Local market learns to love lobbying

Laura Florea, managing partner at Point Public Affairs, took her first foray into the world of public affairs in 1995. At that time, the concept was just beginning to become established. Fourteen years later, the Romanian public affairs market is still emerging and needs five-seven years to close the gap with other more developed markets, predicts the partner.

Anda Dragan

How has the Romanian public affairs market changed since you entered it?

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The Romanian public affairs market, as a self-contained one, has slowly evolved since 1995. Companies, NGOs, civil society and social partners have rolled out more or less public affairs and lobby activities during this time, but without using those terms. Specialized public affairs agencies came into existence later on.

I started my career in public affairs in a specialized agency that was the first player on the market and, for a long time, the only one. But the local public affairs market has really begun to emerge in the last three-four years and more significantly since Romania’s EU accession. Romanian institutions’ need to interact with European ones and other players’ intention to enter onto the local market were among the main reasons for the development of the local sector.

How would you characterize the market?

There is no doubt that it is an emerging one, and there is plenty of space for future development. Poland, Hungary and the Czech Republic have more developed markets than ours. There are only five-six specialized public affairs agencies in Romania, and they are still small. But I think that the gap between Romania and other countries will be closed in the next five-seven years, owing to Europe’s tangible and significant interest in Romania and the country’s size (it is ranked seventh in Europe for population and area).

What is the value of the local public affairs market?

The Romanian lobbying and public affairs market was worth about EUR 50-70 million last year, according to our estimations. This figure includes public affairs and lobby agencies’ turnovers, sums resulting from public affairs activities conducted by some PR agencies, companies’ costs for public affairs activities and lawyers’ returns generated by such projects. Turnovers of specialized agencies represent just a small percentage of this total. Besides, we also took into consideration the 50 biggest companies in Romania that carried out public affairs activities and budgeted for them in their financial reports.

What kind of customers do you have?

Our customer portfolio includes companies, business and professional associations, and NGOs – all those stakeholders that need or intend to lobby for public policies and want to intervene with public authorities or to promote their cause to them.

How would you characterize public affairs as a business model? Do companies need more help from public affairs agencies now than ever?

Companies need lobbying rather than public affairs services. As a business, I haven’t seen a larger development this year than in 2008. Besides, our agency has only been active on the market for two years, so it is to be expected that we would post a growth in activity in 2009.

Is a public affairs company more difficult to run than other businesses that focus on providing professional services?

I think that a public affairs business is the most difficult one in the professional services businesses category, because it is multidisciplinary. We need expertise in communication, law, political analysis and sociology. It is hard to find all of these skills and put them together. Plus, we have to be creative no matter how arid this field is.

How profitable is such a company on the local market?

As long as you are good and get customers, your business will be profitable. But it is hard to attract new customers in such a context. The market is underdeveloped; people are wary of this activity and think they have expertise in everything. Besides, not all multinationals active in Romania have their own public affairs corporate culture. But the services sector is more profitable than other ones, such as manufacturing, for example.

What added value do public affairs agencies bring to a company?

Analysis and research are the essential base of our activity. We monitor in a specialized way the draft laws and conduct political analyses, which is the first added value. As for lobbying, it is evident that it is hard for a company to makes it voice heard in the business community. Lobbying refers to a whole industry interest rather than to a single company one and it is conducted through business organizations and professional associations. The agency’s role is to lobby, supported by professional and specific mechanisms. Companies may run public affairs activities internally, but it is more expensive than to outsource it to a specialized agency.

What is the difference between public affairs and lobbying?

Public affairs is about promoting the interests of an industry to the public authorities, while lobbying is more specialized and refers both to influencing public policies and legislative changes.

What are the most common mistakes in lobbying?

The first and most common mistake is not to monitor the legislative activity of state authorities such as parliament, government, ministries and European institutions. If they don’t do this, companies are over a barrel and have no idea what happened. Many people think that daily monitoring is a waste of time. Another frequent mistake is if an organization says from the very beginning: “No! We don’t want this, we don’t agree with it and we’re kicking up a row!” No one will succeed that way. You have to come up with a solution instead. Last but not least, many people currently don’t bone up on an issue.