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The Death Of A PR Firm, Due To Bad PR

Can you imagine being the guy running a public relations agency that “perished in a public relations fiasco”?  That’s the unhappy fate of James Henderson, the former CEO of now-defunct PR and crisis management powerhouse Bell Pottinger. The London-based firm imploded last year after its role in running a “dirty campaign” for South African client Oakbay Capital was exposed, and the sordid story was recapped by The New York Times this week.

How, you might ask, could such a large and influential PR firm fall victim to bad PR? Easy. It was a stew of unscrupulous clients, deceptive tactics, and toxic message communication linked to its campaign. When it was called out for crossing ethical lines by using false propaganda and fake grassroots in 2011, Bell Pottinger blasted critics but apparently never saw fit to police its methods.

Then it made the mistake of taking on a single, enormous client and apparently never pushed back as the work slid from relatively traditional reputation laundering to a racially-charged campaign that embarrassed other clients, employees, and even the embattled South Africa president.

The Bell Pottinger meltdown is a reminder of five principles in our industry.

Transparency is not only good practice, it’s good business

Fake social media accounts, shadowy financing, hidden conflicts of interest — these and other practices aren’t just wrong; they will inevitably come to light and tarnish one’s reputation and business. As founder Tim Bell himself said regarding the racially charged social media campaign that his agency ran for the Guptas, “it was altogether smelly.” But whether because the agency principals were too distracted by infighting, or because the fees were too rich to turn down, no one took steps to protect the firm from the monster client that devoured its reputation.

Choose your clients wisely

The agency was lured by the reported $100,000 monthly fee it was paid by the controversial Gupta brothers, and understandably so. There’s no shame in taking on a lucrative contract, after all. I’d also argue that even clients who have behaved unethically can be represented with integrity. But in this case, the client sought only to distract from negative media coverage with misleading tactics and pernicious messaging. A small irony of the situation is that the racially charged terms like “white monopoly capital” that were used on social media were largely spread by the client, not Bell Pottinger, but both were badly damaged by the association.

Do right by your employees

This is a fine rule for just about any business, but its absence is particularly acute for a services business where the only real product offering is the time and talent of staff. Bell Pottinger’s troubles escalated when a cache of internal documents about the Gupta campaign was leaked to the media, likely by disgruntled ex-staff. The leakers clearly crossed ethical lines themselves, but the agency’s controversial practices may have invited their actions. In any case, it weakened the firm and paved the way for its dissolution when senior officers began jumping ship.

Act quickly to correct mistakes

Years before the Oakbay fiasco Bell Pottinger was caught bragging about black-hat SEO tactics to a group posing as representing Uzbekistan.  In 2016 the United States Department of Defense paid it $540 million to create fake terrorist videos and news items for Arab news outlets, triggering a wave of bad PR. But it seems to have learned little from those errors. When its work for the Guptas became known in 2016, other clients objected, in some cases because their businesses were actually targeted by the Gupta campaign. Instead of severing ties immediately, Bell Pottinger tried to find a middle ground by renegotiating its terms with the Guptas to eliminate “embarrassment” of its other clients. When it finally resigned the Oakbay account in 2017, it was too late to save the agency’s reputation.

Don’t tarnish your profession

Bell Pottinger’s demise was hastened by its censure and expulsion from the UK’s Public Relations and Communications Agency (PRCA) for exploiting “racial divisions on behalf of the Gupta family.” Its actions over the years had also violated an unwritten rule that most PR and reputation agencies preach to their clients who face controversy. We advise client to build advocates and allies in and around its industry. Preferably before they are needed.

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