Hill & Knowlton

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When John Wiley Hill and Don Knowlton became partners in a "corporate publicity office" in Cleveland in 1933, the U.S. was in the throes of the Great Depression, a disaster that actually proved beneficial for the two. Many Americans believed the nation's business leaders were to blame for the financial crisis, and an image problem of such magnitude could only benefit a fledgling firm such as H&K.

H&K's most important account in its early days was the American Iron & Steel Institute. With the advent of the New Deal in 1933 and its pro-labor stance, the labor movement felt encouraged to attempt unionization of the steel industry. H&K prepared full-page advocacy ads for AISI-which like the rest of the steel industry was opposed to unionization-that ran in 382 newspapers.

A new agency

In 1947, Mr. Hill, having relinquished to Mr. Knowlton 95% of the ownership of the Cleveland agency (which became known as Hill & Knowlton of Cleveland), founded a separate firm in New York—Hill & Knowlton. The new agency projected a staid image, participated in the policymaking of its clients and engaged in client selectivity—refusing, for example, to accept religious or political accounts.

In the late 1940s, H&K became embroiled in the butter vs. margarine controversy when it accepted as clients the American Butter Institute, the National Creameries Association and the National Cooperative Milk Producers Federation. Although early margarines had had a somewhat off-putting taste, by the late 1940s the product had acquired a much better flavor and a more favorable image. At issue in the dispute was the repeal of an onerous tax and color restrictions designed to impede the sale of yellow margarine.

Taking into account formidable opposition to its clients' interests, as well as the success of pro-margarine legislation in the U.S. House of Representatives, H&K urged the dairy groups to accept the repeal of the tax but continue to insist on the color ban. The color issue failed, however, as supporters of margarine were quick to note that yellow coloring was also added to butter.

The steel strike

The steel strike of 1952 pitted H&K, working on behalf of the large steel companies, against the government and labor. At the heart of the crisis was labor's demand for a wage increase and benefits that would establish parity with what was being offered other union members, such as coal miners. The big steel companies asserted that they could raise wages only by raising prices.

Because the Korean War was under way, government stabilization agencies had to authorize all wage and price policies. The government came down on the side of labor when the Office of Price Stabilization determined that the steel companies could offer a wage hike without increasing prices.

On March 20, 1952, the Wage Stabilization Board released its recommendations, which the steel companies rejected. Labor agreed to resume negotiations, the steel companies balked and President Harry Truman ordered the seizure of the mills, which were operated on behalf of the government until the executive order was overturned by the U.S. Supreme Court. Steelworkers walked out, bringing about a 54-day strike, but an agreement was finally reached on July 26, 1952.

The approach H&K employed before President Truman ordered the mills seized differed from the one it used after the seizure. On April 4, 1952, H&K released a statement on behalf of the steel companies that attributed the problem to the demands of avaricious workers, already among the country's highest-paid industrial laborers. If their demands were realized, the statement claimed, it would have a negative impact on the nation as well as the industry.

After the seizure, the dominant issue became the administration's involvement and the constitutionality of the president's action, with frequent allusions made to the specters of socialism and totalitarianism.

Tackling tobacco

In 1953, when cigarette sales started to decline, marketers became alarmed and engaged the services of H&K. With the support of nearly all the major tobacco marketers, H&K embarked on a public relations campaign that saw the establishment of the Tobacco Industry Research Committee, which worked for the interests of the marketers.

The approach taken in support of tobacco focused on alleged scientific disagreement with respect to the dangers of smoking. H&K developed a number of arguments based on the idea that the final conclusions about the hazards of smoking were not then available. Scientists were forced to defend their methodologies and results, and the motives of some antismoking doctors, who were portrayed as being either puritanical fanatics or publicity seekers, were impugned.

In addition, the TIRC's putative large allocations for research were publicized (in reality, these were small compared with profits and allocations for PR and advertising). In 1969, after more than a decade and a half of work on behalf of tobacco, H&K severed its relations with the industry.

Branching out

After having established a network of affiliated firms outside the U.S., H&K established international headquarters in Paris in December 1954. The agency initially had little international business, but by 1960 its network encompassed 30 countries.

Mr. Hill relinquished his post as president to Bert Goss in 1955 and became chairman. Mr. Goss was succeeded by Dick Darrow, who passed away before Mr. Hill himself, who died in 1977. Loet Velmans became president in 1976. In 1987, WPP Group acquired Hill & Knowlton.

By 1990, H&K was the largest public relations firm in the world. Its new CEO, Robert Dilenschneider, launched a program of acquisitions that involved the purchase of lobbying firms and 10 other public relations agencies, including Carl Byoir & Associates. In 1990, H&K merged with the lobbying firm Wexler Reynolds.

Under Mr. Dilenschneider, the agency abandoned its selective approach to the acquisition of clients, working for virtually anyone in need of representation. Mr. Dilenschneider abrogated Mr. Hill's proscription against the representation of religious and political groups, and took on such controversial accounts as the Church of Scientology, the Bishops Pro-Life Committee of the U.S. Catholic Conference, the evangelist Larry Jones and a number of political clients, including Citizens for a Free Kuwait.

Records of the U.S. Department of Justice indicate that the Kuwaiti government contributed $11.8 million to CFK's budget, whereas 78 people residing in the U.S. and Canada contributed about $18,000. After the Persian Gulf War, H&K was accused of having culled and coached Kuwaiti refugees so that those with the most riveting stories and those with stories most in harmony with H&K's agenda received exposure. The case of Nayirah, a Kuwaiti teen-ager, was especially noteworthy.

In testimony before the U.S. Congress in October 1990, Nayirah claimed to have seen Iraqi soldiers rip premature babies from their incubators. The New York Times, in a story that appeared a year after the war, revealed that Nayirah was, in fact, the daughter of Kuwait's ambassador to the U.S., Sheik Saud Nasir al-Sabah.

Further aspersions were cast on the so-called incubator atrocity when in an ABC News broadcast, employees of the hospital where the incident had allegedly taken place denied it had occurred. Mr. Dilenschneider left H&K in September 1991, and with his departure the firm attempted to return to its roots.

Client choice was once again given prominence, and an effort was launched to rehabilitate the agency's image. By 2000, H&K had revenue of $306 million, ranking it No. 3 worldwide, according to the Council of PR Firms Top 50 Ranking.

In 2001, H&K expanded its worldwide network to include 66 offices in 35 countries and won new business from Ford Motor Co., Motorola Corp. and Aventis. In 2004, the company reported having a stable year, but did not release figures. The firm opened an office in Ireland in 2003 and in the U.S. won clients such as MCI and Comcast.

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