Close-Up: Live Issue - Should adland and PR work together?

The PR shop Freud has bought out DFGW, as integration continues apace.

Last week, Freud Communications completed its buyout of DFGW. The deal saw the 12-strong ad agency absorbed into Freud's London headquarters, with the name DFGW dropped.

The exact mechanics are still being thrashed out. For the moment, DFGW will sit within Freud as an advertising department. It will continue to serve its existing clients - Expedia, Nuffield Hospitals and COI - as per its original contracts. Over time, the agency will look at where ads and corporate communications cross, particularly in the drive for new business.

As well as offering corporate branding, strategy, crisis management and PR, the deal means Freud will also widen its remit to include advertising, branded content and film. "More clients are outlining their business issue, rather than specific advertising or PR requirements," Tom Vick, the former joint managing director of DFGW, says. "Having corporate communication and advertising services as part of the same agency leaves us best equipped to address that."

But as the ink dries on the contract, Freud's motivations are curious. Was this opportunism, with Freud seeing the potential of a cheap, but decent ad agency open to talks? Or is it part of a move towards integrated communications?

Traditionally, PR has been seen within advertising circles as a poorer cousin, commanding smaller budgets. It's viewed as ideas-driven rather than strategic, with a looser control on output. Yet an increasing number of agencies are putting these prejudices aside to work with PR shops on joint projects. Earlier this year, COI's Learning & Skills Council selected its ad agency by teaming it with a PR company, subsequently appointing Leo Burnett and Hill & Knowlton to work on the account.

In a digital world, where brands can be taken to task almost instantaneously, PR is enjoying a new respect at the highest levels of business, according to the chief of one global PR group.

"Ten years ago, it was ad agencies that had relationships with chief executives," he says. "Those relationships have eroded into marketing departments, and PR people have become strategic advisors. They are the ones with instant access to the board, and have to be more reactive to change." Hugh Cameron, the joint managing director of DFGW, says that the fortune of companies extends beyond the image presented through their advertising. "The demarcation lines of paid-for advertising are disappearing. Brand owners are finding they have to relinquish control," he explains.

More and more, global advertising networks with PR capabilities are aligning the two disciplines. Cilla Snowball, the chairman and chief executive of AMV Group, says: "We have a separate PR agency in Fishburn Hedges, but share an increasing range of clients, from TV Licensing to BT."

Similarly, Ogilvy Group shares responsibilities across accounts. It is interesting to note that arguably its greatest joint advertising and PR venture, Dove's "real beauty" campaign, is handled by Lexis PR, and is still generating headlines more than three years after launch.

But Marc Sands, the marketing director at The Guardian, says advertising and PR are very different practices: "PR feels like the last in a long chain of functions. There are many more pressing issues that require integration."

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THE CLIENT - Marc Sands, marketing director, The Guardian

"PR and advertising are essentially about the same thing: the placement of a message. One pays for it, the other uses 'influence and contacts' to ensure the message appears, or, often, that it doesn't. This doesn't mean a client would be best served by having the two functions in the same agency.

"The objective of both disciplines may be the same, but its realisation through PR and advertising differs greatly. Apart from the upside of everyone 'singing from the same hymn sheet' (which can be achieved through other methods), and lower fees, it is hard to see exactly what the benefits are likely to be by having your advertising and PR handled by the same company."

THE GROUP CHIEF - Gary Leih, chairman and chief executive, Ogilvy Group UK

"PR isn't just about corporate affairs or crisis management or media coverage: it's a way for brands to interact with their consumers and the wider world. For example, experiential marketing plays an increasingly important role, especially for brands in highly legislated or controlled sectors such as alcohol and fast food.

"We've had a number of successful brand pitches lately, in fact, 11 in a row, in which PR has played an important part.

"Many of our clients now come to us looking for a solution to a communication problem; they're not necessarily concerned how the problem is solved, just that it is."

THE GROUP CHIEF - Cilla Snowball, chairman and chief executive, AMV Group

"The advertising and PR disciplines are definitely working more closely together, and it's a move we actively encourage in our group. It's all part of good campaign integration.

"Three factors are driving the change: consumers are demanding brand and corporate transparency; client PR and public affairs departments are moving ever closer to marketing departments, especially in the food and drink business; and the digital explosion, which is accelerating the importance of word of mouth in communicating ideas."

THE PR GURU - Lord Bell, chairman, Chime Communications

"Traditionally, advertising commanded larger budgets than PR, but that is now changing. Both PR and advertising agencies work to the same communications brief, it's just the distribution channel that is different.

"That said, advertising and PR require different skill sets. The greatest difficulty of integrating both practices is getting people with these two different skills, and attitudes, to work together. Plus, many clients like to have a number of suppliers and to manage the integration process themselves.

"Also, in most cases, PR comes from a company's corporate budget rather than marketing, so there's no pressing financial need to use a single agency."