Why has this business become such a major industry?

1. Financial public relations is often wrongly described as a new Industry. In fact, it has certainly been around since the days of the South Sea Company, the famous financial ‘bubble’ which collapsed so spectacularly in 1720, ruining thousands and causing a political crisis. Anyone interested in studying the way that overactive public relations and hype can lose a lot of ordinary people a lot of money should study this eighteenth-century example that has now entered the language. It is interesting to speculate whether modern ‘South Sea Bubbles’ such as Polly Peck or Maxwell are still scandalous and familiar names in 250 years’ time.

2. Financial public relations may not be new, but it has changed dramatically since the City itself changed dramatically in the mid-1980s. The electronic screen replaced the market floor and small, privately owned firms became absorbed into international banking groups. This process was memorably, but inaccurately called the Big Bang. The deregulation and opening up of financial markets, which has been happening all around the world, has certainly involved rapid growth in stock markets, not to mention salaries and bonuses. The ‘Big Bang’ was not the birth of the financial public relations industry, but could be described as the beginning of its rapid growth, ‘adolescent’ phase.

3. Financial public relations activity in the City has experienced significant growth over the last decade, not least in the numbers of financial public relations consultancies: the great figures of City and commerce have always recognized the need to establish a strong corporate image and communicate with the market. Other factors that have contributed to the growth of specialist financial market public relations have included the changing structure and internationalization of trade and industry generally, and in particular, the technological developments that have led to a communication revolution that manifests itself in everything from local cable television to the world-wide information super-highway.

4. If there is an area that is still being neglected by those claiming to be the experts in financial public relations, it is the growing effect on public relations of the communications revolution. We talk about objectives, messages and audiences at a time when the technologists devise ever more subtle and easy ways of delivering customized messages to anyone anywhere in the globe. Whether all this will enhance or dilute the importance of a comment piece in the Financial Times is a matter for debate.

5. The much talked about Internet is just one example of a new method of communication of which many organizations are already taking advantage. Many companies now have their own web-site, and are providing a whole range of financial and corporate information for the world-wide web, in addition to consumer and product information. The secret of media success in the future may well be to avoid the pitfalls of allowing the medium to dominate the message.