When it comes to PR on a worldwide scale, no single way works best.
To ensure effective, consistent messages about a company and its brands around the world, some PR professionals, such as those at United Parcel Service (UPS), opt for a single outside agency with many offices around the world. Others, including IBM, use a consortium of agencies selected on a market-by-market basis. Still others, such as McDonald's, prepare core messages and strategies in-house and depend on internal communicators in far-flung markets to implement them tactically. Why these companies and their agencies act as they do may provide lessons for other global marketers.
Many factors are driving globalization. With market saturation and stiff competition domestically, many US corporations have become global marketers to boost revenue and fuel growth. The global media landscape has also changed. Publications and broadcast channels have begun to transcend national borders, while the Internet has truly created a global village or at least, say, a town square. Information put out in one country often becomes immediately accessible across the planet.
Such multinational operations require global communications strategies and a method of delivery for consistent messages over a wide variety of countries, languages and cultures. The 'think global, act local' motto seems to apply to the PR strategies of most of the global communicators PRWeek contacted. But how they implement strategy varies widely.
'Clearly large corporations, whatever the economic cycle, will continue their struggle to have global brands and structures,' says London-based Paul Taaffe, Hill and Knowlton worldwide president. 'The issue is how quickly this can go.'
The past decade has seen some of the top PR firms feverishly building their international networks as they have competed to land global business from clients. Burson-Marsteller, for example, works for a number of key clients across the globe, most notably Andersen Consulting and Philip Morris. Such global accounts are highly sought-after because they bring with them not only prestige but also the fees that make agency heads whoop with delight. Consequently, the global agency networks are eager to sell clients on a single firm solution to their international PR needs.
'With the increased globalization that all companies are undergoing, there is an increasing need for centralized direction over communications, explains John Graham, Fleishman-Hillard worldwide chief executive. 'I believe that is a lot easier if you have a single agency with a single point of quality control, budget control and message control.'
In-house at McDonald's
However, a single agency approach is only one of a number of possible models. Fast food giant McDonald's prefers a strong in-house set-up. With 25,000 restaurants spread across 114 countries, McDonald's has only a handful of restaurants in some of these countries. But where the chain has a bigger presence, it hires in-house PR staff. In fact, McDonald's has more than 100 in-house communications staff globally. The largest foreign markets - UK, Germany, France, Japan, Australia, Canada and Brazil - have teams of between eight and 12 PR pros each.
McDonald's has an ingrained culture of being able to coordinate communications using in-house resources. For marketing purposes, the corporation divides the US into 40 regions, each of which has marketing managers responsible for promotional activity at a local level.
'One of the key things at McDonald's is that we are very much a locally managed company,' says Mike Gordon, McDonald's vice president of international communications. 'It is a very decentralized structure. And while we have a small cadre of people at our worldwide headquarters in Oak Brook, Illinois, near Chicago, the countries are run by their own management teams.'
There are 50 PR professionals at the head office, where the great majority concentrate on US activity. Gordon heads a department of four. Beneath him are three 'generalists,' each responsible for one of a trio of geographical regions: Europe, Latin America and Asia-Pacific.
Gordon is also able to draw on occasional support from the domestic PR operation as a way to 'expand their horizons' and share expertise on specific projects with global counterparts. This sort of input is particularly useful when it comes to specialist areas such as the marketing alliance signed with Disney and global sponsorships like the soccer World Cup and the Olympics. 'We are there to help consult and train and share best practices around the world,' says Gordon.
The McDonald's in-house staff, scattered across the world, are briefed with the broad corporate positioning and key messages to ensure the same level of consistency in communications as can be found on the restaurant menus. However, precisely how the messages are to be delivered is not imposed from above. The teams on the ground - and where they use them, their local agencies - are able to adapt programs to suit the prevailing cultures and market conditions.
Courier company United Parcel Service, based in Atlanta, prefers the single agency approach to global PR. It has a long-standing relationship with Edelman and uses that firm in most of its major world markets. However, UPS recently switched to Fleishman-Hillard to get some fresh thinking in the US.
Using a single global agency produces certain benefits in global practices, according to John Flick, UPS director of international PR. Global communications are coordinated out of Edelman's New York office, with senior vice president Judi Mackey in charge.
'There are efficiencies in using one agency,' he says. 'If a blueprint works, you can allow all agencies in the network to customize it to suit their markets. I'm the gatekeeper. But at the same time I acquiesce to the individual countries in know-how about doing PR in those countries.
'We give very generic main messages and then we challenge the agencies and company managers around the world to come up with ways of making them work in particular markets.'
For PR purposes, UPS and Edelman split the world into three regions: Europe, Asia and Latin America. There is a lead Edelman office for each region: London for Europe, Singapore for Asia and Miami for Latin America.
'I don't think there is a universal template for effectiveness at getting out a clear message,' says Flick. 'But whenever we enter a new market, Edelman is our first stop. We have a long-standing relationship with them.'
Every month, each agency updates the client on market and message developments in its respective countries. UPS operates in 200 countries using a total of 26 agencies.
The relationship between UPS and Edelman has lasted a decade, but it has not been without occasional problems. The UPS management in Germany did not see eye-to-eye with Edelman's team there. Flick allowed them to replace the agency with ABC Dusseldorf, part of the Euro RSCG International Communications network. 'You can have really strong players but if they don't get along with your local managers, that's a challenge. That was the situation in Germany,' explains Flick.
With the exception of Germany, the single agency approach has been effective for UPS, according to Flick. He's comfortable that the key corporate messages are being conveyed faithfully and consistently. Four broad messages underpin UPS's worldwide communications. The carrier wants to be perceived as hi-tech (offering internet tracking of shipments), global, a facilitator of trade and a good corporate citizen.
'The biggest mistake in running a global operation is to assume that one size fits all. In some markets you may not need a Cadillac; an Opel could be the right choice,' concludes Flick.
Imation, the Minneapolis-based information and imaging company that in July 1996 was spun out of 3M, also prefers a single agency solution. Its choice is Fleishman-Hillard, with headquarters in St. Louis.
'What we get from the Fleishman-Hillard network is quality and consistency. There's tactical and strategic support when we need it,' says Brad Allen, Imation vice president corporate and investor relations.
Best-of-breed at IBM
IBM's preference is for a best-of-breed model, selecting the PR firms it judges to have the most outstanding credentials for each individual market and then finding ways of ensuring consistency and cooperation.
Senior in-house PR practitioners meet to discuss the agency situation.
A global communications task force recently reached the conclusion that there was no need to change approach.
Across Europe, the multi-agency model has been given an intriguing twist, however. For the past four years Ogilvy PR Worldwide has been working with IBM Vice President Communications, Europe Middle East & Africa (EMEA) Joerg Winkelmann as an umbrella communications agency for the region. Ogilvy helped put the multi-agency network in place for its client and plays a vital coordinating role out of Paris and London.
All told, there are 23 agencies in the EMEA regional network, including Brodeur A Plus and Charles Barker BSMG in the UK; Brodeur Kohtes & Klewes, Germany; Image Time, Italy; and Information et Enterprise, France.
'We refer to it as our global communications management model,' says Ogilvy UK managing director Lyle Closs. 'You get the flexibility of a network that can be changed to suit the changing requirements of client management in different countries. It gives the client strong control when developing core strategy and positioning and rolling that out across an established network.'
If there is any consistency in these solutions, it is the desire to provide some of the benefits of a single-agency network without alienating country managers by imposing a global agency on them. In extreme cases, if an agency within the network fails to perform, it can be replaced.
The final word on globalization goes to Paul Dickard, public affairs director of New Jersey-based Ingersoll-Rand. 'From a corporate perspective you do not want to risk the possibility of mixed messages and uncoordinated efforts.' Whatever model a client company chooses to facilitate its global communications, this must surely be the prime objective.
Global strategies: IN-HOUSE vs BEST-OF-BREED
Mike Gordon Vice president, international communications McDonald's
Approach: Strong in-house operation, supported by agencies
Number of countries in which organization operates: 114
Number of agencies: 50
Global communications philosophy: 'It's our feeling that communications is a key function in the whole mix of management and its ability to achieve its vision and goals for the company. This need is probably growing.
'We like to say that we're in the room when the decisions are made. Where it works best, communications has a seat at the table. That's very difficult to do if you are outsourcing the function to PR firms.
'There are global game plans and blueprints. Each country looks at what's available in terms of support programs and then adapts it and makes it work. The phrase we use is 'one message with many voices'.'
Vice president, communications IBM Global Services
Approach: Multi-agency solution
Number of countries in which organization operates: 160
Number of agencies: more than 40
Global communications philosophy: 'Our business groups are free to select their own agencies, and they do. It is all connected through a corporate communications executive council, which coordinates the external relations to major media and the trade. Our corporate purchasing process in general is so good that it has now become a business solutions IBM markets externally.
'I led a taskforce looking at global communications and we reached the conclusion that we could coordinate our agencies successfully. We are a very globally-minded company and it is ingrained in all of us that we are not US-centric. We recognize that a lot of our growth in the future will be from outside the US.'.