Commentary by Rance Crain

WHY A BURSON-MASTELLER COULDN'T HAPPEN TODAY

Insights From the Memoir of Harold Burson

By Published on .

Harold Burson, who in 1953 teamed up with ad agency man Bill Marsteller to form public relations firm Burson-Marsteller and built it into the largest PR firm in the world,
Rance Crain, editor in chief, 'Advertising Age'

doesn't think he could duplicate that experience today.

"The public relations business has changed since I was CEO," Harold Burson writes in his personal memoir, E pluribus unum.

"The business environment is harsher, more competitive -- one which most likely would not nurture a repetition of the Burson-Marsteller story," he contends.

Riding high decades ago
PR firms were riding high in the '50s, '60s and '70s, when U.S. corporations expanding overseas needed PR firms to establish their identities in markets where they were often "totally unknown," Harold said. For three decades, Burson-Marsteller and Hill & Knowlton "had minimal big-league competition outside the U.S. (the U.K., Canada and Australia were the exceptions)."

But the good times began to change in the late 1980s when the big ad agencies began to acquire PR firms. The first was in 1978 when Foote Cone & Belding bought Carl Byoir Associates, the third-largest PR shop. In the '60s and '70s nine of the 10 largest ad agencies of the era wanted to buy Burson-Marsteller.

In 1979 when his partner, Bill Marsteller, neared retirement, Harold thought the time was ripe to sell, and "in my mind Young & Rubicam

Harold Burson's new book chronicles the history of Burson-Marsteller.
was at the top of the heap." To up the ante they picked a stalking horse, Ogilvy & Mather, but in the end Y&R got the plum.

Buying frenzy
The news that Y&R acquired Burson-Marsteller set off a buying frenzy: In 1980 J. Walter Thompson grabbed Hill & Knowlton, and barely a decade later nine of the top 10 PR firms were owned by ad agencies or large communications groups. And under new ownership they all began to expand overseas. "The effect of this expansion was quickly intensified competition for new business, with reduced fees often the deciding factor." That and increased competition for upgraded staff resulted in lower profits in most overseas markets, Harold said.

Harold also laments the changed relationship between the client and the PR firm. "When I was CEO the client-agency relationship was based on trust and the close personal association of the client's chief executive officer," but that setup eroded when corporations decentralized and established well-defined profit centers, and each profit center began to choose its own PR firm.

"In our early days," Harold said, "it would have been 'bad form' for a retainer client to seek proposals from other public relations firms for specific proposals."

Early days
After graduating from the University of Mississippi, Harold worked for Memphis' The Commercial Appeal, later took a job with a company he was covering (at double his salary) and in 1944 went into the Army as an enlisted man. As a member of the American Forces Network he covered the Nuremberg Trial of 20 major Nazi war criminals and delivered a 15-minute radio broadcast every night during the five months the court was in session.

Six years before he met Bill Marsteller, he started his own PR firm with former employer H.K. Ferguson Co. as his "bread-and-butter" account. When he took his five-man shop to form Burson-Marsteller, Bill Marsteller got 51% of the new entity, but it was Harold's name that came before the hyphen.

In this article:
Most Popular