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Media Savvy Goes to Russia

By Frank Viviano
April 27, 1994

What do President Boris Yeltsin and right-wing extremist Vladimir Zhirinovsky have in common with Chiquita Banana, Apple Computer and Pepsi-Cola?

The answer is PBN Co., a San Francisco public relations firm that has become one of the most influential presences — in business and politics alike — in post- Soviet Russia.

Its client list, which includes the Bechtel Group, DHL, Gulf Resources and Radisson Hotels, is a de facto Who's Who of foreign corporations in Russia's vast new market.

Moreover, their chief executives — along with Yeltsin, Zhirinovsky and the key figures in virtually every Russian government ministry and political party — are all members of the same PBN-founded private club in the heart of Moscow.

Launched by PBN President Peter Necarsulmer shortly after his Moscow public relations firm opened in 1991, the International Press Center and Club "is definitely where you want to be seen and heard if you're ambitious," said Alexander Khachikian, a businessman and former senior director of the Novosty Press Agency.

Sprawling over two floors of the Radisson Slavjanskaya Hotel near the Russian Foreign Ministry, the club's advisory board counts such Russian insiders as Minister of Information Mikhail Fedotov, Izvestia editor-in-chief Igor Golembiovsky, ITAR-TASS News Agency director Vitaly Ignatenko and Yeltsin spokesman Viacheslav Kostikov. Among their foreign colleagues are Allen Weinstein, president of the Center for Democracy, and senior diplomats from the Japanese, American and British embassies.

Members use the club bar and restaurant — which serves California cuisine prepared by a chef from Marin County — for informal lunch gatherings to discuss everything from the shape of foreign policy to the details of multimillion-dollar joint ventures.

Upstairs, in a warren of high-tech conference rooms equipped with television transmitters and simultaneous translation services, Russia's top officials and visiting dignitaries pronounce on global affairs several times per week.

Scores of private guards, backed by occasional detachments of government security police, patrol the corridors.

Distinguished Speakers

Yeltsin and U.S. President George Bush both spoke at the club during the 1991 Moscow Summit. Zhirinovsky, the ultra-nationalist who heads up the largest party bloc in Russia's parliament, has used the center's podium three times in the past eight months to air his controversial proposals.

The prominence of the International Press Center and Club — and the growing influence of its founder, PBN — reflect the novel opportunities that Russia's new openness has presented to imaginative foreign investors.

"Before we set up the center, there simply wasn't a venue in Moscow for the sort of meetings and conferences that go on here," said Tom Thomson, 42, PBN's managing director for Russia and the Commonwealth of Independent States (CIS).

Nor was there anything like the media savvy that PBN brought to this country, illustrated last December by a PR stunt that won nationwide newspaper and television attention. Recognizing that tropical fruits were an exotic mystery to most northerly Russians, PBN and its partner, Reno-based R&R Advertising, talked the Chiquita company into giving away 10 million bananas in Moscow for Christmas.

Publicity Drives

The result "is that two months later every market in town had to sell bananas, or it wasn't considered a worthwhile place to shop," points out an admiring Yelena Poushkarsky, public relations director for a Moscow bank.

Publicity drives must be extraordinary to attract "free" coverage in Russia, where many newspapers have taken to selling "articles" about companies and their products. Even in a respectable daily such as Moskovskaya Pravda, which has a circulation of 400,000 in Moscow, a quarter-page business story costs its subject around $ 1,000.

PBN refuses to buy space for its clients, depending instead on a creative team that works overtime to come up with ads and events so compelling that they can't be ignored.

"For Western advertising and PR people, this is really the ground floor," said Tim O'Brien, 33, the firm's creative director in Moscow. "You invent things on the spot to suit absolutely new conditions."

O'Brien said that he and his fiance, Mary Lutzinger, "arrived in Moscow on the same shipment as the give-away bananas, and walked right into the attempted coup d'etat last October. It was quite a welcome."

Volatile Assignments

The firm's assignments are often volatile, he noted. Since January, O'Brien has headed up a PBN-R&R project to win public acceptance for economic reform in the neighboring ex-Soviet republic of Moldova, where a bloody civil war is under way. With another San Francisco firm, GLS Research, PBN also surveyed public

opinion on Moldovan economic and political affairs and produced television and radio commercials on the nation's privatization scheme in preparation for a critical referendum.

PBN President Necarsulmer, a Stanford graduate, has long had a reputation for inventive media events with a political twist in Northern California.

The firm handled public relations for the 50th anniversary of the Golden Gate Bridge in 1987, the San Francisco visit of Mikhail and Raisa Gorbachev in 1990 and the pyrotechnic inaugural party for Mayor Frank Jordan in 1992. Since 1984, PBN claims it has run referendum campaigns on eight major state legislative initiatives, winning each time.

Spurred by the demand for Western-style PR in Russia, Necarsulmer said PBN's revenues are growing "at an annualized rate of more than 100 percent this — is where the action seems to be." New clients include Arman Financial Corp., which specializes in financial services and trading; Rodale Press, a publisher of a health care magazine; and Andrew Corp., which last month completed the first fiber-optic link between St. Petersburg and Moscow.

Personal Touch

PBN Moscow office director Thomson notes that "business is based on relationships," and personal contact with the ministerial officials who must approve joint ventures is essential. "So a large part of our job is advising clients on whom they must reach in government — and how to present themselves to senior bureaucrats in a way that will achieve results."

The Press Club, with its high-powered membership, is a critical arena for making such contacts, he said. But the real trick is knowing which officials are rising in the chaotic, ever-changing Russian hierarchy.

PBN Moscow has a staff of 16, of whom 13 are native Russians assigned to charting the shifting roster of government.

"It's quite a feat keeping up," said Thomson. "We thought we had things nailed down before the October coup attempt. But since then, a whole new cast (of officials) has materialized, and even our sources in the Kremlin aren't sure from day to day who is in charge."