Propaganda was formed in Düsseldorf, Germany, in 1982 by Ralf Dörper (a member of the German industrial band Die Krupps). As a trio,with artist Andreas Thein and vocalist Susanne Freytag, they made initial recordings in Germany which were deemed for future release in UK, where Ralf Doerper´s early experimental recordings had met critical acclaim. With the inclusion of classically trained musician and composer Michael Mertens and singer Claudia Brücken, music-journalist Paul Morley signed the band to Trevor Horn's newly-formed ZTT Records label.
The group relocated to the United Kingdom and released the single "Dr. Mabuse", named after the fictional character made famous by film maker Fritz Lang. The single reached number 27 in the UK Top 40 in April 1984, and number 7 in Germany. The group appeared on various TV shows in the UK, including Channel 4's "The Tube". Here, as well as performing "Dr. Mabuse", they also gave one of their few performances of a cover version of Throbbing Gristle's song "Disziplin".
Before the year was out, Thein had left the band, and with Mertens now filling the gap left by his departure, the band forged ahead with recording their follow-up single and debut album. However both of these were to be delayed as a result of the unexpectedly huge success of ZTT's most famous signing, Frankie Goes to Hollywood. As the label was still in its infancy, ZTT were forced to spend all their limited resources on promoting and marketing the Liverpudlian five-piece. This also meant that Trevor Horn was unable to produce Propaganda's album. Stephen Lipson, one of Horn's established studio engineers, took his place. As a result Propaganda's second single, the more pop-oriented "Duel", didn't surface until April 1985. Perhaps the band's most recognisable release, it was also their most successful single in the UK, reaching number 21. It led to the band making their one and only appearance on the flagship BBC music programme, "Top of the Pops", in June of that year. It was also used as the theme music for the World Rally Championship (WRC) in 2005, the alternate version; "Jewel" having also been used as the theme music for the BBC's Top Gear RAC Rally Report programmes in the late 1980s.
With Frankie Goes to Hollywood tax exiles in Eire, the band effectively headlined "The Value of Entertainment", a series of showcase gigs of ZTT signings, held at the Ambassadors Theatre in London in May 1985. The shows also featured Art of Noise (Paul Morley addressing the audience after three dancers had performed to AON tracks), Anne Pigalle, Andrew Poppy and Instinct. Propaganda were joined on stage by former Simple Minds bassist Derek Forbes and ex-Japan drummer Steve Jansen.