State agencies spend millions on outside support from marketing, PR firms

Jean J. Sanders

Public relations companies have found a lucrative customer base among state agencies in recent years as many have signed off on millions of dollars in contract work for everything from website design to brand management.

Since 2019, state agencies have spent more than $99 million on public relations and marketing work from outside companies, according to state financial records.

The Oklahoman reviewed more than 60 contracts to learn more about the type of work public relations firms are doing for state agencies, utilizing records from the state Office of Management and Enterprise Services showing payouts from all state agencies and higher education institutions to 16 Oklahoma-based public relations, advertising and branding agencies.

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State agencies have paid Oklahoma City-based public relations firm Saxum $15.5 million in contract work over the last three years, including more than $1.8 million from the Oklahoma Health Department to help with press communications, social media, digital consulting and other services during the COVID-19 pandemic.

OK_PR_spending2

OK_PR_spending2

Although the Health Department has ended its contract with Saxum for pandemic-related communications and messaging about the state’s public health lab, the firm is still working for the agency on advertising and marketing for a federally funded grant program that provides free COVID-19 testing in schools.

Saxum’s contract with the Health Department has drawn some criticism as its founder, Renzi Stone, has twice contributed the maximum donations to Gov. Kevin Stitt’s political campaigns. But he’s not the only public relations executive at a company with state contracts to have contributed to Stitt’s political campaigns.

Brenda Jones Barwick, founder and CEO of Jones PR, has twice contributed the maximum allowed and Brent Gooden, of The Gooden Group, contributed $500 in 2018.

Barwick said campaign contributions don’t influence who gets state contracts, as those are typically awarded through an apolitical and uniform public bidding process.

“The departments are all independent agencies, and it has nothing to do with the fair, open, competitive bid process put in place by the state,” she said.

The Saxum contract also raised questions about whether it violated an executive order Stitt issued in 2019 that banned state agencies from hiring outside lobbyists. Saxum’s contract with the Health Department includes the “Development and implementation of a communications strategy around OSDH legislative priorities leading up to and during the 2022 session.”

Asked if the contract violated Stitt’s executive order, the governor’s office said it was a legal contract.

“Our office reviewed the contract and it does not violate the governor’s executive orders,” said Charlie Hannema, spokesperson for Stitt.

Saxum said its work for the Health Department, or any other state agency, does not include legislative advocacy.

“Saxum does not lobby, period,” said Debbie Schramm, Saxum CEO. “We have taken intentional steps based on legal counsel to make sure we do not lobby.”

Schramm said Saxum also holds annual training sessions with staff prior to the legislative session to go over the company’s no-lobbying policy.

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“We do work with clients who have lobbyists, and provide communications support to clients who can or do lobby on behalf of their company or industry, including content creation (fact sheets, etc.), meeting scheduling, bill tracking and other support services that are not lobbying,” Schramm said.

State agencies say PR firms can increase their manpower

On the brink of expanding Medicaid, the Oklahoma Health Care Authority hired Oklahoma City firm Ghost to help craft consistent messaging for the expansion and to carry out a statewide media buy.

Ghost, Inc., which has been paid $4.6 million in state agency contracts since 2019, helped with a four-month advertising campaign that included targeted television commercials and radio, digital and newspaper advertisements to promote Medicaid expansion. The campaign that cost $500,000, half of which was covered by federal funds, garnered more than 3.6 million digital impressions, said Health Care Authority spokeswoman Melissa Richey.

She said the campaign was successful, noting that during the first four months of expansion, Oklahoma enrolled 118,067 new Medicaid recipients.

While some agencies sporadically hire outside communications experts, contractors are a constant at others.

The Oklahoma Tourism and Recreation Department has worked with local advertising agencies for 30 years to try and attract more visitors and to entice locals to take advantage of all that the state has to offer.

Since 2015, the Tourism and Recreation Department has outsourced its creative work to VI Marketing and Branding of Oklahoma City.

In recent years, the branding agency also worked for the Department of Public Safety, Tobacco Settlement Endowment Trust, the health department, Statewide Virtual Charter School Board and at least two institutions of higher education, earning more than $70 million in state contract work.

One of the most notable examples of a state agency using outside creative was when the Tourism and Recreation Department paid advertising firm Staplegun $1,350 in 2017 to design Oklahoma’s new license plate. Initially, the agency turned to VI to design the new plate, but the second company was brought in when state officials couldn’t come to a consensus on the initial designs.

The Tourism and Recreation Department has hired VI to do creative work, ad buying and commercial production. VI gets discounted air time because it buys commercial slots in bulk for multiple clients, said Tourism and Recreation spokesman David White.

Agency employees take photos and write copy for the state agency’s numerous travel brochures and guides, but VI helps with the design and layout, White said.

Working with the branding agency essentially doubles the Tourism and Recreation Department’s manpower, he said.

“We’re proud of the work and the partnership we have with them,” White said.

The Tourism and Recreation Department has a dedicated revolving fund for advertising and promotional materials. Currently, the agency gets $5 million annually in sales taxes and $750,000 in state use taxes.

In fiscal year 2021, the agency used that money to distribute more than 1.2 million travel guides and pay for the three television campaigns, 43 billboards, 59 print advertisements and 28 digital campaigns.

Sen. Bill Colemen, R-Ponca City, has introduced legislation this session to gradually increase to $7.5 million the annual sales tax apportionment for the Tourism Promotion Revolving Fund.

Advertising is an integral part of the Tourism and Recreation Department’s work, White said.

“Our mission is to advertise and invite people to come to Oklahoma,” he said.

VI does similar work for TSET, which has contracted with the company since 2007 for media buying, video production and social media work to publicize state initiatives to promote tobacco cessation and healthy living, including the Oklahoma Tobacco Helpline and Tobacco Stops with Me programs.

The marketing contract is put out for public bid every six years, said TSET spokesman Thomas Larson.

Big Tobacco spends $1 million an hour on marketing across the U.S. with roughly $137 million specifically targeting Oklahomans each year, he said.

“Counter-marketing campaigns are among the most powerful tools for preventing smoking initiation, promoting and facilitating cessation, and changing social norms related to tobacco use,” Larson said.

Lack of PR expertise leaves some agencies ‘like a deer in the headlights’

State agencies hiring outside marketing and public relations support is not a new trend although it may be exacerbated by state budget deficits that have slimmed down government across the board, said Rep. Meloyde Blancett, who runs her own marketing and public relations consulting firm.

When Blancett, D-Tulsa, worked at the Department of Commerce from 2003 to 2005, the agency was able to handle most marketing and public relations in-house. But the agency would often hire outside help for specialized needs, such as web development and graphic design, she said.

Blancett

Blancett

She also recalls the agency hired a newly formed marketing firm to help design materials to try and recruit Boeing to expand its operations in Oklahoma.

The Department of Commerce still hires some outside marketing support, and has spent about $1.5 million on such services since 2019.

Last year, the agency, on behalf of Lt. Gov. Matt Pinnell’s office, agreed to pay Freestyle Productions LLC $850,000 to implement the state’s new “Imagine That” brand by building a website to sell branded products, designing new artwork to be displayed at state agency offices and heightening brand awareness through targeted media placement.

With a mix of funding from public and private sources, the state previously paid a Canadian company to help with the development of the new brand.

State agencies often turn to outside marketing companies in crisis situations or when they’re feeling external pressure, Blancett said.

“Sometimes in state government, certain functions are not viewed as critical,” she said. “I would say, probably, the skill of marketing and external communications is sometimes put into that category, and not really used strategically. So, when something does come up, you’re caught, like a deer in the headlights.”

That can lead agencies to hire big-name PR and marketing companies that can be expensive, she said.

Some former state officials leading firms with contracts

Some public relations firms are led by former state employees, including Pliris Strategies (now operating under the company of Pinkston), which was founded by Donelle Harder, a former senior adviser and current campaign manager for Gov. Kevin Stitt.

After starting her company, Harder earned at least $25,000 from OMES for consulting on management and distribution of the state’s CARES Act funds and $81,901 from the Statewide Virtual Charter School Board, according to records obtained by The Oklahoman. The Tulsa World previously reported the Health Department paid Harder $27,500 for communications support early on in the COVID-19 pandemic.

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Harder has since ended all of the contracts.

“I am proud of my team for stepping up to the plate with competitive rates to deliver crisis communications, strategic messaging support and digital media management for the State during an unexpected pandemic while we were also focused on building our client base in the private sector as originally intended,” she said in a statement.

Upon being asked to return to the governor’s campaign, Harder said she decided that during the 2022 election cycle her company would not bid on any state agency contracts for agencies that report directly to the executive branch.

Legislation from Rep. Collin Walke, D-Oklahoma City, would prohibit individuals or entities that represent a state official, a campaign for state office or an initiative petition campaign from getting state contracts.

Walke said he has concerns about people involved in political campaigns also getting state contracts.

Walke

Walke

“What we’re starting to see is people who help on campaigns, run campaigns and once the person wins, they start getting state contracts,” Walke said. “That may be appropriate, that may be inappropriate, we don’t know.

“The question is, are they the best person for the job? That’s what this bill aims to do, is to make sure we have the right people in the job.”

Walke’s House Bill 2531 is identical to legislation House Speaker Charles McCall, R-Atoka, filed last year.

Outreach is a core part of some agency’s work

Some state agencies have hired outside marketing firms for the first time in their history, including the State Election Board, which has a $150,000 contract with VI Marketing and Branding. The contract says VI will help the agency with several voter education projects, including voter registration, absentee voting, and utilizing the State Election Board and county election boards as the trusted sources for election information.

Asked if the contract was in response to recent claims of voter fraud by some politicians, agency officials said that was not the objective.

“There are concerns about misinformation — from claims that laws prohibiting ballot harvesting or requiring voter identification are ‘voter suppression,’ to claims of widespread ‘election fraud’ in 2020,” said Paul Ziriax, secretary of the State Election Board. “However, combating misinformation is not the focus of the State Election Board’s contract with VI. The focus will be on educating voters about things like new precincts as a result of redistricting, voting procedures, and election security.”

Some agencies say public outreach is such a core part of their work that contracting with outside marketing firms is a necessity.

The State Treasurer is required by law to publish notices in local newspapers seeking the owners of abandoned property. The agency has a contract with Ackerman McQueen for $60,000 that includes internet, television advertising and newspaper advertising, some of which have appeared in The Oklahoman.

“All funding for the programs comes from the unclaimed property fund, which consists of remitted abandoned property. No taxpayer funds are used,” said Tim Allen, deputy treasurer for communications and program administration for the Treasurer’s office.

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The Commissioners of the Land agency has paid Staplegun more than $15,000 since 2019 for a variety of services ranging from video production to updating the names of commissioners on agency letterhead.

Last year, the Oklahoma Department of Veterans Affairs hired Jones PR for complete branding services, including an agency logo, flyers, vehicles wraps and tradeshow booth banners.

Officials for state agencies and marketing firms say part of the need for contract work is that state budget cuts over the last several years have resulted in depleted staff numbers in public information and marketing departments at various state agencies.

The COVID pandemic also created a need for quick crisis communication.

“We are incredibly proud of the work we do for the state of Oklahoma, and have especially been proud of the work we have been able to do for various state agencies dealing with unprecedented issues brought on by the COVID-19 pandemic,” said Schramm, CEO at Saxum. “We added temporary capacity to internal communications teams who were overwhelmed by the volume of media requests during COVID, and we are confident our work helped get more information out to the public in a timely fashion under trying circumstances for state government and reporters alike.”

This story is provided in part through a grant by the Kirkpatrick Foundation. To support work like this, please consider purchasing a digital subscription today at https://cm.oklahoman.com/specialoffer/.

This article originally appeared on Oklahoman: State agencies spent nearly $100 million on marketing, PR since 2019

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