February 11, 2005

Omnicom's Ketchum Puts Spin on the Media for White House with Influencer Relationship Management

Ketchum & Influencer Relationship Management
CorpWatch is at it again, outing Omnicom's Ketchum PR unit paying conservative pundit Armstrong Williams $240K to sell his soul and pitch favorable opinions on the Dept. of Education's "No Child Left Behind" (NCLB) Act, garning an easy $700,000 in fees themselves for their trouble in evaluating how the effort turned out and produce video news releases on the subject:
    When the news of the Williams deal became public, Democratic members of Congress took a look at government contracts with PR firms, and the U.S. House Committee on Government Reform produced some quick but startling numbers. In a January report, the committee found that federal agencies spent more than $250 million on contracts with PR agencies between 2001 and 2004 – nearly twice as much as the $128 million that Clinton spent between 1997 and 2001.

    “There used to be a time when our government would let the facts speak for themselves,” lamented Richard Durbin, a Democratic senator from Illinois, during one Congressional debate. “It apparently is the position of the Bush administration that the facts in and of themselves are not articulate.”

    Two more questionable examples have cropped up since the Williams flap. Conservative columnists Maggie Gallagher, whose writing is distributed by Universal Press Syndicate (which also publishes the Dear Abby column and comic strips like Doonesbury, Calvin & Hobbes and Garfield) and Mike McManus (whose work appears in over 50 newspapers like the Birmingham News in Alabama) were exposed as having been on the payroll of the Department of Health and Human Services.

    Both columnists agreed to work on behalf of the Bush Administration efforts to promote marriage.

    While President George Bush officially denounced the practice of government agencies paying commentators, it is yet to be seen whether the scandal will lead to any lasting ethical change on the part of some in the PR industry, where the need to identify political and ideological allies is routine practice, or on the part of the government, which has been historically concerned with the need to flash “positive” messages – and propaganda -- into what they perceive as a negative and hostile media landscape. Ketchum and the DoE, for instance, initially defended the Williams arrangement.

    According to the House report, companies owned by New York-based Omnicom have a virtual monopoly -- 89 percent -- of government PR contracts awarded between 2001 and 2004. The company, whose headquarters are on Madison Avenue, the heart of the advertising industry, reeled in $8.6 billion in revenue in 2003 from clients like Kodak, Dow Chemical and Heinz ketchup.

    Ketchum held $97 million, one-third of the total, followed by the Matthews Media Group ($52 million), Fleishman-Hillard ($41 million) and Porter Novelli ($33 million).

    While it is not known how many of these contracts involve practices such as the Williams deal, the government seems to take the scandal seriously. The list of agencies looking into PR contracts, in one way or the other, includes the Government Accountability Office, the Inspector General, the Federal Communications Commission, Congress and the Pentagon.

    Ketchum, which has earned numerous Silver Anvils (the industry’s highest honor) from the Public Relations Society of America as well as a 2002 “Agency of the Year” award from PR Week, the popular industry magazine, initially responded to the incident via a January 13 PR Week editorial by Ray Kotcher, chief executive officer of Ketchum. In the editorial, Kotcher put a positive spin on the scandal, calling it a “transformational event.” He referred to Williams' behavior as "an oversight" and implied that the scandal was politically motivated.

    “It is no coincidence that this activity occurred in Washington,” Kotcher wrote, “where political divisiveness is at an all-time high."

    He also suggested the rise of punditry had something to do with the whole affair:

    “Williams' unusual role as both a pundit and information source – through his ad-production firm – would seem to blur the lines that once so clearly defined journalism and news organizations,” Kothcer wrote. “I'm not sure even the media itself can agree anymore on how to strictly define and distinguish journalists and news organizations.”

Ketchum's competitors are up in arms and the PR industry as a whole is in a state of denouncement around Ketchum's practices, with Edelman's CEO saying in his blog how "disappointing" the behavior was.

Meanwhile, this all appears to be a part of a bigger program, called "IRM" or "Influencer Relationship Management" - concentrated on helping corporate clients influence the influencers by cutting them fat checks that Ketchum delivers in unmarked bills in the dead of night. However, the service appears to be on the wane, after having been ripped from Ketchum's Web site. Lucky for us, the Wayback Machine can supply all you need to learn about IRM at your leisure.

Enjoy,

- Arik

Posted by Arik Johnson at February 11, 2005 02:42 PM