Dec 05, 2013 07:33 PM

Closer Look: Recent Scandals Have Thrown PR Industry into Turmoil

(Beijing) – An employee of a public relations company recently complained to me about the difficulties her industry now faces. The confusion was brought on by recent episodes in which reporters were arrested for taking bribes to print stories.

In the first, a reporter named Chen Yongzhou, was detained for publishing stories that damaged a company's reputation. Later, a trio of reporters faced charges they took bribes from PR firms to publish articles.

"Lately, my journalist and PR friends are sharing news about people and companies from these two industries being investigated by police," the PR company employee said. "We don't even know how to operate now."

A PR consultant at a well-established company told me that in the past when she asked journalists to write advertorials all she had to do was transfer money to their bank accounts. Not she is being more circumspect.

"I will bring the money in person just in case anything happens," she said. "This has caused a lot of trouble."

The consultant said it was not clear to her anymore what was right and what was wrong. This caused her to worry she may accidentally break the law.

A senior manager at a PR company has explained a range of scurrilous activity by PR companies and media types.

Some involved surprisingly large amounts of money. For example, certain reporters publish a set amount of articles each month for a client of a PR company and get paid monthly. Transactions routinely exceed 10,000 yuan.

Then there were reporters who tried to blackmail companies with negative stories that had some grain of truth. Other journalists just made up bad news and went about the blackmailing.

Reporters even took money from companies to publish negative reports about competitors.

All of this points a unique form of "public relations" in China.

"In other countries, PR companies usually serve as consultants," the senior manager said. "But in China, PR companies make money by being an intermediary and taking the difference between what they charge their clients and what the media companies charge them. This business model is twisted."

This way of doing business is crying out for change. Both PR firms and their clients need to be clear about what the law allows and what is ethical.

"The PR companies should really be helping their clients deal with a crisis," a senior PR manager at a computer company said. "They should help analyze a crisis and instruct clients on what to and how to apologize if negative stories are exposed."

Media companies cannot be absolved. They need to redefine their business models as well, not to mention update their codes of conduct.

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