Firms Employ PR Tactics to Boost Image

By Viktoria Braychenko
February 20, 2003

Myron Wasylyk, vice president and managing director at PBN, says payment for articles is ineffective, particularly in the highly competitive business press.

Demand for public relations services in both government and media has been increasing steadily for several years now, with the market expanding by an estimated 20 percent last year. Despite the growth, PR companies say lack of competition in some key industries is preventing the market's further expansion.

"There is more demand for PR services [in Ukraine] because there is more investment in the market," said Myron Wasylyk, vice president and managing director at the Washington-based PBN public relations firm. Today, many Ukrainian business leaders are moving in a new direction and branching out, turning to professional PR firms for help.

The past few years have welcomed more players into the domestic business arena resulting in stiffer competition. Recognizing changes in the market, companies are now using PR tactics for brand positioning. Companies seeking out investors are especially interested in boosting their profiles.

"Many large Ukrainian companies are trying to get investment from the West, or cash from Western banks, and thus have to position themselves using PR services," Wasylyk said.

Martin Nunn, the director of White's Shandwick International, also agreed, saying that some Ukrainian companies have dark pasts and now wish to send the message that "their pasts are truly in the past."

Like PBN, other public relations firms are more than willing to help local companies brighten their images, but due to monopolies in some industries, there is little work for the public relations firms to do. Privatized industries are more competitive, Wasylyk said.

"If an industry is privatized, like beverages or cigarettes, there is competition and PR companies work," he said. "But, if there is little or no competition like in the telecommunications industry, for example Ukrtelecom, or in oil and gas, there is no competition and therefore no work for PR firms."

He said that companies which hold monopolies are still disseminating propaganda like in Soviet times. "Propaganda from monopolists is not very effective," Wasylyk said.

More privatization and more investment are the most important factors for boosting the public relations market. As these changes occur, the PR industry will be more mature and more competitive, Wasylyk said.

Although local companies are making the switch to public relations services, industry representatives say that many potential clients still view the work of PR firms as consisting of mainly "zakazukha," or paid articles.

Artem Zeleny, head of the PR department of TMA Draft Ukraine advertising agency, said that most people working in PR have backgrounds in either journalism or politics. While those with experience in politics make good lobbyists, journalists tend to make the best PR managers due to their writing skills.

"Many public relations firms are still involved in the practice of publishing paid articles which are bad for the industry," said Oleksandr Ustenko, director of PR at Ark Thomson advertising agency.

Zeleny agrees, but is hopeful about the future of the industry. "Three years ago there was no PR industry, only paid articles," he said. Now PR companies are steering away from checkbook journalism and trying to build bridges between companies and the public through mass media outlets, he said.

Wasylyk said that payment for articles is ineffective, particularly for business press, which is highly competitive. It still happens, but is not what we [PBN] practice, he said. "In fact, most international PR agencies working in the city don't do that, either."

Now, more than ever, public relations firms are relying on free press. The success of a promotion may now depend on Ukraine's journalists. "PR agencies are trying to pitch interesting news items, but it is up to journalists to either cover them or not," Zeleny said.

Despite impressive growth, Ukraine's PR industry lags a long way behind Russia's, where agencies have already gained a significant foothold and the industry is booming.

According to the PR firm Publicity Creating, Ukraine's PR market grew by more than 20 percent last year to $60 million, compared to 70 percent growth in Russia. Valery Kureyko, Publicity Creating business development director, said the number of companies interested in PR services is increasing by 40 percent annually. Ukraine currently has about 30 specialized PR firms.

"The number of companies now interested in PR services totals 10,000. The PR market is expected to develop more dynamically than the advertising market this year," Kureyko said.

Although it is difficult to estimate how much international companies charge for their services, Wasylyk said that rates are largely dependent on the kinds of services purchased. In the PR industry, clients are charged on a per-hour basis, Wasylyk said.

"If it is government relations or lobbying services, an agency can charge from $250 to $350 per hour," he said. For media relations, services are much different and range from $100 to $250 per hour, depending on whether it is client management or work with journalists. Other services, such as the monitoring of print media, are cheaper and may begin at $50 per hour.

Wasylyk thinks that creating an association of PR experts would improve the environment for domestic PR firms.

"The purpose of the association would be to bring together PR companies that are working on the market, to discuss the industry's issues and problems and also develop "practices," Wasylyk said.

Those companies in association are committed using fare competition and high practical standards. He said that one of the ideas behind forming the association is that PR firms would publicly say how much money they collect or their revenues, and than "we will know how much money has been spent on PR," Wasylyk said.

Zeleny said that it is much easier to estimate the effectiveness of Western PR firms' services because the markets are very specific. Ukraine is in a different stage of development.

"We don't have stock exchange, so companies are not listing their shares on the exchange," Zeleny said. "In the West, 1 percent growth in business is usually followed by 3 percent growth in shares."

"PR is PR whether it is in Africa or Ukraine or U.S or Japan. What's different is the markets," Wasylyk said.

Markets in the West are much more mature and companies are engaged in different types of activities.

However, the market in Ukraine is still developing, meaning that the work domestic PR agencies do is more flexible than in the West, Wasylyk said.

"I think that working in PR in Ukraine is much more exciting than [working] in the West because the market here is constantly changing."