Then that’s a business model that, over time, is going to be hard to sustain.
Speaking of business models, on Saturday night you tweeted that you’d seen the drama about corporate downsizing The Company Men, and you’re thrilled that you’re not the CEO of a public company chasing the stock price. How long do you think you’ll be privately held?
Forever. Everybody else – Fleishman-Hillard, Hill & Knowlton, Burson-Marsteller – they all sold. They thought that was a business gold mine for them, because they would get combined with J. Walter Thompson or whomever [in a pitch]. That hasn’t happened. Very little of their business comes from ad agencies. Second point is: It delimits how they do PR. So that which is digital for Edelman is much broader than for the others because they all have sister shops – RGA or Digitas – who do that. The third thing is, when the recession happened – and this is the most profound thing – in ’08 or ’09, we didn’t fire people. We just said: ‘Okay, we’re gonna suck it up, we’re gonna have margins of 5 per cent this year. That’s okay.’ We only fired in offices where we were hemorrhaging money and we got to break even. We didn’t go to the point of what WPP has to do, which is to make 15 per cent.
Still, not everyone is enamoured of the industry. Last November, the former health insurance PR executive Wendell Potter published Deadly Spin, which argued that corporate PR almost killed health care reform in the U.S., and certainly corrupts the dialogue. You wrote a sharp retort to it.
That which I found very objectionable was his then blanket characterization of PR as somehow morally bankrupt – inherently evil, actually. I just thought he completely ignored … for example, in the pharma companies, those who can’t afford to pay, there are many programs for access. Concessionary pricing. He ignored work that [PR] people have done with Wal-Mart over the last five years on changing environmental practice and whatnot. And, by the way, improving worker benefits and health benefits and all that sort of thing. He overlooks completely the constructive role of PR.
Then why didn’t more people or PR firms stand up for the industry?
I chalk it up to some part of being owned by ad agencies that basically ask them not to get to be too controversial.
You recently opened an integrated marketing unit called Ruth. Edelman Creative is another group that does work that looks like advertising. Is this a stealth campaign? Are we going to wake up 10 years from now and find that Edelman has become a full-service agency?
Last year, in our June meeting I said to our people: Great, we’re approaching the sort of top of the mountain for PR. Here’s the bigger opportunity: That which is advertising, that which is digital, that which is PR is all converging. And so the next mountain is to try to persuade clients who are spending the vast bulk of their money on advertising, to shift their money. The insight that I have on this is, the digital people come at a marketing problem with tools, and they’re very elegant and beautiful … . The ad guys come at it with a big idea. The PR guys come at it with conversation.
My view? The world’s moving social – that which is Twitter, Facebook, etc. – so it’s ‘expressions, not impressions,’ to quote someone who I saw in Davos. That helps us, because we’re good at conversation, we’re good at 24/7-on, we’re good at not just pretty and celebrity, we’re good at real people talking about brands and experiences they had on BlackBerry. [Research In Motion is a client.] So, yeah, I hope 10 years from now we’re having a conversation about the communications business, not just the PR business.
This interview has been edited and condensed.
