Interview: Michael Kempner, CEO, MWW Group

Michael Kempner has served as CEO of MWW Group since its founding in 1986. As an IPG (NYSE: IPG) owned shop, it is the 11th largest public relations agency in the U.S.

PRNewser caught up with Kempner this week to get his take on the market for PR services in 2010 — “You can’t hide in this market. You’re either really good or you’re not.” — his work for the Democratic Party — “The president needs to tie all of his programs together into a unified theme.” — and how he would grade Toyota’s crisis communications strategy thus far — “I would grade them a D.”

What’s your take on the market for PR so far in 2010?

I’m actually in a good mood. I felt good about 2009, actually. It wasn’t the easiest year, but the team rallied together. The team proved what I thought they would prove:

It’s easy to be great during good times, but it’s hard to be good during tough times.

You told PRNewser last year, as part of our 2009 Predictions series, “Successful PR firms will look dramatically different in the next few years as the power of traditional print media wanes.” What are some examples of how MWW “looks different” today than it did a few years ago?

I think it’s evolutionary, not revolutionary. Certain practice areas continue to change at a fairly rapid clip. Digital continues to be a critical factor in all of the programs that we run today and I believe it will have deeper resonance going forward. The fact is that as there are less and less print outlets, and as broadcast and cable become even more disperse and there are more and more choices, getting one’s message out will be more and more challenging.

I don’t believe TV is going away and don’t believe print will go away in total. The rush to digital, is a critical piece of that [getting one’s message out.]

At the same time, how you use traditional media is still extremely important in how you reach your core audiences. Today’s Twitter and Facebook will be tomorrow’s something else. I believe social media is very much here to stay, but is Facebook here to stay? It looks that way, but who knows. It doesn’t matter. As long as people understand the value and how to reach stakeholders, that is what’s important.

Some agency heads PRNewser speaks with break out how much of their firm’s revenue is from digital. What percentage of the MWW Group’s revenues would you say are from “digital” work? Or do you even break things down in that manner?

There are two models out there. One is, ‘we have this digital group.’ And we have that too. So there are those revenues being funneled into the digital practice.

And then there’s the even larger pieces where we are using digital media and digital mediums every day of the week in every program we do. Anyone who is breaking out digital to me doesn’t understand digital. Digital is what we do. It’s no longer separate.

Breaking out digital is false way to look at the business. 70% of our programs lead with digital or have a significant digital component. The others have programs that may not be as robust because clients are not embracing digital as quickly as they should.

What verticals do you see as poised for growth in 2010?

I’m robust on all of them right now. Lobbying, public affairs and issues management experienced extensive growth in 2009 and I don’t see it slowing down at all. Anything around digital is explosive. Consumer lifestyle marketing is incredibly robust, as is corporate crisis communications and internal employee communications. One area where I don’t have any sense of certainty is investor relations in relation to the IPO market. It’s still unclear when a significant IPO market will emerge. I’m not negative on IPOs, I just think there is no activity.

IPG’s Constituency Management Group, of which MWW Group is a part of, reported revenue was down approximately 6% year to date in October 2009. What has been your impression of the market for PR services since then?

We have had a very active first six weeks [of 2010] and a very active Q4. This is a time where those firms that work harder and care more will win. You can’t hide in this market. You’re either really good or you’re not.

You’re active within the Democratic party at the state and national level. What do you make of the GOP gubernatorial wins in New Jersey and Virginia, as well as Scott Brown’s recent senatorial win in Massachusetts?

I wouldn’t read too much into the political prognosticators on Fox News. The fact is what you’re seeing here is as an extension of Obama’s win more than any disappointment with Obama. Change is why Obama won and change is effecting both Democrats and Republicans.

Look at Arizona. John McCain is facing challenges from a right winger. It’s not just happening to Democrats, it’s happening to Republicans as well. People are angry and they want to see change. Massachusetts was unique. Martha Coakley was a terrible candidate. If you had a different candidate we’d be having a different conversation today. If Scott Brown votes all Republican, he won’t be voted in again in two years.

In New Jersey, Chris Christie was anti-incumbent. It had nothing to do with President Obama. President Obama remains very popular in New Jersey. It is more about a national movement that swept Barack into power and is now sweeping out incumbents.

Massachusetts was good for the Democratic party. It was a great wake-up call. We sort of tied our own hands with this 60-vote [Senate] margin. Having 59 votes, or maybe even if it goes down a few in the mid-terms, will not be a bad thing for our party or the country.

I am bullish about where the Democratic party will be at the end of 2010 and where Barack Obama will be at the end of 2010. All presidents have difficult first years and this president came into perhaps the most difficult year in American history since the Civil War. Americans are fickle. The media is fickle. It didn’t take a year to create these problems and it won’t take a year to fix them.

You recently wrote on your blog, “Despite a decidedly progressive – and I would suggest laudable – list of policy initiatives, the Obama Presidency seems to be lacking a unifying theme…an organizing principle…an overarching rationale…a stake in the ground.” While “hope and change” were the stake in the ground during the campaign, what do you think should, or could be Obama’s stake in the ground at this point in his Presidency?

I don’t want to be so bold as to tell the President what to do. All people, all politicians, all brands have to stand for something people understand. One of the best columns I ever read on this matter was Thomas Friedman’s column about Obama’s narrative.

The narrative continues to be about change. The president needs to tie all of his programs together into a unified theme. If you really take a look at the programs that he has already implemented, the administration has not taken the time to celebrate victories.

Because the problems they face are so large, they’ve always moved on to other priorities. The fact is they need to spend more time celebrating victories and make sure the American public knows how much they’ve accomplished. They need to tie their accomplishments and overall agenda into an overarching theme.

What do you make of Toyota’s crisis communications efforts around their recall? How would you grade them?

I would grade them a D. I think that Toyota clearly tried to hide the problem. They clearly tried to rest on their laurels of quality and popularity. Toyota has a real problem.

I’m one that believes that they will come out of it, and come out of it strong. They will have to do some — not just PR work — but assure the public that their cars are safe. They will have to do some specific systemic programs in terms of their quality and manufacturing to get the public to come back to their cars.

Audi had a problem in the 1970’s and 80’s and it took them decades to recover. I’m optimistic that people at Toyota are smart enough to resolve this. It’s not just PR and marketing. They have to solve deeper problems first. So far, they did a terrible job.

I was with my 10-year-old watching TV this weekend, and she says, “Dad, you know, we shouldn’t buy a Toyota,” after one of their ads came on. That’s the next generation of drivers.