Con­tro­ver­sial UK firm broke the first rule of PR – don’t be­come the story

Irish Independent - Business Week - - BUSINESSWEEK - Peter Thal Larsen

A PRIME rule of pub­lic re­la­tions is to not be­come the sub­ject of the story. Bell Pot­tinger has bro­ken that maxim in ev­ery way imag­in­able.

The UK cor­po­rate com­mu­ni­ca­tions firm is in melt­down fol­low­ing its work on a highly di­vi­sive cam­paign in South Africa. Though poor man­age­ment is partly to blame, dis­rup­tions prompted by the rise of on­line me­dia also played a role. It’s a red flag for an in­dus­try that has so far avoided the woes of tra­di­tional pub­lish­ers.

Even the most sil­ver-tongued spin doc­tors would strug­gle to de­fend Bell Pot­tinger’s ac­tiv­i­ties in South Africa. Work­ing for a com­pany con­trolled by the pow­er­ful Gupta fam­ily, it de­vised a cam­paign to high­light per­sis­tent eco­nomic di­vi­sions in a way that was likely to in­flame racial ten­sion. The re- sult­ing po­lit­i­cal firestorm cul­mi­nated this week in the res­ig­na­tion of Bell Pot­tinger’s CEO and the firm’s ex­pul­sion from the UK pub­lic re­la­tions trade body.

Clients and staff are de­fect­ing and founder and for­mer chair­man Tim Bell says the firm will “al­most cer­tainly” fail to sur­vive.

The busi­ness has re­port­edly put it­self up for sale.

The saga high­lights broader pres­sures fac­ing the in­dus­try. A busi­ness that ini­tially set out to in­flu­ence me­dia gate­keep­ers at news­pa­pers, mag­a­zines and tele­vi­sion sta­tions has been forced to adapt as new chan­nels of com­mu­ni­ca­tion have opened up.

Some PR firms have di­ver­si­fied by of­fer­ing to han­dle in­vestor re­la­tions for big cor­po­rate clients, ad­vis­ing on big takeover deals, or by ex­pand­ing into po­lit­i­cal lob­by­ing.

Oth­ers have pushed into cam­paign­ing with the help of so­cial me­dia. But this brings risks. Firms that pre­vi­ously acted as be­hind-the-scenes in­ter­me­di­aries for po­ten­tially un­savoury clients are more ac­count­able for the mes­sages they trans­mit or the Wikipedia pages they edit.

The prom­ise of hefty fees, such as the £100,000 a month that Bell Pot­tinger earned for its South African work, has also lured some firms into far-flung mar­kets where they lack lo­cal knowl­edge.

Even as tra­di­tional me­dia strug­gles with frag­ment­ing au­di­ences and de­clin­ing advertising, the PR in­dus­try has con­tin­ued to ex­pand. The sec­tor’s to­tal rev­enue rose 5pc to $14.2bn in 2015, ac­cord­ing to the Holmes Re­port. But this up­ward trend masks tur­bu­lent changes. Bell Pot­tinger’s down­fall is a re­minder of the risks that such shifts pose to the in­dus­try’s own rep­u­ta­tion. (Reuters Break­ing Views)

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