Edelman Falls Short As PR Industry Leader

It’s always instructive when PR teams entrusted with managing the reputations of major corporations run into reputation problems of their own. But it’s downright disturbing when it happens to one that presumes to lead our industry.

Mega-agency Edelman recently made waves by resigning a lucrative engagement working with for-profit corrections company The GEO Group, a top contractor for ICE. When news of its decision hit, some industry-watchers praised it, in part because it came in response to staff objections.

A Principled Decision…But What Principles?

Had Edelman finally grown into the principles it likes to espouse? After all, this is the agency that pioneered an early form of fake news, punted when competitors took a stand on climate change, and is notorious for pursuing growth at any price. But as the agency that has tried to align its brand with public trust, one hopes it has learned from its mistakes.

On closer examination, the Edelman/GEO Group situation is a great example of what not to do when faced with an ethical quandary. According to news reports, the agency originally pitched The GEO Group in May, and it won the contract last month. Surely it would have foreseen the possibility of staff misgivings and weighed the internal and external ramifications of the decision.

Mismanaged communications = bad PR

A good PR team would have considered the decision in advance, involving key internal stakeholders as appropriate. Once made, it would then communicate the rationale for the engagement and prepare to respond to questions from external audiences like clients and prospects.

But that’s apparently not what they did. It seems Edelman thought they would keep the GEO work under wraps. When staff opposition broke out, it tried to manage it in a series of internal discussions that seemed to backfire badly. Then it made what looks like a panicky decision to resign the client only two weeks into the engagement.

Why? Possibly because trade media coverage of its new assignment involved other agency clients who had publicly cut ties with for-profit ICE contractors. Presumably a corporation like Wells Fargo, which also happens to be struggling with reputation issues, might look askance at a PR agency with principles at cross purposes to its own.

Employee commitment matters

Adweek has receipts. Agency staff shared messages from staff members discussing the situation on the anonymous networking app Fishbowl, and they are damning. It appears that Edelman’s leadership thought they could keep the GEO engagement quiet while managing any internal dissension. That’s so not what happened.

But it gets worse! After the agency announced it had severed the contract, The GEO Group voiced its displeasure in a public statement. “It’s truly disappointing that a renowned public relations firm, which prides itself on helping companies tell their story, would allow the personal political beliefs of some employees to undermine a business contract,” read the statement attributed to Geo Group spokesman Pablo Paez.

It’s understandable that personal beliefs – political or otherwise – might impact a PR firm’s decision on what clients to accept. But it’s far less clear how Edelman thought it could keep the work secret and somehow manage a staff insurrection. Then, to top it off, it backpedals after only two weeks, which would seem to indicate it never really thought the work aligned with its values at all. It was just about the bottom line, for as long as they could get away with it.

It’s hard not to question the judgment of a PR company that so miscalculates the reputation impact of a business decision and mismanages its communication. And it’s doubly frustrating that it supports the stereotype of PR agencies staffed with morally dubious hired guns without principles, ready to take any side for a fatter payday.

Mistakes happen, but this is unworthy of the largest independent PR firm, and unworthy of our profession.

PR, Too, Can Do Well By Doing Good: Edelman’s Climate Decision

The world’s largest PR agency has learned a lesson in the power of public pressure to force corporate policy. After months of waffling on the issue, Edelman yesterday told the Guardian that it would end work for coal producers and groups who deny climate change.

The move is particularly interesting because Edelman holds itself up as a model for the ethical practice of public relations, and it almost certainly toughened its position in response to some pretty negative PR of its own. For over a year, the agency seemed to agonize over how to manage a growing reputation problem related to its handling of fossil-fuel clients and legislative groups who deny climate change or fight regulation of pollutants. It tried to blunt the controversy by parsing the issue in media interviews, then announced it had ended its work for the American Petroleum Institute. But watchdogs pointed out that the resignation was more symbol than sacrifice given that the budget had declined as the price of oil plummeted.

In July, several key executives in Edelman’s corporate responsibility practice departed over its muddled position – an embarrassing development. A climate change group started a petition to force it to resign its fossil-fuel clients. Even worse for an agency gunning to hit the $1 billion threshold, two clients left, and others reportedly expressed concerns.

This isn’t the first time Edelman has been suffered reputation damage. It has the dubious distinction of pioneering digital astroturfing in 2006 with a fake blog called Wal-Marting Across America. The result was a public scandal, but it pushed the agency to raise its game when it came to ethical use of social media and transparency in agency practice.

When it comes to the climate change principle, the process was once again messy. Its management of the issue wasn’t exactly textbook, and its motives probably aren’t pure. But that’s precisely why the move is so significant and maybe even encouraging for our business.

It’s easy to tell clients that they need to do the right thing – that their business practices must be above reproach and their decisions should be principled. It’s easy to give lip service to ethical decison-making and transparency in the practice of communications. But it’s harder to execute against those principles in the real world.

Maybe now Edelman, as the PR industry leader by size of business, can start to lead the industry in other, more important ways. This firsthand reminder of the power of PR and the value of public pressure in making change might be a first step.

Top PR Firms Engage In Their Own Reputation Management

Does PR have a conscience? The news this week that Ketchum has resigned as agency for the Kremlin raises the question of whether large PR firms are engaging in some reputation management of their own. Ketchum’s work for Putin’s Russia had attracted negative coverage even before the latest Ukraine crisis and the recent murder of opposition politician Boris Nemtsov.

Earlier this year, Edelman, the top independent PR firm, announced it would no longer work for the American Petroleum Institute. The move came after the agency struggled to deflect public pressure for mega-firms to cut ties with clients who deny climate science. Edelman’s decision to spin off the ad unit that handles API work was seen as progress by some environmental groups and hailed as a “gutsy business move” by one blogger, who – in a stunning display of hyperbole – compared it to CVS’s decision to discontinue sales of cigarettes.

The response in each case may amount to an effort to protect the reputations of those involved. It’s PR for PR, so to speak. But, make no mistake, the agencies are also protecting the bottom line. If you look closely at each decision, the motives seem more practical than altruistic.

Edelman’s move, for example, simply divests the ad unit handling work for the API. And although API billings had been reported at over $300 million between 2008 and 2012, most of that was for paid media, meaning the value to the agency was probably far less. The Holmes Report notes that the client-agency relationship had “scaled back” over the past year. Edelman is surely aware that major companies like Walmart vet prospective agency partners not only for their hiring practices and other criteria, but to ensure compliance with their strict sustainability policies, so the decision may actually be a shrewd play to attract bigger fish.

Scratch the surface of Ketchum’s decision and you’ll uncover similar motives. Public documents indicate that the agency’s work for the Russian Federation had declined at the end of last year. With its economy teetering and Putin’s very regime threatened by political and fiscal pressure, Russia may be a bad risk in more ways than one. So, the time is right for a principled decision.

Public relations agencies have to stay profitable and grow just like any other business. It’s easy to be cynical about the timing here, and to criticize from a distance. Enlightened self-interest is not a crime. But, as we often counsel our clients, sometimes the right thing to do is also good for business, and not only when it’s convenient. I hope that next time I read about a top PR firm parting company with a client whose ethics or practices run counter to the public interest, it will be more about the enlightened bit and less about the agency’s own reputation.