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Silo or Prairie? Document Transcript

  • 1. Final: 16TH May 2011 Silo or Prairie:The Changing relationship Between Marketing & PR May 18, 2011 Miles Young, CEO, Ogilvy & Mather Worldwide
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  • 3. [SHOW SLIDE: Silo or Prairie][Ladies & Gentlemen: it is a very great pleasure tobe with you at the 2011 SABRE Awards here inPrague.]Let me make a confession. I am an enemy alien. Iam not a ‘PR person’. I have had no formal trainingin public relations. I joined Ogilvy & Mather as anadman. And after eight years in advertising, Imoved to the Direct Marketing business. But duringthis time I became interested – with an increasingsense of passion – in integration, in howcollaborative working between different specialistscould produce seamless programmes. One of thefirst of these was an OPR led campaign for theBritish Insurance Companies as they responded to 3
  • 4. changes in the UK regulatory environment. Itsounds like a no-brainer now, but back in the 1980’sit was revolutionary stuff. Then, when I moved toAsia, I became organizationally responsible forOgilvy Public 4
  • 5. Relations, along with our other disciplines, and sawit move, under a number of very able managers, intoa leadership position. In particular, I becameinvolved in our PR business in China.So what you are hearing described in a roundaboutway is a business model in which the differentcommunications disciplines of Ogilvy & Mather –public relations, advertising, direct marketing andactivation – sit under one roof.[SHOW SLIDE: 360]We call it 360°, and each of these disciplines, whileexisting independently, and being resolutelycommitted to their specialist insights andtechniques, owe their ultimate loyalty to a holisticview of the client’s problem, not just a narrow 90°
  • 6. view. A whole series of interactions – from culturalvalues to digital platforms to common training -reinforce the mutuality which lies at the heart ofwhat we do day-to-day in pursuit of deepintegration, the sort of integration which starts at astrategic level – as opposed to the sort which ismerely executional, where things look and feel thesame, but where the intellectual underpinning issimply not there.[SHOW SLIDE: IMAGE OF SILO]Public Relations was not born in a silo but at somestage from the middle of the last century it started toinhabit one. I realized when I submitted my title toyou that the word ‘silo’ was perhaps not a familiarone. Silos are those vast objects in which 6
  • 7. harvested grain is stored: closed, with bleak walls,they symbolize isolation from the world aroundthem. While the founders of modern PR in the USA– men such as Ledbetter Lee - were truly broad-minded, their successors tended towards silo-mindedness, if only perhaps, to signal theirdifferences from the advertising industry, and theirforgivable pride in earning media coverage ratherthan just paying for it. Their skills and their activitieswere primarily premised on what we would think oftoday as media relations. It was a model whichserved the industry well, but which I suggest, is nowdead – as dead as a dodo, as dead as a dinosaur.Three forces have killed it: the forces ofsocialization, of fragmentation, and of globalization.Their impeccably perfect sense of timing has 7
  • 8. resulted in a beautiful congruence right now. It’s anexciting time – if we are prepared to open our silos.[SHOW SLIDE : SOCIALIZATION}First, let me talk about socialization. I do not haveto lecture you on the evidence of the arrival of socialmedia. The absolute numbers are out there for allto see. We can all have fun adding up how manycountries Facebook’s population is the equivalentof. Hardly surprising, then, that 25% of the searchresults for the world’s top 20 brands comprise linksto user generated content. Social media is theflavour du jour for any savvy marketer: numberscount and it offers numbers. 8
  • 9. What we can see as a result is the arrival of a newphenomenon – “strangers with experience”. Howodd this phrase might have seemed five years ago.More traditional sources of advice have declined inthe trust given to them. In the US now, between 34to 50% trust ‘strangers with experience’, in otherwords, on-line peer advice. In China, it is aroundthe same. In the EU, the same.[SHOW SLIDE : SOCIALIZATION- TRANSPARENCY]But the arrival of social media has had a moreprofound effect still - on the corporations whichmake those brands. Put simply, there is no longerany hiding place. The bracing wind of transparencyhas blown through corporate corridors in a way 9
  • 10. which defies resistance. Of course, we have seenrecent examples of attempted resistance. WhenToyota first started to receive reports of accidents,and credible attributions of those accidents todefective brake pedals, its first reactions were slow.As the truth emerged, it seemed that it had to bedragged out. Now I do not believe there was anywillful conspiracy not to be transparent: rather, theculture and politics of a conflicted organization justnever put a premium on transparency as a value;and hundreds of small decisions added up to anoverall behavioral trait. The learning came the hardway.The good news is that when it comes, transparencycan heal. It has redemptive power. Toyota was 10
  • 11. able, for instance, after a while, to stimulatesupporters’ groups on Facebook in the US who feltthe process of vilification had gone too far.About 40 days after BP’s oil spill in the Gulf ofMexico, and well into its unprecedented mediacrisis, which that created, our Digital Influence teamwere engaged.[SHOW SLIDE :BP]We had a team in the Houston command centre,24/7. Their role was to make heard BP’scommitment to transparency.From no social media uptake at all, the new YouTube, Twitter and Facebook sites quickly generatedsignificant numbers of followers and fans. 11
  • 12. [SHOW SLIDE BP-CHARTS][SHOW SLIDE :BP FLICKR]Transparency was literally streamed out daily via aninfographics campaign, letting the facts speak, andphotos were streamed out on Flickr.There was an ‘Ah-hah’ moment during the crucialpressure test of the well-casing CNN was coveringthe situation live and was mistakenly reporting thatthe pressure gauges on screen were what shouldbe watched to assess the success or failure of theoperation. 12
  • 13. [SHOW SLIDE :BP CNN]We were able, immediately; to corral the BPtechnologist, draft the words to clarify, and then totweet. The tweet reached the anchor, whocorrected the story. An on-air academic confirmedour tweet as accurate. Bob Dudley, the new CEO ofBP, was present at the time and had a vividdemonstration of the real time power of socialmedia. While still in its early days, there were signsthat BP’s transparent approach was beginning toturn the tide of opinion in the US.The first requirement of transparency is the ability tolisten. You live or die by it.[SHOW SLIDE: BP LISTENING POSTS] 13
  • 14. You need to understand what people are saying.‘Listening posts’, like this one provides, againstagreed conversation criteria, a set of actionablereports.But understanding how people search is asimportant as what they say. [SHOW SLIDE: SKINCARE INFLUENCERS]Let’s think of search as the new shelf-space.Against any set of key words, we can nowunderstand how the “search shelf” is constituted: inother words, where do the results fall, by %? Inshopping sites, on video, in images, in wiki, onnews, in blogs, magazines or books? We can also 14
  • 15. understand the constituents of search volume in anycategory.Insights like these are the ‘sine qua non’ of anysocial influence strategy. Now, the Pareto principle,which I was brought up with in my Direct Marketingcareer, that 20% of the users amount to 80% of thevalue, applies also to social media. Our task is toinfluence those who most influence. Here, forinstance is an influence map, for the beautybusiness in the US. It shows graphically theinfluence muscle of style bloggers, fitness sites,travel and cooking sites, and so on – of whichbeauty bloggers are just one component. They arenow the 80%. 15
  • 16. [SHOW SLIDE: CONVERSATION MANAGEMENT]Then we also have to seek peer-to-peer influence.This is activity at the social grass roots. It createsan entirely new art form, that of “conversationmanagement”. The besetting sin here is the ‘oneoff’ – the tactical Facebook page or Twitter feed.What is important is to see conversation in terms ofa calendar, with conversation managers overseeingthe grass roots it serves. The context of theconversation has to promote everyday engagement,remarkable experiences and be sustained overtime.You can see all these things coming together in some ofthe work we do for Ford. Recently, we designed anenterprise-level digital influence strategy which showed that“Ford is different” and which has helped to deliver market 16
  • 17. share growth at a time when one can still feel the after-effects of the auto industry crises.[SHOW SLIDE : FORD CES]With the reveal of its first-ever consumer electric vehiclesheduled for CEO Alan Mulally’s keynote at the 2011Consumer Electronic Show, Ford Motor Company knewit would have no trouble making the news. However, otherautomotive companies have increasingly used CES for bigannouncements, so Ford knew it had to be innovative.After using Facebook for a teaser photo countdown to thereveal, we hosted a 24-hour technology and innovationlive-stream on Ford’s Facebook page counting down to thekeynote. Bloggers from the around the world participatedas well as Ford executives live from the show floor. As aresult, Ford social media mentions exceeded 63% share ofvoice of the major automakers presenting news at CES,live-stream viewers watched for double the time and Fordachieved nearly 50 million social media impressions digitalefforts.Even when Ford has not controlled the content directly, ithas still been able to manage conversations through digitalstrategy. 17
  • 18. [ SHOW SLIDE: FORD GLOBAL TEST DRIVE]In Febuary 2011, Ford hosted nearly 20 key social mediainfluencers – internet journalists and bloggers – withfocuses on technology and social media at the FocusGlobal Test Drive event at INTA in Spain. These bloggerswere sent personal video invites and asked to comeexperience the new 2012 Ford Focus under a variety ofconditions and then encouraged to document their drives.After this event, blogs reached 5.3 million visitors, videoscreated by bloggers generated over 500,000 views andGlobal Test Drive related tweets reached 12.3 millionfollowers.[SHOW SLIDE: SOCIALIZATION-TRANSPARENCY- COMMUNITY]I think it will be evident now that if the result ofsocialization is transparency, then community is thedividend of transparency. 18
  • 19. However, a community cannot be built haphazardly.It has to be grounded in a digital influence strategy.There is a real case here to “make haste, not hurry”.The collection of expired initiatives, ignored sitesand unattended accounts litter the social universelike satellite debris in outer space. I hope I havebeen able to suggest to you that a response tosocialization lies at the heart of an enterprise, not atits edges. If you accept this, and I am sure you will,there is a huge implication for corporategovernance. Imagine, for instance, an organizationwhich has complex channels or maybe licensedpartners. A governance mechanism whichmanages one-step-away conversations has to beworked out, not just ignored or assumed. If acustomer seeks to engage a soft drink manufacturer 19
  • 20. via for instance the brands bottler, who managesthe conversation, and how? We are dealing herewith a genuine transformation of how the ‘public’ inpublic relations is legislated for and catered for. Inthe new world, the role of PR lies with issues likethis. Its role is to help socialize the enterprise.[SHOW SLIDE FRAGMENTATION]Next, I want to talk about fragmentation.Again, I do not have to adduce the evidence here.It is clear for all to see. But the de-massification ofmedia has been accompanied by iPad or androidtechnology: another perfect storm to rage aroundthat increasingly exposed silo. Multi-purposedevices aggregate the vast fragmented mass ofavailable disaggregated content: they are so much 20
  • 21. the new normal it seems hardly worth commentingon them.Of course, the fragmentation – and the riskassociated with it – is not totally new. An early butprescient commentator of the implications was theAmerican sociologist Orrin Klapp. In the 1980’s,Professor Klapp pondered the fragmentation of themedia, and the consequent proliferation ofinformation, and coined a phrase to describe theresult. He called it the “meaning gap” – in otherwords as the quantity of information increases, theinability to extract meaning from it also grows.Klapp is all but forgotten now, but never, I wouldsuggest, has his thinking been more relevant. 21
  • 22. It has been advertising much more than PublicRelations which as a discipline has explored therealms of neuro-science. It seems rather urgent tome to rectify that. In fact, comparative psychologyhas much to teach us about how we qualitativelydeal, in our brains, with the quantity of informationwe are now exposed to. Essentially, we havemoved into an era of “cognitive overload”, where ourbrains lose the ability to encode. Welcome to the“meaning gap”. In an intelligent article on thesubject, John Lorinc wrote – and his words havenever been more timely: “It often seems as thoughthe sheer glut of data itself has supported the kindof focused, reflective attention that might make thisinformation useful in the first place. The dysfunctionof our information environment is an outgrowth of its 22
  • 23. extraordinary fecundity. Digital communicationstechnology has demonstrated a striking capacity tosub-divide our attention with smaller and smallerincrements; increasingly, it seems as if the dayswork has become a matter of interrupting theinterruptions.”What on earth can we do about it? Lorinc rightlycriticizes those who believe the solution lies in moretechnology. Rather, it seems to him – and to me –that it lies within us. In fact, we need look not muchfurther than a “white paper” of the Arthur W. Pagesociety of the USA entitled “The AuthenticEnterprise”.[SHOW SLIDE : AUTHENTIC ENTERPRISE] 23
  • 24. It posits the urgency to a corporation of beinggrounded in some sense of what defines it, why itexists and what it stands for. The authenticity ofthese things is described as the “coin of the realm”for successful corporations and those who leadthem. In place of the voice of authority, thesestakeholders demand “proof of authenticity”. Areyou who you claim to be? And, who do you claim tobe?[SHOW SLIDE :FRAGMENTATION-AUTHENTICITY]One of the co-authors of this white paper went on tobecome the IBM CMO, Jon Iwata. Jon is aremarkable client who is helping reinvent traditionalnotions of marketing and public relations. He has ininstinctive dislike of what he calls “campaignery”, 24
  • 25. which has inspired a remarkable case history withinthe last two years. A quotation from AbrahamLincoln is much in use at IBM: “character is thetree, reputation is the shadow”. Is Public Relationsa player in the shadows, or a builder of character?[SHOW SLIDE: IBM ]In the IBM story, a lot of work went into the matter ofvalues, in thinking about the tree, about what madeIBM authentic. And a great deal more work wentinto defining the role of the tree in the world.In the new “internet of things,” there is still massiveinefficiency. On average 67% of energy is lostmoving on grids, for instance. 25
  • 26. Well, out of this emerged the belief that the worldwould be a better place if it simply worked better;and out of that came IBM’s Smarter Planet platform.[SHOW SLIDE:IBM SMARTER PLANET LOGO] This platform was launched by the Chairman ofIBM, Sam Palmisano at the US Council of ForeignRelations in a significant policy speech – only thendid it turn into advertising – in the form, literally, of amanifesto.[SHOW SLIDE: IBM MANIFESTO]Then it morphed into a whole series of op-eds ontopics, published each week in the Journal and theNew York Times.[SHOW SLIDE: IBM JOURNALS] 26
  • 27. [SHOW SLIDE:IBM JOURNALS 2]Each one expressed itself in a different waysymbolically, drawing from the work ofcontemporary designers: design was a value whichthe founders had baked into IBM’s DNA, but whichsometimes in its history became lost.[SHOW SLIDE: IBM ECO-SYETM]Behind these, a whole eco-system of contentdeveloped. In fact, the agency’s role became that ofa content producer in which the traditionaldefinitions of copywriting, journalism, academicresearch, public affairs, and design all becamemashed together. It is true integration, but in truth 27
  • 28. all the components come from a Public Relationsview of authenticity. It has become a much talkedabout phenomenon and something of a referencepoint for US clients. There are many testaments toits success so far but the one I like the most is thatwithin weeks a set of op-eds appeared on the wallsof senior White House staffers. And it has achievedexceptional results – both in terms of attitudinalmeasure and hard sales. This was the tree castingits long shadow.So, if the need from fragmentation is authenticity,the output of authenticity is belief. 28
  • 29. [SHOW SLIDE :FRAGMENTATION- AUTH-BELIEF]A striking endorsement of the power of belief inbusiness came to us from some research weconducted last year. Just as IBM had a point-of-view that the world would be a better place if itworked better, some companies also seem to havewell-articulated beliefs underpinned by a sense ofauthenticity. Yet, in the same categories others donot, to the same degree.One part of that research was conducted with pairsof brands, which were allocated into two groups,those with a higher point-of-view rating and thosewith a lower. In other words, those that had a beliefabout the world, or stood for something.Consumers sorted them very clearly. And we learnt 29
  • 30. that if a brand is seen to have a strong point of view,then its consideration is heightened. Brands withstronger points of view also ranked higher inconsumer perception. Then we were able to takethese ratings and correlate them on a larger scalethrough WPP’s Millward Brown’s BrandZ database.We found that best performing brands for point-of-view out performed the lowest by 2.2 times in termsof brand voltage, which is usually accepted as onecomponent of market share prediction. In otherwords, it pays to believe.Now I confess this makes me very happy; and so itshould all of us – because it demonstrates thatplatforms predicated on belief galvanize brands in away which I think had become somewhat forgotten. 30
  • 31. So it is no coincidence that when Sam Palmisanotalks about the Smarter Planet agenda he talksabout it as a “point-of-view” and expresses it as “abelief.” He did not talk about it as a strategy orexpresses it as a vision, for instance.In this way I sense a bigger mission for PublicRelations than its silo comfortably provides for, onewhich values definition and sustenance is asimportant as message projection.[SHOW SLIDE :GLOBALIZATON]Finally, let me deal with globalization.Again, I need not labor the evidence. In our PublicRelations business, the US is our largest market, 31
  • 32. China is the second. That is globalization. Butsometimes I see in articles about Public Relations aperhaps unjustified faith that there is a “flat world.”Of course we’re all familiar with the phrase “flatworld”, so brilliantly promoted by Tom Friedman. Ihappen to believe that the world is not quite as flatas all that. Certainly it’s shrunk, made smaller bytechnology. But some would argue it’s still got alot of mountain peaks on it.I happen to believe the truth lies somewherebetween two extremes. As I see it, the world inwhich we do business today is neither completelyflat, nor is it totally ‘peaky’. Rather it is bumpy. Thebumps can be quite intimidating. They can be 32
  • 33. overcome, but we need to be wary of them in all wedo.In my experience, these bumps are not primarily todo with economics, or politics, or technology – thetopics which the literature on globalization tends toconcentrate on – but rather they are cultural. And itneeds broadmindedness to navigate through them.This was really brought home to me in an incidentwhich involved one of the students I taught at theTsinghua School of Journalism, in Beijing.[SHOW SLIDE : CHINA-TIBET]You will recall that in 2008 Tibet was hit by unrest.In the West, the tendency was to assume the rioters 33
  • 34. were heroes. But in China the popular view – notjust the Government view – was the opposite. I amnot even beginning to enter the debate of who isright and who is wrong. But what then happenedwas that the Western news media started publishingphotographs of the riots.{SHOW SLIDE: RIOTS][SHOW SLIDE:RIOTS]Showing demonstrators being beaten by police.Appalling. The only problem is that these policewere actually in Katmandu, not in Lhasa. In theforeign press a Han Chinese rescued by the policewas described as a demonstrator being arrested.And CNN started cropping photographs in a waywhich removed rock-throwing rioters. 34
  • 35. The effect on my journalism students was dramatic.Having been taught that Western journalism was allabout objectivity they felt betrayed.[SHOW SLIDE:ANTI CNN]CNN took the brunt of the anger; and my student setup a website called anti-cnn.com which in days wasrecording millions of hits and recruiting thousands ofvolunteers – predicated solely on finding andpublishing examples of Western journalisticinaccuracy. Of course, for Westerners this is anuncomfortable story. The internet – the greatflattener – can easily be the inflamer of bumpiness. 35
  • 36. My point is that cultural perspectives even amongstthe young are not globally homogenous. Business-to-business marketing has recognized culturaldifference for some time. Geert Hofstede, the Dutchsociologist did the pioneering research on this.Hofstede used a number of dimensions to definecultural difference: such as the relationship betweenleaders and followers, the importance of rules orlong-term view. The differences between thedimensions dramatically impact the buying process.[SHOW SLIDE; IPHONE]Incidentally, there is now a cool i-touch applicationwhich turns Hofstede into a cultural ready reckoner.See the differences, US versus China, for long termview. 36
  • 37. [SHOW SLIDE: GLOBALIZATION- DIVERSITY]The point I am making is that the response PublicRelations can make to globalization as much in itsability to bring diversity to the party, as in its (muchmore limited) ability to provide homogeneity. Ofcourse, I’m not arguing that it should not be global,but simply that global promises need to begrounded in the reality of the bumps. Recognizingthat the internet, for instance, is an aspect ofdiversity itself is a mission critical promise. Oneonly has to consider, for instance, the nature of theChinese digerati – a very different tribe in someways from those in the US, not just in what they 37
  • 38. believe in but in how they use the internet. In fact,just this year we recently created a dedicated Chinapractice based in New York which aims atsynergizing Ogilvy’s global resources to helpcompanies, governments and investors expand bothinside and into the Chinese market.Another example of “bumpy” diversity is the world’sIslamic community. They represent a global marketof some 1.8 customers: yet few have paid attentionto their own needs in communications. Ogilvy Noor,our new Islamic branding consultancy, aims to doexactly that. Concepts such as “halal” and “haram”should in fact go to the very heart of any truly globalenterprises value set. 38
  • 39. [SHOW SLIDE: GLOBALIZATION- DIVERSITY-CQ]Public relations needs to escape twice over fromthis silo: once from inevitable constraint of ethno-centricity in any market of origin; but then, again,from any superficially credible but practically flawednotion of a flat world which is likely to run againstthe whole notion of “grass roots.” Thus, if therequirement of globalization is to recognize thevalue of diversity, then CQ, cultural intelligence, isthe output of diversity. In the globalized world, IQ isnot enough.So, we have three inputs – socialization,fragmentation and globalization. We have threerequirements – transparency, authenticity, anddiversity. And we have three outputs. Welcome to 39
  • 40. the world of community, belief and cultural intelligence! [SHOW SLIDE: CPR] Herein, I think, lies the opportunity for Public Relations in the future, which is to break out of any vestige of a self-imposed silo, and assume a central role for helping define the corporate public responsibility of the client. It’s a higher order, for instance, than just corporate social responsibility, though it certainly includes it. I do not think, unlike Reacting SPIN some, that the time has come to rename PublicValues Tactics Relations. Formulae such as “Public Engagement,” “Public Interaction” and so on which have been put Creating forward by various “wise men” seem to me to be 40
  • 41. missing the point. The point is, to what end are weinteracting? To what purpose are we engaging?Likewise models which seek to classify forms ofengagement or interaction do not provide the key tothe silo for me. [SHOW SLIDE :VALUES ANDTACTICS]For me, the tension is between “values” and“tactics” on the one hand, and between reacting topublics versus creating communities on the other.Some of the founders of this business – let us flagEdward L. Bernays as one unfortunate example –operated very much in the interaction of reactionand tactics. This is the territory of “spin.”[SHOW SLIDE :SPIN] 41
  • 42. ReactingValues Tactics The whole point of my speech today is that the sweet spot lies in the intersection of values and Creating creation. [SHOW SLIDE: CREATING] It is no coincidence, of course, that the original Arthur W. Page in his long-term role from 1927 to1960 at Bell and AT&T espoused in his time just such a point of view. Only, he didn’t have the technologies fully to exploit it. [SHOW SLIDE: PRAIRIE] This is the prairie of my title. Here is the broad horizon and luscious grassland which Public Relations needs to stake its centricity in. 42
  • 43. Last year in Stockholm, PR professionals fromaround the world gathered and deliberated andannounced the “Stockholm Accords.” They are asignificant step in attacking silo-ism and deservecredit. They talk of the “communicativeorganization,” which I understand, but whichperhaps does not go far enough in the direction ofauthenticity. Where I worry is in the Accords’definition of the role of the “Public RelationsDirector,” who they say “cannot realistically hope todirectly monitor more than 10% of its organization’scommunicative behavior.” Here, I think, there isinsufficient ambition. But isn’t the real role that ofleadership itself? Of helping lead the leaders? Andshould not that role be central and not peripheral? 43
  • 44. In fact, recent changes in a number of organizationshave begun to recognize the opportunity. I havealready mentioned IBM, where corporate PR, brandPR and marketing have converged organizationally.Another example would be P&G, where the BrandBuilding organization is now connectedorganizationally into External Relations. Thisrecognizes that in the new world of influencecorporate reputation in a company cannot have oneguardian, and a brand reputation in the samecompany another.To me this is highly empowering. The silos arebreaking down. The prairie dogs are howling andtheir message is about the centricity of the newPublic Relations to the business world of tomorrow. 44
  • 45. 45