Corporate Watch : Hill & Knowlton : Overview

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Hill & Knowlton

A Corporate Profile

By Corporate Watch UK
Completed June 2002


1. The Company

  • Overview
  • Market Share/Importance
  • History
  • Clients


  • “We’d represent Satan, if he paid.” –unnamed Hill and Knowlton Exec, 1991[1]

    1.1 Overview

    The activities of public relations companies have long been recognised as a threat to democracy, providing methods for industry to influence legislators and for governments and industry to covertly manipulate public opinion. PR companies now offer a wide range of services to their clients including lobbying and government relations, as well as more traditional PR services. Some of the newest developments in the industry are the practices of issues and reputation management.

    It is not easy to uncover the truth about PR companies’ activities. Whilst they do their best to manage public perceptions of companies and issues they do their utmost to remain discreetly anonymous themselves, maintaining a culture of secrecy about their activities. The best PR is that which is never perceived as such. They work behind the scenes, providing tailored content for lazy or cash-strapped media outlets, setting up front groups with the appearance of independence to push a message for their clients, or organising artificial campaign groups.

    The industry is presently consolidating with the advertising and consulting industries, vast conglomerates such as WPP Group plc and Omnicom now own and coordinate many of the market leaders in these industries.

    As the first multinational PR company and for a long time the largest in the world, Hill and Knowlton has created and refined many of the key techniques and strategies of public relations. H&K has over the years developed extremely close relations with many branches of government in the USA and around the world.

    H&K fell from the world number one spot in the early nineties when it became embroiled in a series of scandals and internal conflicts. In recent years, under the leadership of CEO, Howard Paster, it has shown strong growth and has re-emerged as one of the industry leaders.




    1.2 Market Share/Importance

    H&K’s 2000 revenues totalled $306m, with $177m earned in the USA, giving it the third highest revenues for 2000 behind Fleischmann Hillard, and Weber-Shandwick Worldwide[2].
    Whilst it maintains long-term relationships with many major corporate clients, H&K is also one of the first choices for companies in need of crisis management.




    1.3 History[3]

    After an 18-year career as a reporter, editor, and financial columnist, John W. Hill founded his public relations company in 1927 in Cleveland, Ohio. His early clients were banks, steel manufacturers, and other industrial companies in the Midwest. Hill, managed the firm until 1962, and remained active in it until shortly before his death in New York City in 1977.

    During the Depression, Hill entered into a partnership with Donald Knowlton, previously the PR director of a client’s bank. The firm's headquarters moved to New York in 1934, to be closer to its client the American Iron and Steel Institute, while Knowlton stayed in Ohio and operated Hill and Knowlton of Cleveland.

    Despite the Depression, Hill and Knowlton grew rapidly and the firm's business continued to expand through the 1940s attracting major corporate clients including leaders in the steel, aircraft manufacturing, petroleum and shipbuilding industries.

    Hill and Knowlton was the first American public relations consultancy to establish itself in the newly formed European Economic Community. In 1952 Hill and Knowlton began to assemble a network of affiliates across Europe and by the middle of the decade had become the first American public relations firm to have wholly-owned offices in Europe. John Hill had realised that the growing multinationalism in many business sectors opened up a market for a multinational company.

    H&K was the original multinational PR company, an audacious business move closely followed by Burson-Marsteller, and it brought huge new revenues. Throughout the 1980s and early 90s the two companies played leapfrog for the world number one spot.

    The second major innovation in PR practice pioneered by H&K was to offer both PR and lobbying services. By the early 1960s lobbying had developed a very seedy reputation and John Hill had a very low opinion of the practice. This was to change however, with his appointment of President Eisenhower’s former Press Secretary, Robert Keith Gray, to the Washington DC office, in 1961. During the 1950s the DC office had only three staff. Gray, a man of tremendous political experience and ambition, persuaded Hill to let him conduct lobbying operations, and soon began to pull in a great deal of new work [see below], and by the mid-70s the hugely profitable Washington office employed 30 people[4]. This was the first ever fusion of lobbying and PR services, a move that other major PR companies have since followed, and one that has arguably changed the nature of politics in the USA and the rest of the world. Joseph Goulden commented in The Washingtonian in 1974, “Nothing quite like Hill and Knowlton exists anywhere else in the city’s lawyer-government-lobbyist establishments. What H&K sells… is manipulation of the governmental process – in Congress, the regulatory agencies, the executive departments”

    In July 1980, J Walter Thompson, the advertising agency, bought H&K. In 1987, the communications conglomerate WPP Group in turn, acquired JWT.

    H&K’s acquisition by the WPP Group brought many changes to its existing culture. John Hill had a reputation for sticking to his (highly conservative and business friendly) principles and refusing jobs of which he did not approve. However, as part of the debt-laden WPP Group and under the leadership of new CEO Robert Dilenschneider, profitability became the paramount concern. A string of controversial accounts such as that for the National Conference of Bishops and the Church of Scientology [see below] caused considerable internal dispute within H&K leading to resignations and a tarnishing of its image. As a result of these troubles, H&K began to lose business and revenue in the early nineties, particularly in the USA. Under new management structures it has now largely recovered from these difficulties[5].

    As a member of the WPP group [www.wpp.com], Hill and Knowlton now participates within “a comprehensive and, when appropriate, integrated range of advertising and marketing services to national, multinational and global clients.” Which is to say that H&K’s expertise in lobbying and PR can now be coordinated with that of other leading PR companies such as Cohn & Wolfe or their old rivals Burson-Marsteller, and with marketing, advertising and business consultancy companies[6].




    1.4 Clients




    American Iron and Steel Institute,
    American Paper Institute,
    American Petroleum Institute,
    Ashland Oil,
    Boeing,
    Chem Waste,
    Du Pont,
    Hoechst Celanese Corp,
    IBM,
    Johnson & Johnson,
    Louisiana-Pacific,
    Marathon Oil,
    Monsanto,
    Nuclear Electric,
    Olin Corporation,
    Pepsi Cola,
    Phillip Morris,
    Proctor & Gamble,
    Sandoz and Ciba-Geigy (now merged to form Novartis),
    Smithkline Beecham,
    Unocal,
    Wellcome,
    Weyerhauser and Woolworths[7].
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    02wireless Solutions,

    Alfa Bank,
    Allstate,
    AnnuityScout,
    Archipelago,
    Ariba,
    Australia Innovonics,
    Automated Power Exchange Inc,
    BT,
    BeauLieu Vineyard,
    Beintornet.com plc,
    Brokat Technologies,
    Buy.com,
    Cap Gemini Ernst & Young,
    Cement Assn. of Canada Exchange Inc,
    Clarent Corp,
    Clariti Telecomms. Int'l,
    Compaq Computer Corp.,
    Crueel N.V,
    DFDS Tor Lino,
    DHL,
    E*Trade,
    EgyptAir,
    Energy Star,
    Envision,
    Epiphany,
    EqualFooting.com,
    Ernst & Young,
    Facility Information Systems,
    FlightTime,
    Gamebay.com,
    Houston Energy Expo,
    HQ Global Workplaces,
    InfoCruiser,
    Inforte Corp.,
    Intel,
    Loral CyberStar,
    Managed Objects,
    Microsoft,
    Motient Corp.,
    Motorola,
    Notara,
    Novell,
    PIMCO,
    Politec,
    Pre-Cell Solutions,
    Repticon Electronics,
    Sankyo Pharma GmbH,
    Sharper Image Corp,
    Sonera,
    Smart Trust ltd,
    Sorrento Networks,
    SSH, Communications Security,
    Staples, Inc.,
    State of Utah,
    Sunlaw Energy,
    TaylorMade-adidas Golf,
    The Italian Trade Commission,
    TheraSense,
    TiVO,
    U.S. Mint,
    Vocus,
    Xenogen Corp.,
    Ztango[8].

    References

    [1] Mundy A, “Is the Press Any Match for Powerhouse PR?” Columbia Journalism Review Sep/Oct 92, www.cjr.org/year/92/5/pr.asp, date viewed 12-6-2002

    [2] Council of PR Firms Top 50 Worldwide and US and Worldwide Ranking for 2000, www.odwyerpr.com/pr_firm_rankings/council_top50.htm

    [3] Information mostly from H&K’s web site ‘company history’ section except where refernced www.hillandknowlton.com/index.php?section1=company&section2=history, date viewed 8-5-2002

    [4] Trento S, 1992, ‘The Power House: Robert Keith Gray and the Selling of Access and Influence in Washington’, pp 61-77

    [5] Holmes Report, www.holmesreport.com/holmestemp/story.cfm?edit_id=730&type_id=3 date viewed 3-5-2002

    [6] H&K web site, www.hillandknowlton.com/index.php?section1=company&section2=history, date viewed 3-5-2002

    [7] Rowell A, 1996, ‘Green Backlash: Global Subversion of the Environment Movement’, p 121

    [8] O’Dwyers Directory of PR Firms, www.odwyerpr.com/pr_firms_database/prdh09b.htm, date viewed 10-5-2002