PR in Russia: Gloom vs. Growth

PR in Russia: the new generation breaks free

The Russian PR industry is only 15 years old and is already a complex beast, full of contradictions and with a questionable reputation inside and outside the country. But this does not stop the industry from growing at an annual rate of 30-40 per cent a year.

The complexity of the industry is a mirror of the complexity of Russia itself: a country of 140 million people, 89 regions, 11 time zones, hundreds of cultures, nationalities, and many religions. It is a place where East meets West, and where Christianity co-existed with Islam for centuries. We also need to remember that Russians said 'No' to communism only in 1991, and the process of building a market economy has been painful.

The same complexity applies to the Russian communications and media environment. There are hundreds of national media outlets and dozens of local media in every city, and every year there are new publications and broadcast channels.

The Soviet Union had its own working tool of communication - propaganda - and although public relations is now regarded as an accepted communications vehicle, propaganda is far from dead.

The origins of Russian PR can be traced to the first public relations campaign in the country: the launch of McDonald's in Moscow in the late 1980s. This was a PR stunt that turned into propaganda, as Soviet journalists had no choice but to praise the only fast food chain in town, particularly in the midst of a frenzy of criticising everything that had to do with the old Soviet culture and praising anything Western.

This precedent of a propaganda/PR mix proved to have a long-lasting effect on the Russian public relations industry. It evolved into the so-called "black PR", used mostly by political parties during election campaigns, when PR tools were combined with such methods as the pouring of informational garbage on political rivals. In this market, hundreds of millions of unaccounted dollars landed in the pockets of corrupt journalists and "PR technologists".

In the rise of the crony capitalism in the ex-Soviet Union and the triumph of the oligarchs, the richest and biggest companies had the best PR: not only did they buy stories, editors and reporters, but entire media outlets. Black PR agents still work in Russia today, but have no future as the market matures.

In this "Wild East" set-up a new industry was born. A handful of young public relations enthusiasts and bookworms started working as communications consultants to international companies operating in the emerging Russian market. They were wise enough not to get involved in shady privatisation deals and corrupt media arrangements.

When the financial crisis of 1998 hit Russia and many foreign investments fled the country, local manufacturing had seen the first growth in years. In particular, FMCG production picked up and has been on the rise ever since. Today, the drivers of growth in the PR industry are the IT, consumer, healthcare and finance industries.

Oil oligarchs and raw materials companies still use the PR/propaganda vehicle and try not to outsource public relations services, and when they do go looking for a Western PR consultant this can lead to misunderstanding. Being used to black PR methods, local firms that attempt an IPO or a communications breakthrough in the West find it difficult to work with international PR networks. Education of Russian clients is thus a must.

The rapidly evolving nature of the Russian consumer market provides great opportunities for innovative, Western-standard PR campaigns to make a real difference. We worked with leading white goods producer Bosch, for instance, to run a programme to boost the fledging dishwasher market in Russia. The product was not new, but was viewed as an unnecessary expense by most Russian consumers, and less than five per cent of Russian homes had a dishwasher.

Through an innovative campaign which included original consumer research, competitions, support from artist and musician opinion leaders, and an art installation - A Monument to the Time Wasted on Washing Up - Bosch shifted public opinion towards the advantages of owning a dishwasher, growing the market by more than 50 per cent and its own sales by 70 per cent.

The PR industry is worth around US $100 million of fees paid to agencies, but a huge proportion of PR is carried out in-house, particularly by oil and raw materials producers. In a developing market like Russia, where many industries have double-digit growth figures, PR and advertising are regarded as costs, and shareholders often decide that this function should be maintained inside the company.

Russian television - particularly national channels controlled or influenced by the government - has a simple way of understanding business news: if the company name is mentioned, it is considered to be an advertisement. This means that the story has to be paid for, regardless of whether a company is creating thousands of jobs or investing millions into infrastructure and social welfare. Some print media outlets take a similar approach, but as the local media market is maturing, there has been a positive change in attitude.

There are many challenges for modern PR practitioners in Russia, thanks to its cultural, political and industrial heritage. But things are changing fast: black PR has a limited future as respected international communications networks become more established, and local companies become more transparent and seek to integrate themselves into the world economy.

By Andrew Sveshnikoff, vice president of ADV, Russia's leading communications group, and founder of PRP, one of Russia's largest PR agencies and a member of the Weber Shandwick affiliate network.

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