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Thursday, March 10, 2011

A Short History of Public Relations in India

Growing Importance, Declining Values

Speech at Communications Unplugged

A TEDX Event

MICA, Ahmedabad, Gujarat

February 26, 2011


Good morning.

Many thanks to the organizers for this opportunity.

I’d like to talk to you this morning about the history of public relations consulting in India.

My perspective is unique.

The firm that I founded in 1987 was the first of its kind in India.

So the history of the business intersects with my own experiences in the business.

Coincidentally, it also is a history of economic liberalization in India.

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Does anyone know how old the business is?

Well, it dates back to biblical times.

The first PR consultant was with Moses, when he led the Jews out of Egypt to escape the Pharaoh’s vicious rule.

Thousands of Jews followed Moses as he led the march to freedom in the “promised land.”

The flight came to a stop at the edge of the Red Sea. With the Pharaoh gaining on, his followers turned to Moses, praying for help.

“Don’t fret,” Moses told them. “I will part the sea and we will simply walk across.”

Everyone was awestruck; religious fervor rose to fever pitch. They hailed Moses as the Messiah. They swore loyalty and fealty and praised the Lord.

Among them was this public relations consultant, who spotted a huge opportunity. He went up to Moses.

“Look chief, if you pull this off, I can get you 10 pages in the Old Testament.”

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By comparison, PR is relatively young in India; but the issues are similar: about right and wrong; ethics and morality.

Let’s take a closer look…

In 1988, when I had just launched IPAN, India’s first PR consulting firm, I was asked by a journalist from The Economic Times to explain the essence of public relations.

I held out two identical pencils. “The one in my left hand is made by Tata; the other by Reliance. Which would you pick?”

Guess which one the journalist picked?

Today, he may have picked neither; then he picked the Tata pencil.

Asked to explain the reason for his choice, the journalist said it was because Tata has a better reputation than Reliance.

Since neither company did much by way of corporate advertising, focusing instead on product advertising, it is clear that Tata did all kinds of things that got noticed and met with public approval.

In advertising parlance, these are known as “below the line” activities.

That, I told the journalist, is the essence of public relations.

The job of a public relations man is to persuade his client to do good things, ensure they get noticed and thus win the public trust.

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One of the 20th century’s foremost public relations men was Mohandas Gandhi. As such he did not have a client but a higher cause.

His “Satyagraha" was a shrewd strategy that attracted media attention: whether he was burning passes in South Africa or making salt in India.

Familiar with the British press, parliament and courts, Gandhi knew instinctively which buttons to push.

He used the press and the courts to stir British Parliament.

Just how sophisticated was this strategy!

Gandhi figured that non-cooperation would force the colonial government to respond with violence and incarceration.

This made the front pages of British newspapers and forced Parliament to act.

In the end, Indian independence came when the differences between Parliament in London and the colonial government in Delhi became irreconcilable.

It’s too bad that India has deified Gandhi. One of the titans of the 20th century is now worshipped when he deserved to be studied.

But I digress…

I want to trace for you the growth of the business since I founded the first PR consulting firm in 1987.

PR consulting started out with a bang.

The company I founded, IPAN, was first off the block.

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One early client was Pepsi that had struggled for more than two years to secure government approval to set up operations in India.

When we arrived on the scene, Pepsi had become the butt of negative stories in the press and questions in Parliament.

Beleaguered, the American company changed partners and roped in Voltas and the Punjab Agro-Industries Corporation.

From January 1988, we went to work, trying to beat back the disinformation spread about the company in the media and in Parliament.

At the time, the soft drinks industry in India was small, dominated by one player, Parle that had 80 percent of the market.

A check with the media and various politicians told us the campaign against Pepsi was orchestrated by Parle.

Our strategy then became not to reply to the negative stories but to show that the entrenched soft drinks lobby was behind the negative publicity.

We also showed that the soft drinks industry in India simply could not meet the demand and that there were huge quality issues.

Then, we highlighted Pepsi’s commitment to Punjab; that they would help farmers build a value-added business of growing potatoes and tomatoes.

Thus, we were able to demonstrate that entry of Pepsi was in the public interest.

We were able to do that once we convinced the press and the parliamentarians that the campaign against Pepsi was simply a market manoeuvre.

It took until September when the government okayed the Pepsi project.

In the flush of victory, many people told me it had to do with my equation with Rajiv Gandhi.

In fact, Voltas had a “resident director,” Anil Shastri, who went on to become the minister of state in the finance ministry.

Neither of us brought up the subject in our interactions with Rajiv.

No, the approval for the Pepsi project did not result from influence peddling.

What we did was change the focus of public debate.

The domestic sector had raised all kinds of from pseudo nationalistic issues.

We said it was just plain commercial rivalry.

We said it often and with great conviction.

Once that message sank in, we were able to tell the Pepsi story and how it would benefit India, Punjab and soft drinks industry.

Today you know how Pepsi has gone on to become a youth icon.

The company has created thousands of direct and indirect jobs, not just in bottling and distribution but also in advertising, pr and other ancillary businesses including the paanwallahs and various others in the “unorganized” sector.

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A year later, there was Citibank. Its local management was charged with introducing the global consumer to India.

At the time, the sector was monopolized by public sector banks that were charged with “social banking.”

There was no sense of consumer banking: no credit cards, no ATMs, no mortgages, and no car loans.

Citibank had applied for licences but was stumped by the government banks and the Reserve Bank.

The idea was to prove to the government that the lobby against foreign banks was sheer ideological bias.

We conducted a survey that showed among the regulatory agencies, there was perceptible bias against Citibank.

Our counsel was to highlight the fact that Citibank that had done business in India since 1902 was very much part of the national agenda.

To this end, we persuaded Citibank to make a strong pro-India statement in response to the US Trade Representative’s decision to name India as an unfair trader under a new law called Super 301.

The bank’s New York public affairs unit submitted an affidavit to the USTR saying their experience was that India is a fair trader.

We gave the story as an exclusive to India’s most credible economics writer.

It made a huge splash and rapidly changed perceptions about Citibank.

In the event, the Indian government gave Citibank permission to set up their consumer operations in India.

The rest is history: what we take for granted now—credit cards, auto loans, mortgages, consumer financing—had their origins in the campaign by Citibank.

Over the years, millions of people in India were empowered: to buy cars, appliances, vacations and homes and also stocks and mutual funds and insurance.

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In 1991, a young English guy came and talked to me about a pie-in-the-sky venture called Satellite Television Asia Region, now known as STAR TV.

Promoted by Richard Li, a twenty-something from Hong Kong, the satellite television venture ran into predictable opposition from the information and broadcasting ministry that had a monopoly on television.

By creating a business opportunity for small and medium enterprises, cable operators and equipment manufacturers, we advised STAR TV to challenge the government monopoly by rallying these newly-minted businesses to support them.

In a final bid to retain its monopoly, the government introduced the confused Cable and Satellite Regulation Act in 1993 with view to curb the threat to its monopoly.

We helped STAR TV rally support from cable operators and equipment manufacturers to fight against the bill’s unreasonable strictures on the cable and satellite business.

Today, there are still many flaws in the cable business, which got taken over by thugs and political goons, and has therefore languished in technological backwaters.

In the event, cable has been surpassed by organized satellite broadcasters. And we have global quality direct-to-home television.

In freeing the television business, STAR TV created thousands of jobs not just in their direct operations but in associated businesses.

Though I must add the boom in television broadcasting is not all to the good.

The news element is beset by shrill incompetence.

The entertainment business has revived all manner of traditional practices that have no place in a modern society.

On the whole, though, it has been good for the country.

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These three case studies were about success in challenging monopolies.

One of the things we prided ourselves on was our involvement at the very cutting edge of change in India.

As India evolved rapidly into a consumer market, we were there.

Pepsi Citibank and STAR TV changed everything.

The Indian citizen, always beset by a scarcity mindset and a make-do culture, now had choice and abundance.

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The next case study is one of which I am very proud.

In 1993, Manmohan Singh, then finance minister, was about to announce a path-breaking budget that dissolved the licence-permit raj.

The previous December, we were retained by the Indian Soaps and Toiletries Manufacturers Association to help their campaign to bring down taxes.

They told us the government was ready to slash taxes on the sector but it was important for ISTMA to handle the “fallout.”

Toiletries and cosmetics were treated as somehow not in sync with tradition.

The sector also was treated derisively by policy makers and their academic fellow travellers.

“You talk about lipstick and perfume when there so many millions in the country who can’t get a square meal.”

This was a typical rejoinder from high-minded mandarins in the bureaucracy and in the academy.

But Singh saw the merit in the ISTMA argument that reduced taxes could help the sector boom and provide jobs and additional revenue from increased sales volumes.

Our effort to handle the “fallout,” began with the prejudice issue; we asking well-known women across the country to sign a petition that said toiletries and cosmetics were in fact a part of the Indian tradition.

On the taxation issue, we made common cause with many economists who showed how lowering rates could boost tax revenues.

Finally, we worked with consumer groups such as Common Cause to highlight how high taxes bred spurious and pilfered products that posed a hazard to consumers.

It was with great satisfaction that on budget day 1993, we found the finance minister had used lines from our petition to announce a huge cut in tax rates on the sector.

Since then, as we all know, the toiletries and cosmetics business boomed.

And the boom energized the beauty sector and made India into a super power, winning back to back titles in the various contests such as Miss World and Miss Universe.

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In recent times, we’ve dealt with the commissioning of the Bandra Worli Sea Link.

You may know that there were several contentious issues that swirled around the project that was built by HCC, a Bombay-based infrastructure company.

One was about delays and cost escalation.

Another was about the sustained opposition from so-called activists.

By positioning the bridge as the icon of 21st century Bombay, we gained support from the media, political leaders and prominent citizens.

Tools included a National Geographic documentary that highlighted the state-of-the-art technology.

Also the bridge was offered as a backdrop to a Times of India promo featuring Amitabh Bachchan.

We also helped the company set up an experience center at the site.

This became a good way to educate media and others about the project.

On June 30 2009, when the project was officially commissioned, political leaders, bureaucrats and prominent citizens literally fell over each other for an invitation to the function.

The Bandra Worli Sea Link is a boon to Bombay’s frazzled commuters and is an indispensable part of the city infrastructure.

It is well on the way to replacing the colonial-era Gateway of India as the icon of 21st-century Bombay.

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In “breaking news,” our most recent project is the Lavasa Hill City that is coming up near Poona.

The first of its kind in independent India, Lavasa is a new-age concept that uses the principles of the “new urbanism” in which urban areas are planned so that people can live, work and play there.

Under assault from Luddite groups and an ambitious union minister, the project is currently stranded.

I can’t tell you much more than that.

Except the Lavasa project has challenged the notion purveyed by various activist groups that all development is bad.

That in fact, development is a carefully considered choice in which growth and environment need to be balanced.

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In the nearly 25 years of its existence, the public relations consulting business has grown in importance.

In the early years, it played mainly an advocacy role, helping international and domestic companies pioneer new businesses in India.

Later, it became an adjunct to corporate marketing departments, focused mainly on media relations.

Now it has assumed a management function, helping newly empowered corporate communications department meet the growing demands for advocacy, media relations, media monitoring, training, cyber PR, government relations, recruitment, and CSR.

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There is however a darker side to our discipline.

And it needs to be addressed squarely else we lose credibility as a 21st century discipline.

As it has grown in importance, professional values and ethics have become somewhat blurred.

This has become painfully evident in recent months.

I refer here to the telecom scam and role played in it by a PR consulting firm and its chief executive.

It is amazing that a single person, with no previous experience in the field, climbed to such dizzy heights using influence peddling techniques.

As such, she was entrusted with the responsibility to manage corporate communications for India’s two largest conglomerates.

It is even more amazing that the heads of both these behemoths heeded the advice of an untrained and inexperienced person.

The 2G scam dented many individual and corporate reputations.

My concern here is to make a clear distinction between the practice of professional public relations and the kind of influence peddling that was revealed in the scam.

We need for the profession to embrace some sort of a pledge like the Hippocratic Oath in which, among other things, the practitioner pledges “first, do no harm.”

Thank You



Copyright Rajiv Desai 2011

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