Close-Up: Is PR a natural fit or sign of adland desperation?

Karmarama and BMB are the latest agencies to offer a PR service - but what exactly are their motives, John Tylee asks.

The most generous interpretation of why agencies such as Karmarama and Beattie McGuinness Bungay are establishing in-house PR operations is that they are reflecting clients' relentless demands for more integrated communication.

The cynical view is that such initiatives are less about advertising and PR being united under a common cause and more about ad agencies desperately seeking extra revenue streams to shore up their bottom lines amid the lingering economic gloom.

It is even being suggested that, rather than embracing each other, adland and the PR industry are in conflict, particularly in the social media space.

"Virtual media is where the next big turf war is taking place," the head of a major PR company declares. "The advertising and the PR industries are fighting each other for control of the territory."

Everybody agrees that the demarcation lines between paid-for and non-paid-for media have become blurred, which is providing rich pickings for PR companies.

"As communication has gone social, so a lot of PR agencies have been going like trains," Ross Cathcart, who heads Ogilvy PR in London, says. "Some are delivering double-digit growth."

The IPA website confirms that the industry is taking note of the way the wind is blowing, with 30 of its 263 member agencies offering a PR service.

Now Karmarama and BMB are about to follow suit.

Karmarama is establishing a joint venture with Chris McCafferty, a director of Shine Communications, that will work with existing agency clients and aid the hunt for new ones.

BMB, meanwhile, is looking to set up an in-house function either by hiring a number of PR specialists, through acquisition or a combination of the two. "We want to do this as quickly as we can, but we want to do it right," Andrew McGuinness, one of the agency's founding partners, says.

Not that agency attempts to jump aboard the PR bandwagon are a new phenomenon. In the late 90s, Saatchi & Saatchi made a concerted effort to draw the discipline into the heart of its activities by attaching PR specialists to selected account groups with a particular need for their skills, such as the one running recruitment for the Army.

"It never really took off," a senior manager who was at the agency during the experiment admits. "At the time, clients didn't believe in one-stop shops, and regarded PR as a separate thing."

Many argue that is still the case and lots of clients are going to need much convincing that a combined advertising and PR offering is credible. One sceptic who can speak from experience is Jon Goldstone, the marketing director of Hovis, whose 2008 ad "go on lad", created by MCBD, owed much of its success to the extensive PR support prior to its launch.

That support was the work of Frank PR, whose activity is estimated to have generated around £2.5 million worth of free publicity even before the ad first aired.

For Goldstone, the campaign's success underlines the need for clients to work with specialists in each discipline.

"MCBD has created fabulous advertising for us, but I wouldn't trust it to do my PR," he says. "It's a question of effectiveness and I don't think a bolt-on PR offering can deliver that."

However, Nick Howarth, the CHI & Partners managing partner, questions whether such scepticism is widespread and points out that his agency prefers to work with a number of PR specialists. "Clients would rather get a dispassionate perspective that doesn't have a channel-specific agenda," he claims.

Karmarama's chairman, Nicola Mendelsohn, agrees that a combined ad and PR proposition won't be every client's cup of tea. But she adds: "If you have a strong relationship with your clients, and you're proving to them that you're being proactive, why wouldn't they want what you're offering?"

The answer, according to one leading PR practitioner, is that most clients can spot agency opportunism when they see it.

"If this is such a good idea for ad agencies, how come they weren't doing this three or four years ago when times were good?" he asks. "To be doing it now, when the market is so difficult, smacks of desperation."

So how big is the threat to stand-alone PR companies from ad agencies encroaching on their territory? James Herring, the managing director of the PR company Taylor Herring, claims he isn't losing sleep at the prospect.

Herring, whose clients include Google, Panasonic and the BBC, and whose company promoted Honda's "live" skydiving commercial, claims that ad agencies moving into PR will have to contend with more than just client scepticism.

"To be successful at PR, agencies will have to hire the best in the business - and the best people haven't only already set up their own operations, but sit at the top table with their clients," he says.

What's more, Herring argues, not many PR people will fancy leaping into the unknown by joining an ad agency given the current state of the market. "Many agencies will ditch their PR offering as the economy recovers," he says. "It's not what they enjoy doing."

Lord Bell, the Chime Communications chairman and the most famous example of adman turned PR practitioner, suggests the predicament is confined to modest-sized agencies capable of pursuing only those pieces of work too small to interest many PR companies.

"Most clients will regard agencies doing PR in the same way they regard Freud Communications' advertising offering," he claims.

Some agencies even admit there will always be times when their in-house experience is no match for an outside PR specialist.

For instance, James Murphy, the Adam & Eve founding partner, says he expects a time will come in the agency's evolution when it will need a PR offering, but he acknowledges that some accounts, particularly those in the fashion arena, will always benefit from outside advice.

"We're interested in ideas that will travel virally and will capture journalists' imagination," he explains. "A PR specialist from the outside will be brutally honest about whether your idea is as good as you think it is. Bring that function in-house and some of that objectivity may be lost."


- M&C Saatchi

Given M&C Saatchi's penchant for publicity, it's no surprise that the group is a relatively old hand at the PR game.

Talk PR, set up in 2001, specialises in fashion and beauty, while M&C Saatchi Sport & Entertainment, launched six years ago, focuses on sport, music and film sponsorship.

M&C Saatchi Sport & Entertainment works with the main agency on its NatWest account, while the recent Network Rail win had much to do with the group's PR capabilities.

"Until the dawning of the digital age, PR was seen as quite separate," Lisa Thomas, the M&C Saatchi Group chief executive, says. "Now its influence is growing. PR is a very natural extension of advertising."

- Ogilvy

The Ogilvy group can fairly claim to have trail-blazed the major networks' move into PR, having opened a London office in 1982.

During its first two decades, the PR role changed little. Not so in the past decade, however, when social media changed everything. "PR is stepping into the breach created by the shaking up of the old world order," Ross Cathcart, who heads Ogilvy PR London, says.

Today, about 25 per cent of Ogilvy PR's UK business is shared with other group companies. "Accounts that are PR-led are still the exception," Cathcart adds. "But that will change."