Corporate Consolidation

In 2010, the world’s largest advertising and public relations company, WPP, acquired Blue State Digital for an undisclosed sum. With the move, BSD became part of a large, multinational holding company that generates $17 billion in annual revenues and includes more than 350 firms operating in forty-nine countries around the world. The company’s chief executive, Martin Sorrell, built WPP through an aggressive acquisition strategy, turning an obscure UK manufacturer of wire baskets into a global provider of advertising and communications services with marquee holdings that include J. Walter Thompson, Young &

Rubicam, Burson-Marsteller, and Ogilvy & Mather. If it seems strange that Blue State Digital, a firm specializing in campaign services for Democratic candidates, would become part of a global advertising powerhouse, consider that WPP’s holdings include twenty-six firms in the United States alone that specialize in political consulting, polling, and lobbying. These companies, in turn, form part of a worldwide group of fifty-six firms based in seventeen countries that specialize in public affairs, a somewhat vague category of activity that combines corporate public relations with grassroots lobbying techniques designed to mobilize or energize public support on behalf of a client, particularly in regulatory matters or other policy areas that potentially impact the bottom line.35 Because of the skills of its practitioners and the demand for their services, public affairs is an important and growing branch of political work.

In the United States, WPP’s holdings in this field include Benenson Strategy Group (whose founder worked as the lead pollster for President Obama in 2012) and the Dewey Square Group (whose principals include former senior strategists for Kerry in 2004 and Hillary Clinton in 2008). Both firms are expected to provide key personnel for Clinton in her 2016 presidential run.36 Another WPP-owned firm with an impressive Democratic pedigree is the Glover Park Group (founded by the chief strategist for Al Gore’s campaign in 2000 along with two veterans of the Clinton administration).37 On the Republican side, WPP owns the Prime Policy Group, whose chairman, Charlie Black, worked for Presidents Reagan and Bush (I and II) and is an inductee of the American Association of Political Consultants Hall of Fame.38 Another prominent Republican in the WPP fold is Mark McKinnon, who is currently a senior adviser at Hill+Knowlton Strategies (and was formerly the company’s global vice chairman). McKinnon, who served as chief media adviser to George W. Bush in 2000 and 2004, sold the consulting firm he co-owned to WPP in 2006.39 Another valuable asset is Burson-Marsteller, the third-largest public relations firm in the world (in billings), acquired by WPP in 2000 along with its parent firm, advertising giant Young & Rubicam. The current head of Burson-Marsteller is Donald Baer, a former senior adviser and speechwriter in the Clinton Administration. Baer’s predecessor at

Burson-Marsteller was Mark Penn, a fomer pollster for both Clintons who sold his consulting firm to WPP in 2001.40

More recently, the company has sought to position itself in the digital marketplace through various mergers, acquisitions, and strategic partnerships. As noted previously, WPP bought Blue State Digital in 2010. In 2013, Burson-Marsteller tapped BSD cofounder and CEO, Thomas Gensemer, to be its chief strategy officer.41 Meanwhile, in 2011, Burson-Marsteller announced it had entered into a strategic partnership with the Republican firm Targeted Victory, perhaps laying the groundwork for a future acquisition of the leading provider of digital services to the GOP42

The acquisitions by WPP and its subsidiaries point to a corporate consolidation of political work in the United States.43 Unlike an earlier age when public relations firms and advertising agencies struggled to square their commercial interests with the partisan nature of campaigns, today industry consolidation makes it possible to acquire multiple firms whose principals are connected to Democratic or Republican clients. Although WPP is the most aggressive on this front, it is not the only large player in the political consulting marketplace. Omnicom, Publicis, and InterPublic, rivals of WPP for control of the global advertising market, have also been acquiring assets in political consulting, polling, and public affairs.44 For instance, the public relations giant Weber Shandwick, a subsidiary of InterPublic, is itself the product of a merger with the firm started by political consulting pioneer David Sawyer. As James Harding detailed in his book Alpha Dogs, Sawyer built a profitable consulting firm by bringing American-style campaigns to the Philippines, Colombia, and other countries.45 Jack Leslie, who went to work for Sawyer after a stint in Ted Kennedy’s office, eventually became president of the firm and then managed several successful mergers of the company before it was acquired by InterPublic. Today, Leslie is the chairman of Weber Shandwick, currently ranked as the second-largest public relations firm in the world.46 Similarly, the French conglomerate Publicis owns political consulting firm Winner & Associates, whose CEO, Chuck Winner, is a leader in the management of ballot ini- tiatives.47 Finally, Omnicom, through its public relations subsidiary FleishmanHillard, owns the largest Democratic media firm,

GMMB.48 In 2012, GMMB partner and cofounder Jim Margolis served as senior adviser to the Obama re-election effort (a position he also held in 2008), while his firm billed almost $390 million in media services to the campaign.49

What explains the acquisition of these firms and their integration in a broader field of corporate communication and public affairs? In financial terms, political consulting generates paltry revenues compared with advertising agencies and public relations firms. The public may be aghast at the $6 billion spent on the 2012 election, but it is worth remembering that the top 100 advertisers spend more than $100 billion on marketing each year, and Procter & Gamble alone spent $5 billion on advertising in 2012.50 More than the dollar value of consulting services, however, the value of firms that specialize in political work is their ability to provide corporate clients a menu of services that extend beyond the traditional offerings of an advertising agency or public relations firm. The value of campaign techniques is in the capacity to cultivate public support, whether on behalf of a candidate or a corporation. In the case of the latter, consultants can provide a focused, carefully orchestrated campaign designed to improve a company’s public image. In some cases, the same metrics used in politics, such as a candidate’s favorable ratings, can be used to measure the success of a corporate campaign. As Mark Penn put it, writing in the Harvard Business Review, “While politics has always been an avid spectator sport, lately it’s become a field that offers valuable lessons for business.” In particular, Penn advised, “Campaigns and consumer choices share one important thing in common: they are about alternatives, not ideals.”51 Whether working for a candidate or a corporation, the job of the consultant is to make the public prefer the client over a lesser alternative.

Looking back on the history of political work, the application of consulting skills to corporate needs is nothing new. Consultants working in the 1970s and 1980s found that corporate clients paid well and helped firms secure a reliable source of revenue immune from the periodic ups and downs of political campaigns. Looking back even further, political consulting itself grew out of the field of public relations, and we can trace polling directly to scientific advances in market research made during the 1930s and 1940s. The effort to understand, measure, and manipulate political behavior grew out of similar efforts and technologies designed and applied first in the commercial realm.

However, the corporate consolidation of political work also represents a new phase in the way campaign tools are integrated into a broader corporate strategy. As Jack Martin, global chairman and CEO of Hill+Knowlton Strategies, put it, “Our approach ... is called the 5th Seat. The 5th Seat puts us in the [corporate] c-suite of our clients, next to the lawyers, accountants, management consultants, and bankers.” In Martin’s view, his firm offers a valuable skill set that belongs in every boardroom, “not only for interacting with the public but to measure it” as well.52 Enhancing the public image of the corporation or mobilizing public support on its behalf, especially in matters that touch on government policy, is just as important to business growth as law, finance, advertising, or market research. The innovation of WPP and other communications conglomerates is to provide a one-stop shop for all kinds of corporate communication needs. According to WPP chair Martin Sorrell, a single provider is particularly valuable to large, multinational corporations with “a vast geographical spread and a need for a wide range of marketing services.” For these clients, Sorell explains, “WPP can act as a portal to provide a single point of contact and accountability.”53

 
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