The Advertising Industry

The advertising industry is dominated by three huge advertising networks, which offer their services throughout the world. Gross income of the three leading agencies is twice as much, as the one of places four to ten.

Table: World's Top 10 Advertising Organizations 1999

(figures in millions of U.S. dollars)

Rank 1999

Advertising Organization

Headquarters

World-Wide Gross Income 1999

1

Omnicom

New York, USA

$ 5,743.4

2

Interpublic Group of Cos.

New York, USA

$ 5,079.3

3

WPP Group

London, UK

$ 4,819.3

4

Havas Advertising

Levallois-Perret, France

$ 2,385.1

5

Dentsu

Tokyo, Japan

$ 2,106.8

6

B Com3 Group

Chicago, USA

$ 1,933.8

7

Young & Rubicam Inc.

New York, USA

$ 1,870.1

8

Grey Advertising

New York, USA

$ 1,577.9

9

True North

Chicago, USA

$ 1,489.2

10

Publicis SA

Paris, France

$ 1,434.6



Table: Top 10 Global Marketers 1998

(figures in millions of U.S. dollars)

Rank 1998

Advertiser

Headquarters

World-Wide Media Spending 1998

1

Procter & Gamble Co.

Cincinnati (US)

$ 4,747.6

2

Unilever

Rotterdam (NL)/London (UK)

$ 3,428.5

3

General Motors Corp.

Detroit (US)

$ 3,193.5

4

Ford Motor Co.

Darborn (US)

$ 2,229.5

5

Philip Morris Cos.

New York

$ 1,980.3

6

Daimler Chrysler

Stuttgart (GER)/Auburn Hills (US

$ 1,922.2

7

Nestle

Vevey (SUI)

$ 1,833.0

8

Toyota Motor Corp.

Toyota City (JP)

$ 1,692.4

9

Sony Corp.

Tokyo (JP)

$ 1,337.7

10

Coca-Cola Co.

Atlanta (US)

$ 1,327.3



On the other hand the three biggest advertisers only spend about US$ 2 millions less than places four to ten together. Whereas money spent on advertising in traditional media comes from very diverse categories, companies offering computer hard- and software, peripherals or Internet services mainly pay for on-line advertisements.

Table: Top 10 Internet Advertisers 1998

(figures in millions of U.S. dollars)

Rank 1998

Advertiser

Internet Spending 1998

1998 - 1997 % Change

1

Microsoft Corp.

$ 34.9

9.4

2

IBM Corp.

$ 28.5

58.6

3

Compaq Computer Corp.

$ 16.2

169.8

4

General Motors Corp.

$ 12.7

84.8

5

Excite

$ 12.4

1.5

6

Infoseek Corp.

$ 9.3

22.3

7

AT&T Corp.

$ 9.3

43.5

8

Ford Motor Co.

$ 8.6

46.7

9

Hewlett-Packard Co.

$ 8.1

102.9

10

Barnes & Noble

$ 7.6

280.2



Source: Advertising Age

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Public Relations and Propaganda

Public relations usually is associated with the influencing of public opinion. Therefore it has subsequently been linked with propaganda. Using one of the many definitions of propaganda "... the manipulation of symbols as a means of influencing attitudes on controversial matters" (Harold D. Lasswell), the terms propaganda and PR seem to be easily interchangeable.

Still many authors explicitly distinguish between public relations, advertising and propaganda. Unlike PR, which is often described as objective and extensive information of the public, advertising and propaganda are associated with manipulative activities. Nevertheless to treat public relations and propaganda as equivalents stands in the tradition of PR. Edward L. Bernays, one of the founders of public relations wrote "The only difference between propaganda and education, really, is the point of view. The advocacy of what we believe in is education. The advocacy of what we don't believe is propaganda."

Also institutions like the German Bundeswehr use the terms publics relations and propaganda synonymously. After a 1990 legislation of the former minister of defense Stoltenberg, the "psychological influence of the enemy" was ceased during peace time and the Academy for Psychological Defense renamed to Academy for Information and Communication, among other things responsible for scientific research in the field of public relations.

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On-line Advertising and the Internet Content Industry

Applied to on-line content the advertising model leads to similar problems like in the traditional media. Dependence on advertising revenue puts pressure on content providers to consider advertising interests. Nevertheless new difficulties caused by the technical structure of online media, missing legal regulation and not yet established ethical rules, appear.

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Hill & Knowlton

Although it is generally hard to distinguish between public relations and propaganda, Hill & Knowlton, the worlds leading PR agency, represents an extraordinary example for the manipulation of public opinion with public relations activities. Hill & Knowlton did not only lobby for countries, accused of the abuse of human rights, like China, Peru, Israel, Egypt and Indonesia, but also represented the repressive Duvalier regime in Haiti.

It furthermore played a central role in the Gulf War. On behalf of the Kuwaiti government it presented a 15-year-old girl to testify before Congress about human rights violations in a Kuwaiti hospital. The girl, later found out to be the daughter of Kuwait's ambassador to the U.S., and its testimony then became the centerpiece of a finely tuned PR campaign orchestrated by Hill & Knowlton and co-ordinated with the White House on behalf of the government of Kuwait an the Citizens for a Free Kuwait group. Inflaming public opinion against Iraq and bringing the U.S. Congress in favor of war in the Gulf, this probably was one of the largest and most effective public relations campaigns in history.

Running campaigns against abortion for the Catholic Church and representing the Church of Scientology, large PR firms like Hill & Knowlton, scarcely hesitate to manipulate public and congressional opinion and government policy through media campaigns, congressional hearings, and lobbying, when necessary. Also co-operation with intelligence agencies seems to be not unknown to Hill & Knowlton.

Accused of pursuing potentially illegal proxy spying operation for intelligence agencies, Richard Cheney, head of Hill & Knowltons New York office, denied this allegations, but said that "... in such a large organization you never know if there's not some sneak operation going on." On the other hand former CIA official Robert T. Crowley acknowledged, that "Hill & Knowlton's overseas offices were perfect 'cover` for the ever-expanding CIA. Unlike other cover jobs, being a public relations specialist did not require technical training for CIA officers." Furthermore the CIA, Crowley admitted, used its Hill & Knowlton connections to "... put out press releases and make media contacts to further its positions. ... Hill & Knowlton employees at the small Washington office and elsewhere distributed this material through CIA assets working in the United States news media."

(Source: Carlisle, Johan: Public Relationships: Hill & Knowlton, Robert Gray, and the CIA. http://mediafilter.org/caq/)

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Product Placement

With television still being very popular, commercial entertainment has transferred the concept of soap operas onto the Web. The first of this new species of "Cybersoaps" was "The Spot", a story about the ups and downs of an American commune. The Spot not only within short time attracted a large audience, but also pioneered in the field of online product placement. Besides Sony banners, the companies logo is also placed on nearly every electronic product appearing in the story. Appearing as a site for light entertainment, The Spots main goal is to make the name Sony and its product range well known within the target audience.

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"Stealth Sites"

"Stealth sites" account for a particular form of hidden advertisement. Stealth sites look like magazines, nicely designed and featuring articles on different topics, but in reality are set up for the sole purpose of featuring a certain companies products and services. "About Wines" for example is a well-done online magazine, featuring articles on food and travel and also publishes articles on wine, which surprisingly all happen to be from Seagram.

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Public Relations and the Advertising Industry

The public relations industry, the same as advertising, is concentrated in the hands of few dominant firms. Still, the striking element about corporate public relations is that PR firms are tightly related to advertising companies. Nine out of the ten biggest international PR agencies have close ties with the advertising industry. Also, looking at the largest acquisitions involving U.S. PR firms from 1997 to 1999 it is apparent that money coming from advertising agencies has played an important role.


Table: Top 10 PR Firms 1998


Rank 1998

PR Firm

Advertising Agency Related

1998 Net Fees (in U.S. $)

1997 - 1998 % Change

1

Burson-Marsteller

yes

258,417,000

4.2

2

Hill and Knowlton

yes

206,000,000

8.9

3

Porter Novelli Int.

yes

183,050,000

23.6

4

Shandwick

yes

170,300,000

7.3

5

Fleishman-Hillard

yes

160,692,000

19.1.

6

Edelman PR Worldwide

no

157,840,530

18.1

7

Ketchum

yes

125,248,000

29.6

8

BSMG Worldwide

yes

118,963,000

93.0

9

Weber PR Worldwide

yes

83,166,000

36.2

10

GCI/APCO

yes

79,667,957

28.4




With many PR agencies sold to advertising companies, the advertising industry's influence further increases; enabling them to offer their clients not only advertising services, but also know-how in marketing, public opinion, crisis and issues management and political lobbying.

Table: Acquisition of PR Agencies (1997 - 1999)

Acquired Company

Buyer

Buyers Industry

Estimated Purchase Price (in millions of U.S. $)

International PR

Interpublic Group of Cos.

Advertising

230

Fleishman-Hillard

Omicom Group

Advertising

85

Ketchum

Omnicom Group

Advertising

60

Dewe Rogerson

Incepta

Advertising

40

Financial Rel. Bd.

BSMG/TN

Public Relations

33

Weber PR

Interpublic Group of Cos.

Advertising

15

Alexander

WPP Group

Advertising

15

Charles Barker

BSMG/TN

Public Relations

15



Source: Odwyerpr.com.

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NSA

U.S. intelligence agency within the Department of Defense that is responsible for cryptographic and communications intelligence and security. The NSA grew out of the communications intelligence activities of U.S. military units during World War II. The NSA was established in 1952 by a presidential directive and, not being a creation of the Congress, is relatively immune to Congressional review; it is the most secret of all U.S. intelligence agencies. The agency's mission includes the protection and formulation of codes, ciphers, and other cryptology for the U.S. military and other government agencies, as well as the interception, analysis, and solution of coded transmissions by electronic or other means. The agency conducts research into all forms of electronic transmission. It operates posts for the interception of signals around the world. Being a target of the highest priority for penetration by hostile intelligence services, the NSA maintains no contact with the public or the press.

http://www.nsa.gov/index.html

http://www.nsa.gov/index.html
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CANYON

A US military signals intelligence satellite of the second generation from the 1970s.

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Hill & Knowlton

John W. Hill opened the doors of his first public relations office in 1927 in Cleveland, Ohio. His early clients were banks, steel manufacturers, and other industrial companies in the Midwest. Hill managed the firm until 1962, and remained active in it until shortly before his death in New York City in 1977. In 1952, Hill and Knowlton became the first American public relations consultancy to recognize the business communication implications engendered by formation of the European Economic Community. Hill and Knowlton established a network of affiliates across Europe and by the middle of the decade had become the first American public relations firm to have wholly-owned offices in Europe. Hill and Knowlton, a member of the WPP Group integrated communications services family, has extensive resources and geographic coverage with its 59 offices in 34 countries. Hill and Knowlton is known for its hard-hitting tactics and said to have connections with intelligence services.

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Rudy Giuliani

Born in 1944, Giuliani became famous in the mid Eighties, as a typical Eighties figure: a censor of corruption and greed. In the Seventies he had switched his registration from Democratic to Republican, and served a stint in the Reagan Justice Department. In 1983 he became U.S. Attorney for the southern District of New York, and his career took off. He was aggressive, headline grabbing, none too scrupulous about the finer points of civil liberties, and often effective. He used the RICO Act against organized crime, and pioneered the use of asset forfeiture in prosecuting drug dealers. He also moved against political corruption in New York City, toppling the Democratic leaders of the Bronx and Queens.

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Satellites

Communications satellites are relay stations for radio signals and provide reliable and distance-independent high-speed connections even at remote locations without high-bandwidth infrastructure.

On point-to-point transmission, the transmission method originally employed on, satellites face increasing competition from fiber optic cables, so point-to-multipoint transmission increasingly becomes the ruling satellite technology. Point-to-multipoint transmission enables the quick implementation of private networks consisting of very small aperture terminals (VSAT). Such networks are independent and make mobile access possible.

In the future, satellites will become stronger, cheaper and their orbits will be lower; their services might become as common as satellite TV is today.

For more information about satellites, see How Satellites Work (http://octopus.gma.org/surfing/satellites) and the Tech Museum's satellite site (http://www.thetech.org/hyper/satellite).

http://www.whatis.com/vsat.htm
http://octopus.gma.org/surfing/satellites
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RTMark

RTMark is a group of culture jammers applying a brokerage-system that benefits from "limited liability" like any other corporation. Using this principle, RTMark supports the sabotage (informative alternation) of corporate products, from dolls and children's learning tools to electronic action games, by channelling funds from investors to workers. RTMark searches for solutions that go beyond public relations and defines its "sbottom line" in improving culture. It seeks cultural and not financial profit.

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GCHQ

GCHQ is the British Government Communication Headquarters, which is in fact an electronic monitoring centre which intercepts communications using spy satellites, listening devices and code-cracking equipment. The 1994 Intelligence Services Act defines GCHQ's role in the post Cold War world. National security, economic well-being and the prevention and detection of serious crime are its headline interests. It routinely gathers information on drug-dealing, terrorism, and the movement of arms and key resources such as oil, but is also said to be heavily involved in ECHELON. GCHG praises itself to use and design high end technology such as Cray systems, Tandem based storage and high-end workstations, as well as software for Signals Analysis, Complex Data Manipulation, Translation and Transcription.

http://www.gchq.gov.uk/

http://www.gchq.gov.uk/
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Sony Corporation

Japanese SONY KK, major Japanese manufacturer of consumer electronics products. Headquarters are in Tokyo. The company was incorporated in 1946 and spearheaded Japan's drive to become the world's dominant consumer electronics manufacturer in the late 20th century. The company was one of the first to recognize the potential of the consumer videotape market. In 1972 it formed an affiliate to market its Betamax colour videocassette system. In 1987-88 Sony purchased the CBS Records Group from CBS Inc., thus acquiring the world's largest record company. It followed that purchase with the purchase in 1989 of Columbia Pictures Entertainment Inc.

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