Burson-Marsteller : Overview

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A Corporate Profile

By Corporate Watch UK
Completed July 2002

1. The Company

  • 1.1 Overview
  • 1.2 Market Share/Importance
  • 1.3 History
  • 1.4 Products & services
  • 1.5 Clients

  • 1.1 Overview

    Burson-Marsteller (B-M) is one of the largest public relations (PR) agencies in the world and also the most reviled due to its mercenary attitude in choosing clients and contracts, and its frequent run ins with activists for environmental and other progressive causes. When helping its industry clients to escape environmental legislation or sprucing up the image of some of the most repressive governments on Earth, B-M brings to bear state of the art techniques in manipulating the mass media, legislators and public opinion.

    In spite of B-M’s claims that the best way to deal with problems is to put one’s own house in order, the usual effect of PR is to maintain the status quo. By manipulating public opinion PR diverts attention away from difficult issues and creates the illusion of change so that a company or government can go about business as usual without having to worry about its reputation. By lobbying government and creating Astroturf campaigns PR helps to maintain a legislative environment on which industry can avoid real change

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    1.2 Market-Share/Importance

    Whilst in recent years Burson-Marsteller slipped back from the number one spot it remains one of the largest PR firms in the world, and with recent restructuring looks set for strong growth in the coming years. Since 1979 the company has been a part of the Young & Rubicam Inc. advertising conglomerate, which in turn was acquired by WPP Group plc[1], the global communications services company, in October 2000. Its revenues for 2000 totalled $175m in the US and $303m worldwide, the highest in its history.

    Today Burson-Marsteller employs 2,000 people in more than 60 offices in 35 countries around the world. That gives it a more international presence than any other agency, which is both an advantage (the firm is still the first choice for clients looking for genuine global reach) and a disadvantage.

    B-M’s reliance on international business makes it vulnerable to economic downturns or under-performing offices, as well as currency fluctuations. In recent years the Asian market was under-performing, then Europe, which was flat last in 1999. But B-M Europe has now moved back to a geographic structure-a reversal of the practice area commitment the agency made five years ago-more suited to local conditions, and that should spur growth. Meanwhile, the firm is picking up high-profile wins in Asia, like the Hong Kong government's economic development program, and expanding in Latin America, where it has a strong e-commerce practice.

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    1.3 History[2]

    Founded in 1953 by Harold Burson, a freelance PR man and Jim Marsteller, owner of Marsteller Advertising, Burson-Marsteller has grown to become one of the largest PR agencies in the world and a market leader in all of the major areas of PR services.

    Harold Burson’s original vision for the new company was to model it on Hill & Knowlton then the clear leader in the PR sector. He quickly took the company into new fields of PR wanting to diversify into new fields from his original speciality in business-to-business communications. B-M quickly set up offices across the USA and began to pursue larger and more prestigious clients. By 1959 revenues had reached nearly half a million dollars.

    Although not yet a top tier PR firm, B-M took the gamble of moving into the European marketplace in the 1960s, a move that only Hill & Knowlton had previously taken. B-M established offices in London and Paris as well in Washington DC, and Los Angeles during the sixties.

    Throughout the 1970s B-M continued to expand. In 1970 it entered the field of consumer public relations with its acquisition of Theodore R. Sills Inc. And it opened further offices in Frankfurt, Hong Kong, Singapore, Kuala Lumpur, Sao Paolo, Bahrain and in Russia. In 1979 B-M was acquired by the Young & Rubicam group of companies, and could thus begin to integrate its services with a family of other companies practising PR, lobbying and advertising.

    In 1983 B-M’s revenues exceeded those of Hill & Knowlton and in 1985 it was the first PR company to earn $100m in a year. The company’s expansion was relentless and yet more offices opened across the United states and around the world.

    After years as the premier public relations agency, a position that became unquestionable after H&K’s partial collapse in the early nineties, B-M saw its leadership position erode throughout the ‘90s, thanks to internal problems and the fact that several other agencies improved dramatically over the same period. With recent restructuring however it has shown string growth and in 2000 earned $303m placing it fourth in the league table of global PR firms[3].

    In 2000 Young & Rubicam was itself acquired by the WPP Group. So now Burson-Marsteller works in an even larger family of companies including its old rival Hill& Knowlton

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    1.4 Products/Services[4]

    B-M offers the full range of PR services including government relations, crisis management, issues and reputation management, brand building, product marketing, and communications training, to name a few of the twenty services listed on its web-site. These services are delivered by seven ‘practice’ areas within the company: advertising/creative, brand marketing, corporate/financial, healthcare, media, public affairs and technology. [See below for details]

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    1.5 Clients

    Some of B-M’s current clients include:

    3Com Corp., Accenture Technology Ventures, Alcatel, Applause LLC, Avanade Inc., Boeing, Harris Interactive, Hire.com, HotJobs.com Ltd., ICN Pharmaceuticals, IdeaEDGE Ventures, Ihalal, Lord, Abbett & Co., M7 Networks, McDonald's, New World Network, OnlineNIC.com, Inc., PC On Call, Peregrine Systems, Inc., Qualcomm CDMA Technologiesm, R.R. Donnelley & Sons Co., Sony Electronics Inc., Sulzer Orthopedics, Sun Microsystems Inc., Switch and Data, Teresa Earnhardt, Texas Electric Choice, Thayer Hotel Investors, TrueLink, Unicredito, University of North Carolina, UNX, Verizon[5]

    The following have been clients of B-M and may still be (Burson-Marsteller no longer publishes lists of its clients):

    ARCO, British Gas, Boots, BP Chemicals, British Nuclear Fuels, Cadbury Schweppes, Chevron, Ciba-Geigy and Sandoz (now Novartis), Citicorp, Coca-Cola, Dow Chemical, Deutsche Telecom, Eli Lilly, Fisons, Ford, Gallaghers, General Electric, Glaxo, Grand Metropolitan, Hoescht Roussel, Hydro-Quebec, IBM, ICI, Johnson &Johnson, Johnson Matthey, McDonalds, McDonnell-Douglas, Nutra Sweet, Ontario Hydro, Perrier, Phillip Morris, Pioneer, Proctor and Gamble, Quaker Oats, Repsol, Rhone-Poulenc-Rorer, Sainsburys, Scott Paper, Shell Oil, SmithKline Beecham, Tetra Pak, Unilever, Warner Lambert and Zeneca[6]
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    [1] www.wpp.com www.wpp.com/>, date viewed 3-5-2002

    [2] B-M’s web site, www.bm.com/overview/history.html www.bm.com/overview/history.html>, date viewed 3-5-2002

    [3] Holmes Report, www.holmesreport.com/holmestemp/story.cfm?edit_id=739&type_id=3 www.holmesreport.com/holmestemp/story.cfm?edit_id=739&type_id=3>, date viewed 20-6-2002

    [4] www.bm.com/overview/practice.html>, date viewed 3-5-2002

    [5] O’Dwyers Directory of PR Firms, www.odwyerpr.com/pr_firms_database/prdb21.htm>, date viewed 20-6-2002

    [6] Rowell A, 1996, ‘Green Backlash: Global subversion of the Environment Movement’ p114