Public Relations Departments and Firms

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Public Relations Departments and Firms

• The PR Role In Organizational Structures

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1889--Westinghouse

• George Westinghouse creates first corporate
  public relations department
• Purpose publicize his pet project--alternating
  current electricity

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Then. . .

• Early public relations
• Publicity
• One-way communication

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Now

• Public Relations today
• Negotiation
• Compromise
• Two-way communication (Feedback)

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PR Managers

• Must be
• Strategic Communication Managers
• Instead of
• Communication Technicians

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IABC Study

• CEOs consider public relations good investment
• Surveyed 200 companies

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Other Studies

• Large firms include public relations in the
  policy-making process

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Other Studies

• Small firms feel less of a need to employ public
  relations

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Whats In A Name?

• Fortune 500 Companies
• Corporate Communications or,
• Communications

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Titles

• Manager
• Director
• Vice President

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PR - Staff Function

• Line Managers have delegation authority,
  establishes goals, hires and fire, and has direct
  influence over workers
• Staff People have little or no direct
  authority--they can only recommend and provide
  comments and advice

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Departments

• Media Relations
• Investor Relations
• Community Relations
• Employee Communications
• Marketing Communications

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Levels of Influence

• Advisory - lowest level
• No obligation for line management to take
  recommendations or ask for them
• Example Exxon Valdez oil spill

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Levels of Influence

• Compulsory-advisory
• Line managers are required to listen to staff
  experts recommendations/advice

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Levels of Influence

• Concurring Authority
• Both or all parties must concur before a project
  is approved

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Cant We All Just Get Along?

• Public Relations
• Legal
• Advertising
• Marketing
• Human Resources

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Public Relations Firms

• Ranges from one person to 2,000 employees in 35
  nations
• 10,000 in United States
• 50 largest account for 2.8 billion in 1999
• Outsourcing growing among major companies

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15 Largest PR Firms

• Burson-Marsteller
• Hill Knowlton
• Shandwick International
• Porteer/Novelli
• Fleishman-Hillard
• Edelman Pr Worldwide
• Ketchum
• BSMG Worldwide

• Ogilvy PR
• GCI/APCO Associates
• Weber Pr Worldwide
• Manning, Selvage Lee
• Brodeur Worldwide
• Golin/Harris Communications
• Ruder Finn

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Firm Structure

• Ketchum Public Relations
• President - New York
• Executive Vice President - San Francisco
• Senior Vice President - Director of Operations
• Vice Presidents - Account Supervisors
• Account Supervisors - Charge of Major Acct.
• Account Executives - Has direct contact with
  client - handles day-to-day activities

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Advantages

• Objectivity
• Variety of skills and expertise
• Extensive resources
• Offices nationwide
• Special problem-solving
• Credibility

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Disadvantages

• Lack of understanding of clients business needs
• No full-time commitment
• Need for prolonged briefing period
• Internal PR staff resentment of outside firm
• Requires strong direction from senior leaders
• Expensive

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Fees

• Basic Hourly Fee
• Most flexible
• Hours tabulated monthly and billed to client
• Out-of-pocket expenses cab fares,, car rentals,
  airline tix, and meals also billed to client
• About 70 percent of campaign budget spent on
  staff salaries

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Fees

• Retainer Fee
• Basic monthly charge billed to client covers
  administrative/overhead expenses for maintaining
  account and being on call
• Requires specific number of hours to be spent on
  the account

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Fees

• Fixed Project Fee
• Least desired plan
• Firm agrees to do a specific project, e.g., a
  monthly newsletter, for a fixed annual price
• Difficult to estimate accurately all work and
  expenses in advance

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Estimates

• Geographical location
• Size, duration
• Number of personnel assigned to project
• Type of client
• Client billed 3x account executives salary
• See page 101 of text for examples of billing