NEWS ANALYSIS: Power moves across the pond

David Quainton looks at how companies are evolving their European comms to reflect London's increasing prominence and the divergent needs of the Continent.

Whetstone: PR power broker
Whetstone: PR power broker

In the not-too-distant past most big American firms could divide their business activities into two sectors – homeland and international. International meant any region other than the US. It was treated as a single entity with indistinct consumers and values.

More recently, Europe suffered the same fate – treated by US companies as one market where a single comms plan would suffice. This was particularly true of family-owned dynasties that still saw US business as their focal point.

But the landscape is changing. Earl­ier this year New York mayor Michael Bloomberg warned his city that London threatened it as the financial capital of the world – an unprecedented statement for his post. And businesses, including PR agencies, are increasingly using London or European cities at the central hub for global expansion, particularly into the Middle-East, India and Africa.

Naturally, this is having an enormous impact on the role of the European comms director.

Burson-Marsteller chief executive Jonathan Jordan (l) says US firms are inc­reasingly recognising the importance of Europe. ‘London has an enormous range of diverse stakeholders. It is not just the world’s financial capital, but the place where campaign groups are often headquartered,’ Jordan says. ‘The “stakeholder soup” of London and the importance of Brussels means European comms has matured rapidly in the last ten years.’

Big smoke
Citing his own agency as a case of a US firm (although now owned by London-based WPP) having a European presence, Jordan says a one-dimensional view of Europe will no-longer suffice. ‘A brand is a promise, reputation is keeping that promise,’ says Jordan. ‘To keep the reputation promise you cannot take a one-dimensional view to comms in Europe.’

One European comms director says the way to approach the increasing importance of Europe is to treat sub-regions individually, with local comms managers.

‘The Euro comms director’s role, instead of advising on comms in every region, should be to direct affairs and manage senior staff,’ he argues.

This appears to be the view taken by Microsoft, which moved its European headquarters to Paris from Berkshire last year, resulting in the departure of senior director of corporate comms EMEA Mike Love (PRWeek, 16 September 2006).

Love (r) left because he did not want to move abroad, but Microsoft was keen on creating a strong hub from where its European comms could be managed, and to which individual sub-regions could report.

Unfortunately, though, the more enlightened US firms form only half of the picture. A recent report by headhunter Watson Helsby showed the European comms director role is becoming ­increasingly difficult, with pressure ­resulting from the frustration that some US-headquartered firms still do not ‘get’ Europe. Moreover, the process of breaking Europe into ‘sub-regions’ to make the task more manageable is onerous.

When former Tory Party aide Rachel Whetstone joined Google in 2005 as director of European comms, one of her first tasks was to find a range of European comms managers and expand a team of five to 15 (PRWeek, 18 November 2005). It is a story familiar to many large US firms.

But Watson Helsby’s research shows that there is still disappointment among many European comms directors that their needs are not being recognised.

‘Managing comms and reputation across Europe is a wholly different task to what it used to be,’ says Watson ­Helsby co-founder Nick Helsby.

‘However, this complexity tends not to be recognised by global HQ, who often believe that the whole EU region is homogenous.’

One European comms director within the food sector argues the US is yet to recognise Europe is leading the way on regulation.

'If the World Health Organisation or World Trade Organisation makes a recommendation it is invariably the EU which will regulate first,’ he says. ‘There was a UK Government White Paper on obesity in 2004 – it’s only just reaching the US.’

But, he argues, the US sometimes fails to recognise, or even use this to plan its future comms. He says the answer is aggressive lobbying, because increasingly the European voice will have to be heard.

Kellogg’s corporate communications director Chris Wermann (l) argues the increasingly global nature of pressure groups will also force a more global comms perspective.

‘In the UK we had an anti-salt lobby called CASH, now there’s WASH, which is the global version,’ Wermann reveals. ‘There is a coalescence around common agendas.’

Cashing in
This does not mean the US is not at all health-conscious or lacking in ­philanthropy itself.

Wermann points out that many big US companies, Kellogg’s included, were founded by philanthropic individuals. But the Watson Helsby survey reveals that in the CSR arena US companies are failing to recognise the needs of their ­European counterparts.

‘Since it is not on the agenda of many US companies in their own country, European comms directors have a real job in getting it recognised as a serious issue in Europe,’ says Helsby.

Despite the more negative findings of the survey the picture is not entirely gloomy. At least three European comms directors contacty by PRWeek said they had no problems with the level of US control.

In fact, they felt Europe, and in particular the UK, were leading the way in the comms arena and this had been recognised by the US.

This is reflected in companies such as New York-based Goldman Sachs, which has a British global head of corporate comms – Lucas van Praag. Van Praag made headlines last year when he was made a partner at the firm, instantly making him one of the world’s highest-paid comms professionals (PRWeek, 3 November 2006).

So the European comms directors role, with respect to US-owned firms, is in a state of flux. In some cases US businesses understand the needs and importance of their European counterparts, and in some they clearly do not. For those that do not the only answer is some concerted lobbying, or as one director put it, ‘hire someone very good to do it on your behalf’.

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