Blogi | 6.8.2018

The PR industry is being corrupted in Hungary

Tapio Nurminen‘s article (Kauppalehti, June 8, 2018) described the corruption allowed by the government of Hungary in the construction industry. According to Nurminen’s headline, Prime Minister Viktor Orban‘s oligarchs are groping public contracts for themselves.

The same development is taking place in the communications industry. In June 2018, members of the International Communications Agency ICCO from 20 countries met in Budapest. We heard Krisztian Szabados, Director of the Flow PR agency and the representative of Edelman chain in Hungary. He told how the media have been subjected to government propaganda mediators and independent communications companies are in major difficulties.

Orbán’s Fidesz party rose to power in 2010 and nationalised immediately the Hungarian news agency. Since then, oligarchs taken over the second largest TV channel in the country, all 18 regional newspapers, the largest online news portal, and almost all radio stations. Additionally, they have purchased two national newspapers only to close them down. These acquisitions are made with government loans, and the buyers rarely have any experience in the industry. According to Szabados, there is only one independent TV channel left.

The remaining independent media are pressed with new taxes and growing competition from the oligarchs’ tabloid magazines and entertainment publications. As for advertising revenue, the state is the largest advertiser in Hungary. Szabados estimates it has a 15 to 20% share, and all this money goes to media close to the government.

PR consultancies are feeling the heat as well. Orban’s friends have established communications agencies that seem to be winning all state tenders, even though they charges are substantially higher. Szabados described these “darling agencies” as the government’s official PR agencies play a role in distorting communication and participating in bribery of civil servants. Overpricing enables them to pay high salaries and attract staff from independent agencies.

The effects of corruption also extend to the work of communications agencies. The media do not want to publish campaigns that point to unpleasant truths from Hungary. For example, Flow PR had planned a road safety campaign for a large insurance company. In the campaign, motorists would be rewarded for announcing potholes in street asphalt. The nationwide campaign had to be canceled at the last minute because the radio station that would have been the main distributor, withdrew. They had been informed by the state administration that “Hungary has no holes in the asphalt”.

Krisztian Szabados’s views were confirmed by Ms Zsofia Lakatos and Mr Andras Sztaniszlav from the Hungarian Communications Offices Association (HUPRA).

Finnish companies operating in Hungary must be advised to avoid these government’s favorite communications agencies and place their advertising in channels and publications that are not controlled by the government. Information about independent communications agencies and media is available from HUPRA (Magyar Public Relations Association).

Alpo Räinä

The article was published in Kauppalehti business daily on 16.7.2018.