PRWeek hosted a virtual roundtable via blog technology with ten agency leaders from around the globe. Julia Hood and Keith O'Brien moderated the discussion.
PRWeek: Are you seeing more accounts crossing regions? Are many of your major accounts with companies that are based elsewhere?
Flavio Diaz (Fleishman-Hillard, Mexico): I think that the trend is to identify local talent more than forcing or even encouraging local management to assign accounts to global agencies. When local talent within global agencies matches what the client needs, it's is the best of both worlds. I believe that in PR, contrary to what happens with advertising, market conditions, local idiosyncrasy, even the political and social environment set the course to manage image and perception of companies and brands. For Fleishman in Latin America, most of our business comes from local clients.
Robyn de Villiars (Arcay Communications/GCI MD, South Africa): In Africa, home ground advantage cannot be emphasized enough. Things happen differently from one country to the next although with a regional commonality in some instances. Clients tend to get the best results through a combination of continent-wide strategy setting with local implementation according to local requirements. Project management on a continent-wide or regional basis is also important.
It is quite common for multinational organizations to use South Africa as their African hub and as their springboard into the rest of Africa. We work with a number of multinationals from their SA offices who utilize our network of agencies across Africa. In addition, we have large clients for whom we co-ordinate both public affairs and public relations work across Africa who don't have any representation on the continent at all.
The major portion of our business, both in South Africa and in the countries in which we operate in Africa is local business still today.
Heidi Sinclair (Burson-Marsteller, Continental Europe): Many companies that we work with are moving toward a pan-regional, or even a global approach to their communications. They are looking to be able to roll out messages, initiatives and campaigns with better synergy and alacrity.
Charley Levine (Ruder Finn, Israel): With the exception of our work for some respected multinationals such as General Electric or Pfizer, we find that most of our work runs in one of two directions: The Israeli companies, often hi-tech ones, that are seeking identities and markets overseas; and overseas companies that do business in Israel and are almost singularly interested in our domestic consumer market.
Pierre Azzam (Porter Novelli, UAE): Across the Middle-East region and particularly in the Gulf states, we are witnessing significant growth of multinational accounts engaging in PR at a regional multi-market level. While this has been a constant trend for the past two decades in other communications disciplines such as advertising, the same has started to become a reality in the PR industry, more so in the last 8 years.
Globalization and across-border marketing communications deployment is surely a significant driver of clients businesses regardless of business sectors. So it is only natural that corresponding PR activities follow suit. Within this trend, we are seeing increasingly central decisions taken at global HQ levels being aligned at regional and/or local levels with PR becoming more of a compulsory component of a multinational's marcomm strategic mix with operating templates being unified across the world.
For Porter Novelli in particular, 90% of the accounts we handle are multinational blue-chips like Gillette and Siemens. With most of them, global alignment is a significant but not always a determining factor in agency selection. In reality, many such organizations provide a PR mandate from the center but a large number of them leaves the agency selection decision at regional or local level, the objective of which being to allow for regional/local accountability on business results to be supported by a local decision on best-of-breed agency selection.
James B. Heimowitz (Hill & Knowlton, North Asia): At H&K we are finding that our Global Network is becoming increasingly important to many of our clients.
In China for example, many large conglomerates such as PetroChina have sophisticated and complex communications needs from IR in Hong Kong to media communications in China and Corporate Governance issues in The US Companies like this need a global agency with a network that works well and a full spectrum of capabilities and services
Andrew McGregor (Text 100, Asia Pacific): I see a majority of our clients seeking a single agency relationship in the region.
At July 31, 2003, 36% of Text 100's clients worked with Text 100 in more than one market. By July 31 2004, almost 42% of Text 100's clients were being supported in multiple markets. This percentage is expected to rise to 60% this year.
I find that our clients are driven by a common challenge; consistency of service and quality. Asia Pacific consists of incredibly diverse markets; from the established first world market of Australia to the rapidly developing market of China.
The maturity of the PR function also varies greatly. In Japan, outsourcing business services is still largely a pioneering activity, resulting in a range of less orthodox client expectations. In India, demand for service is so strong that senior talent is courted endlessly.
All of this complexity spells a headache for global companies. The right supplier, preferably a single entity, can save a lot of grief (or at least help share the pain).
However, I would agree with Flavio, that multiple market accounts still have to be won market by market. Many of our multiple market clients in Asia Pacific starting work with us in a single market. A global (or multiple market) offering still has its roots firmly planted in strong, consistent local service.
Rob Flaherty (Ketchum, USA): At Ketchum we are definitely experiencing an increase in cross-border activity. Our largest relationships, such as FedEx, Kodak, and IBM are growing and are less US-centric than ever. In the past 9 months we have also added several new clients that immediately asked us to serve them in multiple countries.
I agree that a need for consistency of service and quality is driving this. But I would add that the speed with which issues travel these days is also requiring tight global coordination. A product issue in a small country, for example, might have remained contained there five years ago -- now it's picked up instantly by media in major markets. Increasingly we are partnering with clients to monitor, anticipate and respond to these issues wherever they arise.
Laura Schoen (Weber Shandwick, USA): In healthcare, almost 60% of our business in multinational. A large number of accounts are shared among offices in the US and overseas. The international nature of healthcare forces us to have a strong healthcare practice around the world. A few of Weber Shandwick's major international clients, in the healthcare arena, are based outside the US. France and the UK are two strong hubs for pharmaceutical companies.
I am surprised by the number of new opportunities in healthcare in 2005. Each year we see a large volume of RFPs in the fall and around the summer months. It has been a continuous flow of calls in 2005. I know other colleagues have experienced the same. It says something about the strength of the economy. Companies seem to be more appreciative of the value of PR as the healthcare environment evolves.
PRWeek: How would you describe the economic conditions in your region, and the PR business in the region compared to one year ago?
Diaz (Fleishman): Latin America in changing dramatically. While in markets like Chile, Mexico and Brazil remain growing and stable, others like Venezuela, Peru and Bolivia are going thru serious social, political and economic challenges. In the largest markets, Brazil and Mexico for its sheer size, and Chile being a small but very sophisticated market, our business is pretty much alive and booming. In the particular case of Mexico, growth this year will be double digit with better budgets and more complex assignments to agencies.
Key growth areas in Latin America are crisis management, social marketing communications, investor relations, healthcare communications and public affairs.
McGregor (Text 100): Business is flourishing for Text 100 and its compatriots in Asia Pacific. We've opened four offices in Greater China alone over the last three years. Of the 13 offices we now operate in Asia Pacific, we're currently modifying or updating leases for at least seven to accommodate growth.
Despite popular perception, this growth isn't restricted to China, as we've seen almost every market reporting record results for more than two years. India is booming as its reforms grab world attention, while smaller markets like New Zealand benefit from a greater focus on Asia in general. Our rivals are clearly experiencing similar growth.
While market projections remain positive, I do think it foolhardy to assume that record growth will continue indefinitely. Predicting when the curve will finally start to flatten will be fun!
PRWeek: The potential of the PR market in China is a hot topic. How mature is the PR market, truly?
Flaherty (Ketchum): The discipline is developing rapidly in terms of increasing sophistication. For example, our IR capability in China is among the most sophisticated in our network and has a growing business representing Chinese companies listing publicly for the first time.
Economically I believe it is far from mature -- meaning it has only begun to grow. This is the year European and US companies really got serious about China. Until now those companies that focused on China were pioneers. Now everyone is in. Responding to this, we have just added a sixth office in China, in Chengdu, and we just transferred one of our executives from London to serve as director of our Shanghai office.
McGregor (Text 100): It's as much an art as it is a science determining the right level of investment in a rapidly growing market. I currently reforecast the performance of every office in China monthly. At times I've reworked the numbers up to three times in a single month. I do this not only to avoid overshooting but equally to avoid under investment.
De Villiers (GCI): It is always hard to make an African-wide statement about anything. As you will all know, there are countries in Africa which are flourishing and others which are ravaged by war. In the main markets in which we work, things are stable economically with some economies, like that of South Africa, showing great improvements in key areas.
The PR business in Africa is growing in strength in most major markets, in some instances albeit from a very limited position. PR expertise is surprisingly good in many of the markets in which we and our clients work and it is a pleasure to do business with the PR professionals who operate in these countries.
In South Africa there is a growth in both consumer and shareholder activism which is influencing a stronger emphasis on effective communications by most organizations. The focus on sustainable development is also leading most corporates to focus on their CSI activities.
Azzam (PN): By-and-large, the Middle-East region has been witnessing an economic boom thanks to increased energy prices and the various government initiatives driving economic diversification from oil. This is resulting in an explosion of multi-sector investments leading in turn to increased marcomm needs.
PR is taking its share of this growth coupled with the fact that the discipline is becoming more understood by clients and its added-value better defined and increasingly appreciated. This is leading to a sudden emergence of "new PR clients" who are starting to integrate the discipline as a core tool within their marcom mix, whereas in the past, it used to be treated as a luxury or be employed sporadically and tactically.
PRWeek: How are the biggest accounts managed across regions? Do you have client relations managers (CRM) running these pieces of business?
Flaherty (Ketchum): All of our largest accounts have a global account director. We recently held a meeting of the 30 top global account directors at which we reviewed dozens of best practices to better coordinate globally, to monitor issues, to build the client relationship and to merchandise the value of the function to client management. Our global practices are also a very effective vehicle to mobilize teams for clients and share the latest developments in each category.
Sinclair (Burson): We have had a program in place for over 10 years that specifically is designed for large global clients. The program is based on the client leader model. The global client leaders have the ability to work across regions, practices to serve their clients. I happen to be the global client leader on SAP as well as being a regional CEO.
We do have CRM for our largest clients, although not always they are based with the client. Most clients in Latin America are not large enough as to have a CRM assigned by account. We, however, have quality assurance programs that allows to keep close track of project results, client satisfaction and expectations on both ends.
Schoen (WS): Our large multinational accounts are managed with the goal of supporting our clients in all key markets. We try to have people available in different time zones, to provide 24/7 service. Sometimes, we appoint one person to be the client leader. Other times, we have a client leader per region in Europe, Asia and the US
McGregor (Text 100): Our largest key clients have dedicated CRM teams. Take our largest global client, IBM, as an example. We support it in 17 markets, which in turn are grouped into three regions. Each region has its own dedicated Client Advocate, who in turn reports to a global account lead. These individuals provide communications counsel, manage regional and global team coordination, promote best practice sharing and drive general CRM services.
These people are based in our offices, but obviously spend a lot of time on the road with local account teams and client executives.
We do a lot of work up front setting realistic expectations about what to expect when working in Asia long before clients appoint us. In our experience market forces and cultural differences have a significant impact on the style, and at times substance, of PR campaigns across the region.
Helping clients understand these differences reduces the risk of dissatisfaction later on. As a global organization ourselves, we've already discovered common traps and pitfalls while working with previous clients or within the confines of our own organization. As a result, I can offer clients a single point of contact with an established knowledge of Asia's markets. Clients can leverage this person's hard won knowledge, avoiding their own costly errors. I'd like to believe that this counsel alone demonstrates the value of a global agency.
You ask what's required to make a client feel more comfortable. Demonstrating the value-add I've outlined above is one such action. I also share examples of how we leverage our network to improve campaign results, maintain quality or improve the performance of local teams struggling with a specific mandate.
For many clients, knowing that you have the resources to resolve future challenges is almost as important as a prerequisite understanding of dynamics that drive a local market. A global agency we can draw on the talents of individuals and organizations far removed from the local fray. In the past I've flown staff in from our New York office to assist a team in Beijing, or flown staff from India to assist a team in Singapore.
Azzam (PN): Most accounts we manage in the Middle-East are regional in scope and are served across the multiple markets within our territory.
For those, the account management governance resides at Impact Porter Novelli's regional headquarters in Dubai where a regional team is appointed to lead and coordinate the business across the area. This team sets the standards, quality and pace and works closely with additional teams in the field offices to deliver an integrated and well synchronized service in-market.
We do also handle another set of businesses in each of our network offices. There the mission is purely local and is delivered through local teams.
These teams are based at the agency although they spend a significant time at the clients' offices.
De Villiers (Arcay/GCI): When working on campaigns that run across several countries in Africa we tend to have a central project management person in our office in Johannesburg SA who is the main client contact and also the main point of contact for our country Arcay Communications Africa network partners. This person is responsible for ensuring that the strategy agreed with the client is implemented in the most appropriate way in country.
Experience in working in Africa with our partners allows us to flag potential implementation issues, cultural differences, style differences etc with the client both upfront and as we progress the implementation. This know-how is worth a lot to clients and they appreciate the advice we are able to provide in this way.
PRWeek: What trends are you seeing in hiring in your region? Is there a lot of homegrown PR talent?
Heimowitz (H&K): [Our firm] is employing a new kind of PR practitioner in the region, and have been actively recruiting "non-traditional" hires.
Our Beijing office is headed by Esmond Quek who is a seasoned regional marketing and brand executive. We have recently launched new practice groups in "integrated branding" (headed by Advertising guru Pui Pui Poon and "Government Relations" (run by seasoned strategy consultant Ye Yu) for example. Basically, H&K is responding to the market's need for senior level strategic advice in communications. And, the response has been overwhelming...Our business has doubled in the region since we adopted this strategy less than a year ago.
Diaz (Fleishman): Talent is scarce in Latin America. Sadly for Argentina, the economic situation there have enriched mostly Brazil and Mexico with highly qualified emigrating Argentinean professionals. In the search of talent, besides the agencies, our clients and even the media are looking for top-notch professionals. Just in Mexico, in the last four years, four Fleishman executives landed jobs with our clients. An effort must be made to attract more and better students into marketing, communications and journalism careers.
A growing number of Americans are interested in working in large regional markets like Mexico and Brazil, but on the other hand, our local guys also want to try-out the US marker. At network level, Fleishman has a well tuned system that allows for international assignments and transfers. In fact, in Mexico we might be loosing a highly experienced AE to our Dallas office soon.
McGregor (Text 100): Talent is equally scarce in most Asia Pacific markets. In Asia alone we've hired more than 60 people in the last 12 months. These people aren't easy to find. We've had to become more and more creative about sourcing them, as well as smarter about retaining them once they join.
I'm often reminding my staff that you can't double the size of an industry overnight and expect to find twice as many people with a decade of industry experience. We have to also accept that extensive training and development is a key business constraint. Our industry risks endlessly cannibalizing its best people if it doesn't also own the challenge of growing new talent. I still see too many agencies simply poaching staff from each other. Nobody is a winner in this scenario.
PRWeek: Are there benefits to importing talent?
McGregor (Text 100): Importing talent is rarely a long-term solution. We like to import talent when the opportunity and personality generate an ideal match. This can be a short term solution whenever specific vocational skills are lacking or additional skill role modelling is required. CRM improvement is one area we'll commonly apply ex-pat resources. In this situation imported talent can play the role of a mentor to the local team, and role model client relationship skills requiring a polish. Ultimately its our aim to impart these skills to the local team. To apply a parable, it's the principle of teaching someone to fish for themselves rather than merely feeding them fish.
De Villiers (Arcay/GCI): I think that local knowledge is incredibly important to effective communications, especially across a continent as diverse as Africa. However, cross cultural input is always valuable and therefore creating a balance and putting together a correctly mixed team is critical to success.
When we participate in global employee exchanges with our partner offices, South Africa is always way up the list in terms of most frequently requested destination - I, of course, understand why!
Having staff from other offices work with us for a period, either on a general exchange or on a particular client assignment is very valuable and helps to spread knowledge throughout our networks.
Azzam (PN): Across the Arabian Peninsula, our people are primarily a mixture of Western and Arab expatriate talent drawn from across the world with a handful of local faces. In the Levant and North-Africa however, the agencies by contrast are generally locally staffed. So in a nutshell, national talent is scarce in the Gulf and more available in the other sub-regions. But I guess the major issue our industry is facing (so is the case in other communications disciplines) is the scarcity of "great talent". Our business is highly intellectual and does demands a unique blend of skill sets and attitude, often difficult to find. This is why we dedicate substantial resources towards training and staff retainment to ensure we produce and keep a breed of intellects who can add tangible value to our clients' businesses.
Flaherty (Ketchum): I agree with all of the comments about real talent being scarce. This is particularly acute in emerging markets like Eastern Europe, where the amount of work is outpacing the available workforce. We are seeing some success transferring talent from one region to another and we're hiring a lot of people with truly global backgrounds. One example is Bill Delaney, who was the Beirut and Boston bureau chief for CNN before joining us a few months ago.
PRWeek: What is most difficult about navigating the global media environment right now?
Diaz (Fleishman): Deadlines are more difficult to manage and there are no more "local" or "regional" news. Everything is on the wire services on real time making spokesperson training, media response programs and crisis preparedness and response more relevant than ever. By the way, languages are no longer an objection or a barrier or fence, with government officials, business and opinion leaders, NGO's executives and the media largely bilingual, English equal Spanish.
PRWeek: Given that most news can be accessed anywhere in the world in this global media market, is there less of a need to tailor clients' messaging to a particular market?
Flaherty (Ketchum): No, there is still a requirement that you tailor your news to each local market. I think Flavio is citing how quickly news jumps across borders. There may be even more of a need to tailor your message for this reason: Producers and editors are more overwhelmed than ever -- there are more sources of news coming at them, we live in a 24-hour news cycle, yet they have a smaller staff, due to tighter financial control of the newsroom. Consequently, the only news from our clients that gets through is news that really addresses their viewers or readers.
Sinclair (Burson): The internet has created no-boundaries media, not just new voices and a 24 hour news cycle, but the ability for traditional media to source their work easily. You can't control a story, so you need to learn to work with the understanding that managing the story requires different methods than before.
De Villiers (Arcay/GCI): I agree absolutely with Rob's comment on needing to tailor your messages even more given the huge increase in information available to the media. I also believe that sound relationships between client representatives and the media are more critical today. The media are deluged with information and need to know that they can get good insights and accurate information from someone they can rely on.
Of course, not all parts of the world have equal access to the internet and to the tidal wave of information and this also needs to be taken into account in terms of working with the media. Our experience in a number of countries in Africa has shown that there are still journalists today who have to go to an internet cafe to be able to access the internet and have to pay for this out of personal resources!
Levine (Ruder Finn): I'm not at all certain that some uniform media environment exists. I can state that Israel, with the third largest concentration of global journalists, is an absolutely one of a kind place to practice public relations. The 500 reporters and bureaus are here for the politics and the occasional violence, but the operative point is they are HERE. They all need to file, they all need to justify offices and infrastructures. We have worked closely with this unusual circle of talented, opinionated professionals for decades--with outstanding international placements consistently secured for our clients.
Schoen (WS): The biggest challenge we face is the anti-pharmaceuticals attitude among members of the media around the world. Another challenge is the limited number of truly international media outlets.
Azzam (PN): Globally, the increased power the media are enjoying in shaping public opinion and the increased importance in proper and efficient exploitation of these media in profiling clients' reputation and image with a media audience that increasingly challenges opinion and messaging. This for me is good news as it continuously raises the bar of PR consultancies work standards.
Separately and in some regions around the world and surely in the Middle-East, the main challenge the media face is proper and credible auditing. Long gone are the days where a publication or broadcaster can prove their performance through claimed circulation or viewership. While media research is widely used, there is still a need to better regulation of such research. Specifically for print media, third-party auditing is becoming a must and this is now starting.
PRWeek: Are there any issues attached to being part of a large American company, operating overseas? What about your clients that are American companies?
Diaz (FH): Possibly in Venezuela and only with government officials. In the rest of the region being an American, global communications company is a plus. The perception of being on the edge of business communications and the image of professionalism that large American agencies enjoy allows for agency image building, better branding for communications products and access to the best new business opportunities.
Schoen (WS): Unfortunately, there is a growing anti-American sentiment in many parts of the world. In general, it is something we overcome with knowledge and cultural sensitivity I have found it to be more of barrier in markets like France and the Middle East
Azzam (PN): Not at all. Despite what you may see and hear, the region here accepts many of the realities of working in a global industry. Most of the big international businesses are in fact American or American-related. For us in PR, this represents no issue whatsoever. At the level of consumed goods, the region has gone through a phase of anti-Americanism but this is now gradually dissipating.
De Villiers (Arcay/GCI): I believe that our American clients are, in the main, conscious of the potential for anti-Americanism and therefore this is built into their thinking and ours in terms of how we handle things in South Africa and Africa. The consciousness tends to ensure that we don't end up with issues to deal with.
PRWeek: What innovations in global PR are you seeing? Where does the industry still need to innovate?
Flaherty (Ketchum): Our clients are very interested in the changing media landscape. They want to know how, why and when to use blogs, podcasts, RSS, mobile marketing (through cell phones) and other emerging technologies. The penetration of these technologies varies by region. While the US lags behind Europe in mobile marketing, it leads in podcasting, due to market penetration of iPods and other MP3 players. We recently created Ketchum Personalized Media, a new global service, to address interest in these areas.
As for areas we still need to innovate, some would say measurement. But I think that more than "innovation" in measurement we need to standardize. A globally accepted standard to measure outputs and outcomes of public relations programs that would be used by client organizations and agencies alike to show our return on investment.
McGregor (Text 100): Rob experience mirrors our own at Text 100. The impact of emerging technologies is very much on the client agenda in North America, and increasingly in Europe. In Asia we see still comparatively little focus on this matter as the region typically lags 12-18 months behind the USA in major industry trends.
Azzam (PN): At the level of client expectations, I personally believe the driving force for innovation will be around "integration". Clients today more than ever, need integrated solutions that directly impact their business objectives and/or issues. Commoditized PR will not be enough to live-up to this expectation as clients' business environment is dynamically changing.
Integration will have to be tackled on many levels but more precisely on two: multi-discipline (i.e. PR, advertising, media, promotions etc...) and multi-skill (i.e. media relations, public affairs, CSR, etc...).
Further innovation will also be required within each of these required multi-skills with the aim of sharpening the added-value they would offer. And last but not least, innovative tools in the area of measurement designed to better demonstrate this added-value PR is bringing and better promote accountability.
De Villiers (Arcay/GCI): Pierre, I couldn't agree more. I see a growing emphasis on integration as a way to achieve better results. More and more clients are seeing their overall investment in marketing and communications and wanting to quantify the returns. When the focus is on return on investment, then results are what count. Which discipline in the communications mix delivered the results becomes somewhat less important and there is less space for internal competition between the disciplines. Greater teamwork and integration result.
Anderson (Ogilvy): Just to be a bit provocative: the PR world needs to move beyond the word "integration" - the word is the language of the dis-integrated, ie really separate business structures trying to work together. The real innovation will come through a close link between insights and ideas (big ones!). Really great ideas naturally flow out and across a number of touch points well beyond the confines of one marketing discipline or another. The shift will be to put the brand-building idea in the centre and mean it sincerely.
A changing media environment, from podcasting and RSS to pay TV and ambient media just create more possibility to engage in people's lives -- there needs to be an idea at the heart of it. What excites me is the chance to mobilize and activate more effectively, by delivering a compelling message and having the chance to act in close proximity. Dove's Campaign for Real Beauty is a good example.
Flaherty (Ketchum): From my perspective, most of the major marketing communications disciplines are vying for leadership of the emerging channels and technologies. Not just advertising, but also direct marketing and CRM (customer relationship marketing), because, of course, they think of themselves as the one-to-one marketers and most of these new channels skip the gatekeepers and go direct.
I think public relations brings unique strengths to the table. Unlike advertising and most of the other disciplines that buy the presence of their message, we have always had to earn acceptance of our message. We have always had to make our message and messengers appealing enough for the gatekeepers, readers and viewers to want to select our news over everyone elses. These new channels are all about personal self-selection, so we should capitalize on this strength.
Of course, we have to evolve our skills to be effective in these new areas. For example, media relations is a core skill but these media channels largely bypass those traditional intermediaries. Which brings to mind the quote from the recent book "Tuned Out:" What if journalists are gatekeepers in a world without fences?