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6 A.M.

The PR Industry at the Crossroads

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It should be boom times for the PR industry. We have a new U.S. administration that is provoking massive concern in the corporate sector on issues ranging from trade to health care to immigration. Money is flowing out of traditional advertising into experiential, social and sports. There are hundreds of challenger brands sprouting up in food, beverage, financial services and technology, seeking to supplant long-standing titans. Employees are speaking up, forcing CEOs to take public stands in order to keep the best and brightest.

And yet in the past few weeks, there have been surprising pronouncements from holding companies that indicate a lack of confidence in the PR business. The business models going forward do not envision PR as a stand-alone, but rather as part of the supporting cast attempting to make the most of the star performer: advertising-led creative.

The Omnicom announcement that it would be combining all of its PR operations in Continental Europe under the Omnicom PR umbrella to achieve better scale and specialization for clients is a recognition that its three famous global brands no longer have enough local or network business to achieve desired quality or financial performance. The unique aspects of the Porter Novelli, FleishmanHillard and Ketchum cultures will eventually be lost as teams are used interchangeably.

The Ogilvy decision to bring together all of its operating units, from advertising to PR, digital and branding under the single umbrella of Ogilvy is a return to the “whole egg” theory pioneered by Young & Rubicam in the early ‘90s. The geographic units are subordinated to a “client-centric model” known as “Groups,” to include Digital and Innovation, Enterprise Branding and Customer Engagement along with six others. One of the nine leadership roles within those groups goes to a PR person. “The collapsing of brands is part of a new naming architecture,” said John Seifert, Worldwide Chairman and CEO of Ogilvy & Mather. “The predominant organizing principle will be clients and markets rather than vertical global businesses.”

Publicis Communications, born out of the 2015 Publicis reorganization, combines its creative agencies along with MSLGroup under the largest shop in its biggest markets as part of an effort to tie together its non-digital service offer. Should the Leo Burnett office in Brazil be larger than Saatchi or Publicis or MSLGroup, then all of those would report into the CEO of Burnett Brazil. As MSLGroup is smaller in every case, then its offices effectively no longer report to the center.

If you assume PR is not a growth business and is only a support element for advertising, then this approach is wise and farsighted. But there is another view held by Edelman and a few others. We believe in a best-in-class vertical strategy, with PR at the center as its operating ethos of earned at the core, social by design. We aim to be the primary creative partner, digital channel implementer and relationship builder with influencers. We work as peers with ad agencies, digital firms and media buyers, with CCOs and CMOs. Ultimately the best programs will fit under the rubric of communications marketing, with an inextricable link between corporate reputation and brand marketing.

With the advent of cord-cutting, ad blocking, click fraud and a fundamental loss of trust in bought messages, we are the future. It is time to stand up and be counted.

Richard Edelman is president and CEO.

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