PR 2.0 Impact on Business Matters


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A poll to understand how public relations can remain relevant and drive impactful and sustainable business impact in an era of constant economic flux.

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PR 2.0 Impact on Business Matters

  3. 3. 03PR 2.0: IMPACT ON BUSINESS MATTERS ForthoseofusintheIndianpublicrelationsindustrydrainedbythelong-drawn-outrecession,thereissomegoodnews. Leading practitioners of India's communications industry believe the best days of the industry were still ahead of it pointing towards new opportunities arising out of the need to build new competencies to address the growing complexity of the public relations business. Is this an overtly optimistic assessment given that repeated hopes of an imminent economicrecoverycontinuetoflatteronlytodeceive? Onehopesitisnot. The global economic environment continues to adversely impact most services businesses, including public relations. The growing business complexity has shrunk the opportunity pool for consultancies with the number of engagements goingdownconsiderably. Ashwani Singla MD & Chief Executive, Asia Penn Schoen Berland Yet, while the number of opportunities may have gone down, the nature of business has become far more strategic in nature offering a glimpse of what is to come. Client organizations may not necessarily be slashing their spending budgets drastically, but are instead pushing public relations consultancies to provide services that offer more long-term bang for their buck. We are, therefore, predictably, witnessing a spurt in the demand for services with fresh new competenciesacrossarangeofmedia,technologiesandapproachestocommunicationsengagements. 34% of representatives of client organizations said they spend over INR 1 crore per annum on public relations services
  4. 4. COMPLEXITYOFFERSOPPORTUNITY It may, therefore, be pertinent to consider some very unique perspectives we drew out of our analysis of this survey's data. The growing complexity of the public relations business is a result of, among other things, the emergence of the Internet that is today riding a second wind with the onset of social media platforms. The complexity is further heightened byagrowingdemandforresearch-backedcustomizedcommunicationmovingawayfromgeneralbroadcasts. Finally, the growth of mobility and mobile devices are becoming a central medium of engagement to strengthen this industry trend. This complexity – or the New Normal in the public relations industry – is becoming pervasive amid an era oflongperiodsofunderperformance,stallinggrowthandhighunemploymentacrossorganizations. KEYINSIGHTS Within a broad acknowledgement that the PR business is far more complex than it was ever before, there exists differing perceptions across client and consultancy organizations on whether organizations are ready to cope with this new complexityand,therefore,theirabilitytotaptheemergingopportunities. There is a growing tide of organizations that underscore the importance of social and digital media for their businesses and, indeed, for their long-term strategic growth. More than 85% of representatives of client organizations, for instance, feel digital marketing is a key enabler while driving engagements due to its ability to connect in real time, its reach and abilitytoscaleefficientlyandwithspeed. However, as our analysis showed, while the importance of social of representatives of client organizations said they spend over INR 1 crore per annum on public relations services and digital media for businesses was generally being accepted overall, about half of our survey respondents still feel that public relations consultancies were not making the mostofthismediumtobeabletoleverageiteffectivelyenough. Letusthinkaboutthefollowingnow: 1. 80% of clients acknowledge that public relations play a strategic role in their business, while 69% of consultancies felttheyweretreatedasstrategicpartnersbytheirclients. 2. Clients and consultancies alike largely recognize the complexities of the New Normal. They support a research-and insights-driven approach for effective measurement of business ROI. But fewer agencies compared with clients favourmeasurementofimpactonbusiness. 3. A significant 2/3rd of clients demanded research to measure the effectiveness of communication pointing toward a growingacceptancethatappliedinsightsresultinlastingimpactandbetterROI. WAYFORWARD Aligning with the reality of the new business complexity, public relations consultancies must focus on addressing gaps in theirexisting approaches and offer solutionsthat demonstrate theirhunger to employ strategies that concentrate on the resultsandnotjustontheeffort. While consultancies will need to focus on driving business impact and book their place at the strategic head table of clientorganisations,buyingdecisionswillbeinfluencedbythefollowingimperatives: a. Focusingonresultsandnotjusttheeffort. b. Developingprogramsthatwillbuildsustainedmomentum. c. Becomingproactiveinidentifyingissues/mitigaterisks. d. Becomingstrategicpartners.Evolvingfrombeingmerelyimplementersofpublicrelations. e. Developingsectorordomainexpertisetoofferadvicethatisinnovativeandideasthatareactionable. 04 PR 2.0: IMPACT ON BUSINESS MATTERS
  5. 5. THE SURVEY 05PR 2.0: IMPACT ON BUSINESS MATTERS The online survey Penn Schoen Berland ( conducted in partnership with IMPACT magazine makes an attempt to understand how public relations can remain relevant and drive impactful and sustainable business impact in an era of constant economic flux. Decision makers and senior communications practitioners at leading Client Organisations and Public Relations Consultancies were interviewed to assess expectations, preparedness and delivery ofpublicrelationsservices. METHODOLOGY 89 senior communication practitioners were polled across the country's major metropolitan areas, including Delhi, Mumbai, Bangalore, Chennai, Kolkata and Hyderabad in the month of May 2013. Chief executives and heads of the corporate communications function on the client side accounted for 56% of the sample; while country heads, account heads and senior managers at public relations consultancies comprised the remaining 44%. The survey places consultanciesintothreecategories:FullService(64%);Specialized(24%);andRegional(10%). 56% Chief Executive, Head of Marketing, Head of Communications across Diversified, BFSI, Technology, Healthcare, FMCG, Retail. 48% have a dedicated internal Public Relations team. 44% have a small internal Public Relations team, outsourcing most activities. CLIENT ORGANISATIONS 44% PUBLIC RELATIONS CONSULTANCIES 64% are from full service organizations. 24% from specialized service organizations. 10% from regional organizations. Country Head, Account Head, Senior Manager in consultancies. 69% of which are Independent (Indian Owned). Whom did we ask? Online survey in the month of May across top metros in India. Amongst key decision makers across Client Organisations & Public Relations Consultancies. PSB used its proprietary research and analytical frameworks to draw insights.
  6. 6. AN ERA OF GROWTH India's public relations and communications industry appears to be heading towards an era of growth even as it negotiates the turbulence of a relentless recession afflicting the global economy. More than 60% respondents of the survey said they expect that the best days of the industry are still ahead of it, while 34% of Client Organisations said they spendoverINR1croreperannumonpublicrelationsservices. While this augurs well for the industry, an overwhelming majority of respondents, at over 90%, felt the public relations industrylandscapeisfarmorecomplextoday,pointingtowardnew opportunityforgrowth. It is here that public relations consultancies and client organizations must build lasting strategic partnerships to exploit thisopportunity. The majority of respondents, while acknowledging the growing complexity of the public relations business, said this was a result of the emergence of the Internet and digital media that was riding a second wind with the onset of social media platforms. Considerthenumbersbelow thatpointtowardthegrowingimpactofthedigitalmediumaswellastheriseofnew media.  One, 2/3rd of respondents acknowledge the growing importance of social/ digital media for their businesses and, indeed,forlong-termstrategicgrowth  Two, over 85% of clients said digital marketing is a key enabler while driving engagements given its ability to connect inrealtime,scaleefficientlyandwithspeed  Three, clients are a divided house when evaluating consultancies on their ability to understand the scope of new mediumsofengagement READY, NOTREADY Given this emerging environment, we asked respondents whether public relations consultancies were ready to face this new business complexity. Predictably, there were differing views between client organizations and public relations consultancies on this very parameter, a crucial first step for consultancies beginning their journey to be a strategicpartner. Differing Views: Readiness Quotient of Consultancies Are You Ready? Absolutely Ready Somewhat Ready Ready but need some improvements Not at all Ready Clients Consultancies Client’s view of Consultancies’ Readiness 8% 18% 0% Clients Consultancies Client’s view of Consultancies’ Readiness 66% 54% 32% Clients Consultancies Client’s view of Consultancies’ Readiness 24% 23% 60% Clients Consultancies Client’s view of Consultancies’ Readiness 2% 5% 8% The divergence in perceptions is predictable given the different business priorities and environments of clients and consultancies. However, the survey draws attention to varied opportunity areas for consultancies to address some of the keychallengesthathavebeenhighlighted. 06 PR 2.0: IMPACT ON BUSINESS MATTERS
  7. 7. 07PR 2.0: IMPACT ON BUSINESS MATTERS Capability Assessment: Consultancies have much to do Consultancies’ self image Clients’ view of Consultancies 74% 52% 82% 46% 69% 42% 79% 52% Have a formal process of measuring impact or effectiveness of the communications programs Recommendations and ideas are supported with relevant research data Provide research data to support their ideas or initiatives: Capable of leveraging Digital media effectively 96% see digital media as a friend and enabler in driving higher impact. Clearly, driving business impact and being able to measure that effectively, as we stated earlier, is emerging as a key parameter of a strategic partnership, though there is a strange dichotomy in client expectationson whether the measure ofimpactwasmoreimportantthanmediacoverage. RESEARCH-DRIVENINSIGHTSFOR LASTINGIMPACT As client audiences become smarter and more knowledgeable, public relations consultancies have much to do to be able to exploit great opportunities that lie in making the right investments to manage this changing business environment. Driving impact as client audiences become smarter High relevance for Consultancies High relevance for Consultancies Low relevance for Clients High relevance for Clients 1) New platform of interaction like Facebook, Twitter, etc. 2) Measurement of online presence is still not well understood or practiced 3) 24x7 news cycle 4) New mediums of communications have emerged (tablets, smartphones, etc.) 5) From general broadcast to customized communication 1) Parameters for measuring success have changed from media COVERAGE to IMPACT on business 2) Smarter and knowledgeable audience groups 3) Problems and issues are no longer local 1) Lack of audience loyalty due to a plethora of choices 2) Emergence of citizen journalism 3) Advent of technology – cloud computing, cloud applications, etc. 1) Media coverage continues to be most important measure Disconnect
  8. 8. The new complexity is offering an opportunity for public relations consultancies to build an approach that leverages research-driven insights to build communication campaigns for specific client needs to be able to effectively measure its impact on their business in a sustained manner. Greater customisation is really the key and will differentiate the winnersfromthelosers. Making the right investments in the face of change Consultancies’ initiatives to overcome challenges Clients’ initiatives to overcome challenges 51% 60% Collaborated with agencies that offer end-to-end services Invested in technology / specialized tools 46% 30% 67% 66% 59% 60% 23% 28% Added expertise for specialized media (social media, internet, etc.) Upgraded existing skills of my team Increased team size Fewer consultancies compared with clients favour measurement of impact on business. However both clients and consultancies largely recognize the opportunity that an empirical, research-and insights-driven approach offers, especiallygivenitsabilitytomakethemeasurementofimpactonbusinessROImoreeffective. Consultancies need to improve on perceptions of delivery Clients view of Consultancies’ Understanding Consultancies’ Self view of Understanding Client’s view of Consultancies’ Delivery Consultancies’ Self View of Delivery New platform of interaction New mediums of communications 24x7 news cycle From general broadcast to customized communication Problems and issues are no longer local Parameters for measuring success have changed from media COVERAGE to IMPACT on business Measurement of online presence is still not well understood or practiced Smarter and knowledgeable audience groups 25 35 45 55 65 75 85 95 It has been some time now that client organizations have been ready to pay a premium for advice based on empirical evidence or for insights-based campaigns. In our last report, we spoke about the need for India's public relations industry to embrace empirical public relations to demonstrate how integrated stakeholder campaigns can move the needlebyapplyingresearch-basedactionableinsightsateachphaseofacampaign. 08 PR 2.0: IMPACT ON BUSINESS MATTERS
  9. 9. 09PR 2.0: IMPACT ON BUSINESS MATTERS Greater Customisation: Focus on research based insights to drive impact Customised research is a potential way to measure effectiveness 69% 46% 69% 54% 55% 62% 62% 50% Internet or online activity Direct feedback Customized survey/research Media coverage (column-centimetres space) Consultancies Clients Clients and consultancies alike are beginning to favour the empirical model steadily. The survey finds that 80% of clients acknowledge that public relations plays a strategic role in their business, while 69% of consultancies feel it is treated as a strategic partner by clients. Within this view, there are clearly great new opportunities for public relations consultancies to demonstrate much stronger capabilities in areas such as media relations by expanding its understandingoftheroleofstrategicmedia,publicadvocacyprogramsandfinallyinvestorrelations. Opportunity: Media Relations, Public Advocacy & Investor Relations Consultancies’ offering of services Clients' need for services 67% 94% Media relations Digital marketing Thought leadership Public advocacy Public affairs and government relations Internal/Employee communication Corporate social responsibility Investor relations 64% 60% 64% 46% 41% 40% 36% 36% 64% 30% 64% 26% 21% 24% 80% Client organisations agree PR plays strategic role in their business 69% Consultancies feel they are treated as Strategic Partners CSR, Internal Communication & Thought Leadership offerings overestimate client demand
  10. 10. 10 PR 2.0: IMPACT ON BUSINESS MATTERS STRATEGICPARTNERSHIPSTO CO-CREATE OPPORTUNITIES Offerings woven around internal communications, thought leadership, and corporate social responsibility programs – in spite of the fact that CSR, as we all know, is the next big thing – appear to overestimate client demand for these services atthemoment. In an era of citizen journalism and the explosion of digital information, companies and public relations agencies are struggling to establish and maintain mutually-beneficial relationships. Organizations that use sophisticated public relations tools, including the use of technology and science (analytics/measurement) strategically to co-create opportunitieswillseparatetheboysfromthemen. Becoming Strategic Partners: Consultancies must focus on driving impact EXPECTATIONS CLIENTS HAVE OF CONSULTANCIES TOP 4 EXPECTATIONS CONSULTANCIES HAVE FROM CLIENTS TOP 4 Develop programs that will build sustained momentum Develop sector or domain expertise to deal with specific business issues and requirements Come up with innovative and actionable ideas or advice Focus on results and not just the effort Realistic expectations on delivery and timelines Openness to using new ideas/ technology/ tools Consider programs that will build sustained momentum See the role of agency as a strategic partner
  11. 11. ABOUT PENN SCHOEN BERLAND Penn Schoen Berland (PSB) is a 'Global Research based Strategic Communication Advisory' that brings the lessons learnt from its campaign trails into the board room to help companies negotiate some of their toughest corporate image & corporate affairs challenges. For over thirty years PSB has used research to leverage unique insights about public opinion, to give our clients a competitive edge. PSB serves Fortune 100 Corporations, leading Hollywood Studios and hashelpedelectover30PresidentsandPrimeMinistersaroundtheworld. PSB South Asia office was established early 2011 in Gurgaon and serves a blue-chip clients comprising leading Indian transnationals and multinational corporations operating in the Indian Sub-continent. It has also helped design winning campaign strategies for leading candidates across several State Assembly elections. Ashwani Singla, MD & CEO, Asia who was formerly the CEO of Genesis Burson-Marsteller (GBM) & Board Member, Burson-Marsteller, Asia Pacific leads theoffice. PSBisapartofY&RBrandsandWPP (NASDAQ:WPPGY).
  12. 12. Penn Schoen Berland South Asia, 603, Unitech Cyber Park, Sector 39, Gurgaon, Haryana, India Ashwani Singla MD & Chief Executive M: +91 98110 75843 Shefali Khanna Director, Marketing M: +91 97111 18615