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The New York Times Feb. 13 did a mega-feature about
PR but couldn't reach Ketchum CEO Ray Kotcher, D.C. head Lorraine
Thelian, Omnicom CEO John Wren or OMC CFO Randy Weisenberger
despite "repeated requests."
That is the main failing of PR that was uncovered in the
feature headlined "PR's Bad Press."
NYT investigative reporter Timothy O'Brien, admitting he
had no background in covering the PR industry to those he
interviewed, used the Ketchum/Williams scandal as his starting
point.
We applaud the NYT for putting an excellent reporter on the
story who had no previous prejudices and who wanted to give
the field a fresh look.
O'Brien even covered the history of PR dating back to the
days of Ivy Lee at the turn of the last century.
Feb. 13 New York Times
story on PR's problems was the lead story in the paper's
business section. Click
for link |
The Achilles' heel of the PR industry was quickly encountered
by O'Brien when he found that the leading players refused
to be interviewed.
Omnicom and Ketchum, he said early in the story, "did
not respond to repeated requests for interviews." He
does not mention by name either Kotcher, Wren or Weisenberger.
Kotcher has yet to be seen in public about this episode and
D.C. head Lorrain Thelian has decided only to speak mostly
to PR Week.
O'Brien was thus reduced to quoting what Thelian told PRW
several weeks ago: "It's not like we were pitching him
(Williams) to other media as a spokesperson.
Whatever he did once that contract was put together, he did
on his own."
That happens to be false since the contract with Ketchum
says he was to "utilize his long term relationship with
America's Black Forum, where he is a guest commentator, to
encourage the producers to address the No Child Left Behind
Act..."
The Black Forum banned Williams from any future shows once
it learned of this.
Kotcher and OMC's spokesperson, Patricia Sloan,
have not returned phone calls from this website on the K/W
matter and evidence is that, with the exception of PRW, other
media are getting the same treatment.
Debt
of Conglomerates Mentioned
O'Brien mentioned the "billions of dollars in debt the
conglomerates have incurred during their acquisition spree"
but does not give the amount.
According to easily available stats on Finance Yahoo this
is more than $13 billion.
He says critics wonder if this debt has made their more than
50 PR units "pursue fees more aggressively" and
possibly "lead them to cross ethical boundaries.
Temptations to push the "ethical envelope abound,"
says the article, quoting Richard Edelman, president of Edelman
PR Worldwide, as saying: "We're going through a period
of a huge jolt, and now, more than ever we have to give our
account people a moral compass."
Edelman, in his web blog, today called for a new code of
conduct for the industry supported by the Council of PR Firms,
Arthur Page Society, International PR Assn. and PR Society
of America.
"Wrongdoing should be exposed and there should be a
forum for adjudication," he writes. "If ethical
violations are confirmed, then there must be consequences,"
he adds.
Council
of PR Firms Mentioned
O'Brien tried to give some idea of the growth of the PR counseling
industry but he was frustrated by the fact that the more than
50 PR firms owned by the ad/PR groups, including almost all
of the top 25, no longer are allowed to report their fees
and employment totals.
The ad groups (OMC, WPP, Interpublic, Publicis and Havas)
claim that accounting rules differ from country to country
and they could run afoul of the Sarbanes-Oxley Act which provides
fines and jail sentences for public companies that report
false or misleading statistics.
Accountants, including Douglas Carmichael, formerly of Baruch
College and now head of the Public Company Accounting Board,
have told us that employment figures and payroll totals are
mere "compilations" and the ways of measuring them
do not differ from country to country.
A widely held opinion in the counseling industry is that
the fee income and employment figures of the PR firms owned
by the groups are so much lower than they were once claimed
to be that the ad agency owners won't let them be revealed.
They just can't stomach this much negative material. It's
another form of ducking and running that is like the avoidance
of the press being practiced by Wren, Weisenberger and Kotcher.
Since there is so much emphasis on the need for ethical behavior
in the PR field these days, we ask what was ethical about
the Council of PR Firms deciding five years ago that it would
replace the PR trade press as the gatherer of billings and
other statistics of the counseling industry?
The more than 100 members of the Council refused to give
their numbers to us or other PR publications after we had
been collecting them for about 30
years.
We were told to get the figures from the Council which had
relieved the firms of providing any proofs of their figures
such as income tax returns and W-3 forms. Not even account
lists were required. Almost any activity including paid advertising
could also be counted.
Signatures from the agency president or CFO were all that
were required. A small percentages of the firms were supposed
to be "audited" as a check.
This was a very poor way to collect such statistics.
Suddenly, when SOX provided jail terms and fines for any
public company giving out misleading or false information,
the Council ended its collection of statistics and the ad
agency-owned firms refused to give them to anyone else.
The ten biggest PR firms, including Ketchum, each pays $50,000
yearly to the Council. Ketchum, PRSA's most honored agency
with 89 Silver Anvils, paid PRSA about $5,000 in dues in 2004
for 22 members, having slashed membership from 82 in 2001.
Inability of the ad agency-owned PR firms to report their
figures has been very hurtful to them. An honest industry
should be able to give an honest count of who is working in
it.
We'd like some panel to explore the ethics of this situation.
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