point to PRSA as a model of good press relations; as a provider of timely and accurate financial reports; as a group that treats all members as equals; that has an active ethics process that condemns PR abuses, and has a president (or chair) who holds press conferences and answers all questions. Instead, PRSA is the embodiment of many of the evils that the press complains about.

Jack O'Dwyer is the publisher of O'Dwyer Publications, New York. It is the number one ranked by Google for original "public relations news."

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