How PR firms can win friends (well maybe) and influence people, Stateside
This month there has been a deal that piqued my interest - the acquisition by London’s Next 15 Communications of US-based public affairs specialist Connections Media.
Washington, D.C.: A "hot house" for public affairs
In the UK, public affairs often sit as secondary offer to the”‘main” PR agency, operating in a very un-public way; but in the US, public affairs (what some might call “lobbying”) is a very big (many billions of dollars) and very public business sector.
Broadly, public affairs is a term used to describe an organisation’s relationship with stakeholders – or to put it another way, anyone with an interest in the organisation's affairs: MPs, civil servants, shareholders, customers, clients, trade associations, think tanks, business groups, unions and the media. All big companies and organisations (particularly those in controversial fields) will spend millions every year on public affairs.
Public affairs practitioners, whether they’re in-house or employees of a retained agency, seek to explain the organisation's policies, or to provide statistical and factual information and to lobby on issues, which could impact upon the organisation's ability to operate successfully. Their work combines government relations, media communications, issue management, corporate and social responsibility information dissemination and strategic communications advice. They aim to influence public policy, build and maintain a strong reputation and find a common ground with these stakeholders.
The bit that some in the UK seem uncomfortable with is the idea of interested parties (be they lobby groups or large companies) trying to influence politicians or civil servants, although of course we ought to be more used to public affairs than we are – isn’t the kind of financial PR used every time Tesco, M&S or WPP have some results to announce a form of public affairs?
But the biggest reason why public affairs seems to be a much bigger deal in the US has nothing to do with cultural differences or squeamishness – it’s to do with structure. In America, politics are massively concentrated in Washington, DC; and so is the public affairs industry. Washington’s unique “hot house” atmosphere – in US terms at least, DC is a small town – allows a big lobbying sector to thrive. It’s said that on any given night, every restaurant in town will be full of public affairs and lobbyists, schmoozing senators and journalists. Here in the UK, we talk about “the Westminster village” but it’s nothing compared to the superheated, fervid atmosphere of America’s capital.
But let’s look at the Connections deal a bit more closely. Next Fifteen Communications Group plc (“Next 15”) is an interesting firm – it’s a holding company for a group of worldwide PR consultancies. A kind of mini-WPP that specialises in PR, if you like.
It has five independent (and well-known) PR brands: Text 100, Bite, The OutCast Agency, Lexis and M Booth. These all operate as autonomous businesses, which allows Next 15 to service competing clients without conflict issues. Next 15 also owns a global marketing services agency (Bite), research business (Redshift Research), a policy communications business (463 Communications), a strategic investor relations consultancy (Blueshirt Group) and a digital agency (Beyond).
It’s bigger than you might think, too: it has 48 offices in 19 countries, with a client list that includes many of the highest-profile international brands, employing around 900 people.
Next 15’s roots go back to 1982, when specialist PR agency Text 100 was set up: one of its very first clients was an obscure software company called Microsoft. Since then it has grown steadily to become a leader in digital and social communications.
Cannily, and perhaps as a consequence of its tech roots, Next 15 has long specialised in digital communications – which is of course where PR, like so much else in marcomms, is going. The focus on digital obviously comes naturally, given that the majority of the group’s clients are in the technology industry – IBM, Google, Microsoft, Facebook and Cisco and so forth. Over the last few years, the group’s strategy has broadened to include: non-technology clients – especially when Lexis Public Relations and M Booth & Associates were added in 2005 and 2009 respectively; Next 15 now works with brands such as American Express, Coca-Cola, Unilever and the Barclays Premier League.
And what of the acquired business? Connections Media was established in 2004 by one Jonah Seiger, apparently a bit of a legend in US digital PR. The Washington DC-based firm provides complete digital campaign services including: strategy, design, advertising, social media, and customized technology services to select political, advocacy and corporate public affairs clients.
It’s quite small in terms of bodies – about 15 people, but as I’ve remarked already, DC is a small town so you don’t need to be big, just well-connected. Connections Media has developed digital media programs for some of America’s most influential associations, issue groups, Fortune 500 companies and candidates for local, state and federal office.
Seiger, along with CTO Phil Lepanto, lead creative Andy Weishaar and the firm’s design, development and client services leadership teams, will remain with the company. While I suspect that US-style lobbying and public affairs will never become as big a business in the UK as it is in the US, this is a good deal for Next 15. Firstly, it has got itself some skilled and very well-connected people, as well as a great little agency with a track record in Washington; second, it has a toehold in the US; thirdly, it has at a stroke been able to extend its service offer.
“Connections Media is a great addition to our group,” says Tim Dyson, CEO of Next 15. “As political and corporate worlds become more social and digital, the products and services offered by Connections Media become increasingly valuable. Being able to offer such services helps us accelerate our transition from being a PR-only group into a full-service digital and social communications group.”
He’s right - this is the kind of deal we’ll be seeing more of in the future.
Barry Dudley is a partner at Green Square, corporate finance advisors to the media and marketing sector.