Public Relations in Russia: A New Century

By Roman Diukarev
with Nikita Sekretarev

(Last in a four-part series)

The dawn of the new millennium saw the near-extinction of political PR – the force that had proved so powerful in the early Yeltsin years. When Vladimir Putin succeeded Yeltsin in office, the political climate in Russia changed significantly. Sometimes called the “New Frost,” the 2000s ushered in the re-privatization of the country. If Yelstin’s government had tried to give everything from factories to freedoms away, Putin’s regime made efforts to take them back.

First, Putin began methodically concentrating the power, building and strengthening the famous ‘power vertical.’ He moved to suppress islands of autonomy and unrestrained liberties.

Putin brought elected governors into line. Under Yeltsin, they had became nothing less then medieval barons and tsars, freely ruling over their domains with little regard for the bosses in Moscow or even federal laws. Putin toughened electoral regulations, making sure no small parties were admitted to Parliament, effectively silencing them and de-facto returning Russia to the time of single-party rule. Finally, he persuaded Russia that it could’t survive without his strong hand, effectively making himself uncontestable.

So where was the need for political consultants?   The demand for groups of PR ‘commandoes-on-call’ ready to fly from Moscow to turn the tide of public opinion in a pinch had evaporated. Now, there were no real elections. There was no need to spin public opinion because public opinion didn’t really matter. 

The sleaze wars were gone too, as there were no more oligarchs bold enough to wage them. Those who didn’t want to fully cooperate with the new regime were forced out of the picture, heading either to London or to Krasnokamensk.

The Great Information Wars were over. Sure, there were some heated media discussions involving notorious power figures. But now, you didn’t need your own TV channel or a couple of friendly columnists to win the fight. You just needed to befriend a judge or a Ministry of Justice official. You didn’t need to have media on your side, only the administrative resources. Leaning on this resource was much easier and much more natural for both Russian politicians and Russian businessmen.

It became more than obvious in 2004, when Alfa Group, one of Russia’s largest conglomerates, filed suit against Kommersant daily for inflicting “financial and reputation damage.” In the end, the court found Kommersant at fault. The amount of the judgment was not as important as the fact that the message had been sent that there was now a new way of doing things.

The media was no longer the ultimate power or the ultimate weapon. The media were compelled to shut up and become modest, or fear a deluge of lawsuits.

The lesson for new times: Government relations matter more than media relations.

Despite the change in political PR, business PR still thrived.

In fact, Russian PR in the 2000s was all about business PR. First, there was an obvious trend of big business switching from using internal to external PR resources. In the ‘90s, it was traditional for Russian businessmen to employ an in-house PR department - sometimes a large one - and shy away from contracting with outsiders.

Moreover, in the ‘90s Russian businessmen didn’t see the agencies’ expertise as anything of value. They were the kings,, the masters of moneymaking, and they fought their way out of turbulent years. They didn’t see the value in listening to advice from outsiders, who they saw as parasitic blabbers. Russian businessmen were not used to being disagreed with or being reasoned with. They retained the same mentality that the Soviet bosses had: “There can be two points of view: one is mine, the other is wrong.”

Having a private press secretary was much more reliable – he was treated like a servant, rather than a specialist, and he did as he was told rather than what he thought was right. Often, Russian businessmen didn’t really want an impartial assessment.

With the new millennium, that changed, too.

Outsourcing became more common, business became more professional, and the attitude toward PR changed. The early 2000s saw one generation leave to be replaced by another: Soviet-era entrepreneurs who had been the owner-managers of their businesses were followed by westernized and rationalized corporate governors, and this influenced both the PR industry and clients.

Business realized that it had been wasteful and illogical to keep a large internal PR staff. Russian companies were learning the ways of business from their foreign competitors, eventually adopting the practice of contracting with third-party PR teams.

Public relations was not the only big change: Russian businesses demonstrated a whole new approach to business conduct and development. The day-fly mentality that was probably necessary to survive in the chaotic ‘90s was fading fast, replaced by a more strategic approach that implied long-term planning, careful management, and real business development. PR, from simple media relations to long-term strategic counseling, was a part of it.

The decline of political PR and the rise of business PR greatly stimulated the development of PR’s methods and philosophy. Russia was entering a short age of prosperity and stability, and business was blooming. Each year, market competition became more intense, and Russian companies were forced to constantly explore new avenues of communication to retain their competitive edge.

To keep up with growing demand, and with the demand becoming more complicated, PR agencies had to constantly widen the areas of their expertise.

In the 2000s, Russian business faced a new problem: It had outgrown the local market, and felt the need to expand outward, yet it was unwelcome everywhere. In the 1990s, Russian business had neglected PR, and in the early 2000s it paid the price. 

This caused Russian business to burnish its reputation, suddenly an asset to a company’s capitalization, and this created the need for reputation management services. From this grew corporate social responsibility programs, which eventually became an expected practice.

By the mid-2000s, investor relations became a PR product.   Major Russian companies began going public. Vimpelcom floated an initial public offering of stock and became listed on the prestigious New York Stock Exchance. Wimm Bill Dann Foods listed in London. Gradually, ‘dirty’ Russian money found its way to the west, and the road was paved with PR efforts.

The Russian PR industry followed the same route taken by other emerging and fast-growing industries. By the 2000s, the industry had reached a stage of differentiation and cross-disciplinary diffusion. Today, agencies demonstrate a multi-field approach, striving to become jacks-of-al-trades. PR has entered areas like branding and BTL, overlapping with marketing. To a degree, it became quasi-marketing, or, officially, integrated marketing communications. Clients requested brand support, development, positioning and launch as part of their business PR assignment.

“What the Russian PR industry still lacks are so-called boutique agencies,” said one industry observer. “Small agencies with a niche focus, providing unique expertise in narrow areas with specific PR demands, such as oil, pharmacy, sports, crisis management, or foods. They know just one trick, but they know it absolutely perfectly. Let’s remember Mike Lee, who was Director of Communications and Public Affairs for London’s 2012 Olympic bid. After that success, he established his own agency, Vero Campaigning Communications. These people know how to campaign, and know it great depth. And recently Vero secured the success of Rio’s 2016 Olympic bid! That’s some expertise. Russia doesn’t have such agencies now, but it will. We can see signs that the market is ready to accept them.”

Another trend: As the Russian PR market becomes more sophisticated and rich in expertise, the PR business itself sadly becomes less profitable. Industry turnover has grown in step with general economic growth, but its cost-effectiveness has decreased as agencies face growing rental, maintenance, and software costs, as well as payroll expenses.

In addition, there’s one more problem the Russian PR industry needs to solve: The somewhat negative image of PR that lingers from the wild ‘90s. Even today, people judge public relations by their initial impression dating back to the days of ‘black PR” and the sleaze wars.

“Ironically, the PR business designed to help others look good is looking not so good itself,” says one insider. “We have a great future ahead of us. Today, all we hear about is crisis, but crises come and go. Professional PR is always in demand, and there is enough space under the sun for each agency. We just need to remember that among all our skills, the ability to get to the heart of the matter, the ability to listen rather than talk, and the ability to be creative no matter what are valued the most.”