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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Virtual cartels, oligopolistic structures

Global networks require global technical standards ensuring the compatibility of systems. Being able to define such standards makes a corporation extremely powerful. And it requires the suspension of competitive practices. Competition is relegated to the symbolic realm. Diversity and pluralism become the victims of the globalisation of baroque sameness.

The ICT market is dominated by incomplete competition aimed at short-term market domination. In a very short time, new ideas can turn into best-selling technologies. Innovation cycles are extremely short. But today's state-of-the-art products are embryonic trash.

    According to the Computer and Communications Industry Association, Microsoft is trying to aggressively take over the network market. This would mean that AT&T would control 70 % of all long distance phone calls and 60 % of cable connections.



    AOL and Yahoo are lone leaders in the provider market. AOL has 21 million subscribers in 100 countries. In a single month, AOL registers 94 million visits. Two thirds of all US internet users visited Yahoo in December 1999.



    The world's 13 biggest internet providers are all American.



    AOL and Microsoft have concluded a strategic cross-promotion deal. In the US, the AOL icon is installed on every Windows desktop. AOL has also concluded a strategic alliance with Coca Cola.


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Actual Findings on Internet Advertising

Although Web advertising becomes a significant portion of marketing budgets, advertisers are still unsure on how to unlock the potential of the Internet. Current findings show that:

- Consumer brands spend only a fraction of their advertising budget on on-line advertising.

- Technology companies spend five times more on advertising in the WWW.

- While banner campaigns are still popular, there is no standardized solution for on-line advertising.

- Ad pricing is based on CPM (costs per 1.000 visitors), rather than on results.

- Personalized targeting has not yet taken hold. Instead advertisers mainly target on content.

At the moment three dominant models are used for Internet advertising:

Destination Sites: They use entertainment, high production values and information to pull users in and bring them back again.

Micro Sites: Content sites or networks host small clusters of brand pages.

Banner Campaigns: Those include other forms of Web advertising like sponsorships.

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1913: Henry Ford and the Assembly Line

Realizing that he'd need to lower costs Henry Ford (Ford Motor Company) was inspired to create a more efficient way to produce his cars. Looking at other industries he and his team found four principles, which furthered their goal: interchangeable parts, continuous flow, division of labor, and reducing wasted effort.

The use of interchangeable parts meant making the individual pieces of the car the same every time. Therefore the machines had to be improved, but once they were adjusted, they could be operated by a low-skilled laborer. To reduce the time workers spent moving around Ford refined the flow of work in the manner that as one task was finished another began, with minimum time spent in set-up. Furthermore he divided the labor by breaking the assembly of the legendary Model T in 84 distinct steps. Frederick Taylor, the creator of "scientific management" was consulted to do time and motion studies to determine the exact speed at which the work should proceed and the exact motions workers should use to accomplish their tasks.

Putting all those findings together in 1913 Ford installed the first moving assembly line that was ever used for large-scale manufacturing. His cars could then be produced at a record-breaking rate, which meant that he could lower the price, but still make a good profit by selling more cars. For the first time work processes were largely automated by machinery.

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Implant technology

Kevin Warwick at the University of Reading works on implant technologies which could enhance or modify functions of the limbs and the brain, or bring back functionalities lost, for example, in an accident or as a consequence of a stroke. Implants are also used for identification in "intelligent buildings" where they serve to control "personnel flows". However, the real potential of electronic implants seems to lie in the field of electronic drugs. The basics of the brain computer interface are already explored, and there are now efforts to electronically modify the function of the mind. Large software and IT companies are sponsoring this research which could result in the commercialisation of electronic drugs, functioning as anti-depressants, pain killers and the like. Evidently, the same technologies can also be used as narcotic drugs or to modify people's behaviour. The functioning of body and mind can be adapted to pre-defined principles and ideals, their autonomous existence reduced and subjected to direct outside control.

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Timeline 1970-2000 AD

1971 IBM's work on the Lucifer cipher and the work of the NSA lead to the U.S. Data Encryption Standard (= DES)

1976 Whitfield Diffie and Martin Hellman publish their book New Directions in Cryptography, playing with the idea of public key cryptography

1977/78 the RSA algorithm is developed by Ron Rivest, Adi Shamir and Leonard M. Adleman and is published

1984 Congress passes Comprehensive Crime Control Act

- The Hacker Quarterly is founded

1986 Computer Fraud and Abuse Act is passed in the USA

- Electronic Communications Privacy Act

1987 Chicago prosecutors found Computer Fraud and Abuse Task Force

1988 U.S. Secret Service covertly videotapes a hacker convention

1989 NuPrometheus League distributes Apple Computer software

1990 - IDEA, using a 128-bit key, is supposed to replace DES

- Charles H. Bennett and Gilles Brassard publish their work on Quantum Cryptography

- Martin Luther King Day Crash strikes AT&T long-distance network nationwide


1991 PGP (= Pretty Good Privacy) is released as freeware on the Internet, soon becoming worldwide state of the art; its creator is Phil Zimmermann

- one of the first conferences for Computers, Freedom and Privacy takes place in San Francisco

- AT&T phone crash; New York City and various airports get affected

1993 the U.S. government announces to introduce the Clipper Chip, an idea that provokes many political discussions during the following years

1994 Ron Rivest releases another algorithm, the RC5, on the Internet

- the blowfish encryption algorithm, a 64-bit block cipher with a key-length up to 448 bits, is designed by Bruce Schneier

1990s work on quantum computer and quantum cryptography

- work on biometrics for authentication (finger prints, the iris, smells, etc.)

1996 France liberates its cryptography law: one now can use cryptography if registered

- OECD issues Cryptography Policy Guidelines; a paper calling for encryption exports-standards and unrestricted access to encryption products

1997 April European Commission issues Electronic Commerce Initiative, in favor of strong encryption

1997 June PGP 5.0 Freeware widely available for non-commercial use

1997 June 56-bit DES code cracked by a network of 14,000 computers

1997 August U.S. judge assesses encryption export regulations as violation of the First Amendment

1998 February foundation of Americans for Computer Privacy, a broad coalition in opposition to the U.S. cryptography policy

1998 March PGP announces plans to sell encryption products outside the USA

1998 April NSA issues a report about the risks of key recovery systems

1998 July DES code cracked in 56 hours by researchers in Silicon Valley

1998 October Finnish government agrees to unrestricted export of strong encryption

1999 January RSA Data Security, establishes worldwide distribution of encryption product outside the USA

- National Institute of Standards and Technologies announces that 56-bit DES is not safe compared to Triple DES

- 56-bit DES code is cracked in 22 hours and 15 minutes

1999 May 27 United Kingdom speaks out against key recovery

1999 Sept: the USA announce to stop the restriction of cryptography-exports

2000 as the German government wants to elaborate a cryptography-law, different organizations start a campaign against that law

- computer hackers do no longer only visit websites and change little details there but cause breakdowns of entire systems, producing big economic losses

for further information about the history of cryptography see:
http://www.clark.net/pub/cme/html/timeline.html
http://www.math.nmsu.edu/~crypto/Timeline.html
http://fly.hiwaay.net/~paul/cryptology/history.html
http://www.achiever.com/freehmpg/cryptology/hocryp.html
http://all.net/books/ip/Chap2-1.html
http://cryptome.org/ukpk-alt.htm
http://www.iwm.org.uk/online/enigma/eni-intro.htm
http://www.achiever.com/freehmpg/cryptology/cryptofr.html
http://www.cdt.org/crypto/milestones.shtml

for information about hacker's history see:
http://www.farcaster.com/sterling/chronology.htm:

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Fair use

Certain acts normally restricted by copyright may, in circumstances specified in the law, be done without the authorization of the copyright owner. Fair use may therefore be described as the privilege to use copyrighted material in a reasonable manner without the owner's consent and allows the reproduction and use of a work for limited purposes such as criticism, comment, news reporting, teaching, and research. To determine whether a use is fair or not most copyright laws consider: 1) purpose and character of the use, 2) nature of the copyrighted work, 3) amount and substantiality of the portion used, and 4) effect of the use on the potential market. Examples of activities that may be excused as fair use include: providing a quotation in a book review; distributing copies of a section of an article in class for educational purposes; and imitating a work for the purpose of parody or social commentary.

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Internet Societal Task Force

The Internet Societal Task Force is an organization under the umbrella of the Internet Society dedicated to assure that the Internet is for everyone by identifying and characterizing social and economic issues associated with the growth and use of Internet. It supplements the technical tasks of the Internet Architecture Board, the Internet Engineering Steering Group and the Internet Engineering Task Force.

Topics under discussion are social, economic, regulatory, physical barriers to the use of the Net, privacy, interdependencies of Internet penetration rates and economic conditions, regulation and taxation.

http://www.istf.isoc.org/

http://www.istf.isoc.org/
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Whitfield Diffie

Whitfield Diffie is an Engineer at Sun Microsystems and co-author of Privacy on the Line (MIT Press) in 1998 with Susan Landau. In 1976 Diffie and Martin Hellman developed public key cryptography, a system to send information without leaving it open to be read by everyone.

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Memex Animation by Ian Adelman and Paul Kahn


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CIM

To perform manufacturing firm's functions related to design and production the CAD/CAM technology, for computer-aided design and computer-aided manufacturing, was developed. Today it is widely recognized that the scope of computer applications must extend beyond design and production to include the business functions of the firm. The name given to this more comprehensive use of computers is computer-integrated manufacturing (CIM).

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Industrial design

Industrial design refers to the ornamental aspect of a useful article which may constitute of two or three-dimensional elements. To be qualified for intellectual property protection the design must be novel or original. Protection can be obtained through registration in a government office and usually is given for 10 to 15 years.

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Internet Engineering Steering Group

On behalf of the Internet Society, the Internet Engineering Steering Group is responsible for the technical management of the evolution of the architecture, the standards and the protocols of the Net.

http://www.ietf.org/iesg.html

http://www.ietf.org/iesg.html
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