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Richard Edelman (Tim Fraser for The Globe and Mail)
Richard Edelman (Tim Fraser for The Globe and Mail)

Adhocracy

The man at the top of the PR mountain Add to ...

Apologies to Charles Dickens, but it must be said: For those who work in PR, these are the best of times, these are the worst of times.

On the one hand, hardly a week goes by without a public relations belly flop that echoes around the world - be it a tone-deaf tweeted joke about Egypt by the fashion designer Kenneth Cole, or the introduction of a new Starbucks logo that is instantly ridiculed. On the other hand, PR houses are gaining new respect in the marketing world because of their ability to leverage the same technological shift that's propelling those viral failures: the integration of social media into our lives.

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Last month, the industry bible Advertising Age acknowledged the shifting ground when it named Edelman - the largest PR firm on the planet, with an estimated $530-million (U.S.) in revenue last year - one of its Top 10 A-List Agencies. So this week we sat down with the company's chief executive officer, Richard Edelman, during his stop in Toronto as part of a promotional tour for the company's annual Trust Barometer survey of consumer and citizen sentiment.

First up, let's look at some PR failures: Last week, Groupon launched an ad during the Super Bowl that seemed to mock the plight of Tibetans, and then spent five days defending it as an ironic joke before pulling it. But people are complaining about everything, it seems - even a new Gap logo they find underwhelming. Do you have a sense of what's feeding this odd new level of engagement with brands?

I think people have new expectations of brands. I think that they believe somehow that their voice can be heard. So it's in part technological empowerment, but it's also some part a merging of brand and corporate reputation. Maybe they feel they weren't adequately consulted, or that they weren't somehow better informed prior, and they're mad.

Like there should have been a million-person focus group on the new Gap logo?

I don't know. But people wanted in on the do-we-or-don't-we/how-do-we/why-do-we? It sort of goes to the whole idea of how you introduce a new product now. When we were doing the launch of Kinect for Xbox, it was very much about getting sort of young blogger-influencer types to try this thing well in advance - a year before launch. And [Microsoft]improved the product, listening to some of the objections. So they did the intro in a very public fashion a year before. I think that's the sort of 'new normal.'

Speaking of mad - people are in a sour mood, especially in the U.S., as your Trust Barometer outlines. Not nearly so much in Canada.

Canada's a pretty high-trusting country relative to the U.S., relative to the U.K., relative to France and Germany. You guys like the harmonious society and the idea of business and government [intertwined] The Americans don't buy that.

Americans' distrust of all four institutions - government, business, NGOs and media - is higher than a year ago. It's the only country where that's the case.

I think the skepticism - the idea that you have to hear something three to five times before you believe it - in the U.K., it's six to 10 times, and if you come in predisposed one way or the other, you're gonna go with that presumption - I think that's fascinating, and it gives you [an understanding]of why you should behave.

It's why Goldman Sachs put out that report - 69 pages on how they do their trading. I'm convinced that they realize now that they don't have licence to operate without explaining in a very tangible way. It's like having a corporate social responsibility report that says: This is how much packaging we use, this is how much carbon we've used, or whatever. Same idea.

But then Goldman does something like trying to get around trading restrictions through its private sale of Facebook shares, which ends in a major PR face-plant after it's discovered. So one can argue for transparency, but ultimately there are many companies whose interest is apparently not well served by being transparent.

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.

 
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