After World War II, a spurt in the growth of multinational companies and worldwide trade led to the concomitant growth of global advertising and marketing agencies and networks around the world. Such growth was the inevitable outcome of the need to coordinate the advertising and marketing of goods and services in the various markets that were joining the global trade flow and becoming part of the multinational market domain. In the marketing mix, the global expansion of public relations firms got a late start. However, in the 1950s, the growing realization of the cost-effectiveness of public relations in relation to advertising and marketing, along with an increased understanding that public relations can effectively support advertising and marketing efforts through reputation management, media relations, and relationship building with diverse publics around the world led to the start of the expansion of international/global public relations firms and activities.
The rate of expansion increased especially from the late 1980s onwards with the demise of the former Soviet Union, the spread of market globalization in more countries, the spatial compression enabled by communication technologies and travel, increasing global competition, and financial deregulations worldwide. The demand for global public relations services were coming from a growing number of companies doing more business in unfamiliar markets, companies that were faced with the need to culturally understand and build mutually beneficial relations with a complex array of publics, government, and the media of various countries, a service that is beyond the scope of just advertising and marketing. Global public relations firms and networks have positioned themselves as entities that possess the knowledge, expertise, and resources to provide these services in an increasingly interconnected world with complex business communication needs.
As a communications profession, public relations, as it is understood today, was born in the United States and also had an early start in Britain. Two US firms with early international vision and aspirations were Hill and Knowlton and Burson-Marsteller. Lured by the business potential of the formation of the European Economic Community, the former entered Europe in the 1960s and soon after the Asia Pacific region. Burson-Marsteller, Hill and Knowlton’s main international competitor, closely followed suit. Edelman PR (the only independently owned global public relations firm today) was also an early player in joining the expansion of global firms (Morley 1998). In Britain, in the 1980s, Shandwick (now Weber-Shandwick) provided major competition to the US-based firms as it entered the race to provide global public relations services to multinational clients. It established a strong presence in the Asia Pacific region in addition to Europe, after acquiring International Public Relations Group (IPRG), a strong network of public relations firms spanning Japan to Australia, brought together by the enterprising Taiji Kohara of Japan who entered the public relations business in the 1960s (Morley 1998).
The reach of public relations firms today is indeed global. Most of the global firms have a presence in the major metropolitan cities of the world. They provide a full range of public relations services such as strategy and program development, creativity, tools and materials development, implementation, and evaluation and measurement (Rudgard 2003). Some of the global firms (and now networks) have built a reputation for being specialists at providing certain types of public relations services, such as public affairs, financial affairs, travel, health-care, technology, or sports marketing. Today, there are close to two dozen global public relations firms that provide worldwide services, mainly based in the US or in Europe. While they also provide services to domestic clients, their international accounts generate between 40 and 70 percent of their revenues (Wilcox & Cameron 2006).
The Need For Pr Firms In Today’s Global Marketplace
According to Amy Rudgard (2003), head of public relations for Lego in Europe, clients hire global firms or networks for a number of reasons, among them control and consistency over global campaigns, lack of in-house resources, personnel, and expertise, lack of the international experience or resources at the current client, rapid business growth, and entry into new and unfamiliar markets, or the sudden occurrence of a crisis with international repercussions that demands quick action. Further reasons are that the management of some clients with global needs does not perceive the financial value of maintaining a full-fledged in-house international PR team at all times, or that global firms with local affiliates are better rooted in the local culture of various markets.
All of these reasons suggest that an increasing number of businesses, in addition to multinational companies, are in need of coordinated public relations services that transcend national cultures and customs. Along with business, several organizations that span national borders, such as nongovernmental agencies and international agencies, also utilize the services of global public relations firms.
Ownership Patterns And Trends
Until the 1970s, most public relations firms were independently held or publicly owned. However, they were gradually bought over by large advertising firms as they were turning out to be lucrative investments. Another advantage for the advertising firms was that they could provide seamless services to clients with international advertising as well as public relations needs. That trend further shifted as global media and communication operations began to converge rapidly after the late 1980s, leading to the growth of large media conglomerates with diversified holdings. While they maintain their names, most global advertising and public relations firms today are owned by such large conglomerates. For example, the Interpublic Group owns Foote, Cone and Belding along with other advertising agencies and some of the largest global public relations firms such as Weber-Shandwick and Golin/Harris International. The largest conglomerate, however, is Omnicom (roughly US$8.6 billion in revenues), which owns global public relations firms such as Fleishman-Hillard, Porter Novelli, and Ketchum (Wilcox & Cameron 2006).
There are two main reasons for this ownership trend. The first is that large multinational companies with communication needs in various markets of the world can shop under one roof and expect seamless integrated marketing communication services, i.e., the melding of public relations, advertising, and marketing, in the various countries in which they do business. The other reason is purely financial. Global public relations firms are increasingly proving to be worthwhile investments for large media conglomerates (Wilcox & Cameron 2006).
It needs to be pointed out, however, that not all clients with international public relations needs may desire the one-size-fits-all approach, especially if they feel the need to conduct more locally tailored public relations programs in disparate market cultures. These clients feel the need for less standardized and more personal and culturally focused services. Having to hire one global firm with international offices is not the only option. Such clients can pick and choose from other available options when constructing their global public relations account.
Options Available To Clients For Structuring Global Pr Accounts
The trend of building networks (e.g., WorldCom, IPREX, Pinnacle), whether comprised of partially owned affiliates or independently owned smaller firms worldwide, is on the rise in global public relations. As a result, clients with global public relations needs have at least four main options available to them for structuring their global accounts. First, as mentioned already, there is the option of going with a wholly owned firm that has its own offices in different cities created by the parent firm and bearing the same name. Second, a client can go with the wholly owned network approach. Such a network is composed of local firms that have been acquired by the lead firm, but the local firms retain their local staff, management, and identities. A third option is to go with a main firm that is also part of a network because of equity participation with firms in other countries. The fourth option is to go with a looser (in terms of ownership) network that is a consortium of independently owned firms located in different countries that work together to support the needs of each other’s international clients (Heylin et al. 1991).
Each arrangement has its strengths and weaknesses. Wholly owned firms with their own offices may have some offices that are weaker than others. In this case, the quality of service would not be uniform in all markets, but central coordination would be a plus. The second option has the advantage of offering services that are rooted in the local culture and knowledge of public relations of the various markets where the affiliates exist (Heylin et al. 1991). A disadvantage for clients with global priorities could be lack of coordination between various markets. However, such an option would be ideal for a client that prioritizes the local over global centralization. The same advantages and disadvantages would apply to the third and fourth options, except that a further disadvantage in the case of the fourth option would be a lack of leadership and centralization in a network of independently owned firms with their own cultures, loyalties, and client priorities.
The choice comes down to the client’s needs. A multinational client shopping for international public relations services would have to consider whether its needs are more global, local, or glocal; the infrastructure of its multinational operations; and whether there is greater need for centralization or for decentralization in the management of the account (Rudgard 2003).
The landscape of world business has changed dramatically in the last couple of decades. Business activities and communication are crisscrossing national and cultural borders at a rate not known before. However, greater fluidity also means greater intercultural contact, and this reality carries with it the high potential of intercultural communication conflict between clients and the publics in new contact zones. As global public relations firms and networks work to connect disparate market cultures, and establish a presence in recently marketized cultures (parts of South America, Africa, and Asia; eastern Europe; and Russia) where market-capitalist PR is a new concept, their primary challenges become obvious.
In addition to providing the more standard services that these firms and networks provide to their clients, they also have to effectively play the role of intercultural boundary spanners at various levels in the global business communication matrix. They also have to effectively address the challenge of antiglobalization sentiments, especially those directed against their multinational clients, and counsel their clients to be far-sighted and socially responsible members of the globalization process (Vogl 2001; Corporate Social Responsibility).
- Capozzi, L. (2001). Parlez-vous relations publiques? The human resources challenges of international public relations. Strategist, 7, 16–18.
- Edson, A. (1997). Taking your place on the global stage. Strategist, 3, 31–33.
- Heylin, A., Haywood, R., & Trevitt, G. (1991). Organizing the international operation. In M. Nally (ed.), International public relations in practice. London: Kogan Page, pp. 15–27.
- Morley, M. (1998). How to manage your global reputation. New York: New York University Press.
- Rudgard, A. (2003). Serving public relations globally: The agency perspective. In K. Sriramesh & D. Vercic (eds.), The global public relations handbook. Mahwah, NJ: Lawrence Erlbaum, pp. 459–477.
- Taaffe, P. (2004). The future of global public relations: An agency perspective. Strategist, 10, 22–23.
- Vogl, F. (2001). International corporate ethics and the challenges to public relations. Strategist, 7, 19–22.
- Wilcox, D., & Cameron, G. (2006). Public relations strategies and tactics, 8th edn. Boston: Pearson Education.