Afexa and its COLD-FX product were the official cold and flu remedy of the 2010 Winter Olympics, and the project was an example of integration between marketing and PR for the company. The health sciences and technology entity has traditionally relied on PR when it comes to building buzz and growing the business, says Warren Michaels, VP of communications. Yet as the company – and its marketing budgets – grew, it started to integrate the two disciplines.
“The company was built on PR,” he says. “We work hand in glove,” and when the marketing team worked on its Olympic sponsorship and partnership, it brought the PR team in to leverage those athlete relationships and build buzz. The PR team was able to not only get the athletes on TV, but also got them to do media outreach.
MaryLee Sachs, US chairman and worldwide director of marketing and communications for Hill & Knowlton, says she sees marketers turning to their corporate communications colleagues more and initiating this integration.
“They are realizing that their sales suffer if they have a bad reputation or an incident that affects a brand's image,” she explains. “Marketers are starting to understand that it isn't just about the consumer; it's about the employees, it's about other influencers, it's about everyone who comes in contact with the brand.”
As companies become more integrated across their communications, many are seeing a bigger role within the company, or the proverbial “seat at the table.”
“Afexa has adopted the attitude that PR is a critical part of its development,” Michaels says. “As a consequence, PR has always reported directly to the CEO.”
But not all corporate communicators are as lucky as Michaels; many deal with budget restraints, new social media stresses, added responsibilities outside the traditional definition of communications, and misunderstandings about their jobs from colleagues and the C-suite, according to the 2010 PRWeek/Hill & Knowlton Corporate Survey, which polled 191 corporate communicators from a variety of companies and industries.
As part of the survey, respondents were asked about the three challenges that cause the greatest stress in their jobs. Fifty-eight percent report budget constraints, 53% say managing internal silos and departments, and 50% say keeping up with social media innovation.
Respondents also reveal that reorganizations and pressure to better foster integrated communications were main causes of this stress. Several believe too many silos within a company hinder good crisis communications, slow down work, and fragment communications so it is harder to get proper funding. Beyond the alignment issue, one respondent notes that he also deals with “miscellaneous tasks that are given to the team because nobody else in the company is responsible for it.”
How the job has changed
No one would argue that the job of corporate communications has changed in recent years, but the reasons vary. Some cite the changing media landscape. Others say juggling the world of social media is the main reason. Continuing challenges also include how to measure the impact and success of PR and communications, as well as how to have more alignment and integration with marketing.
Sachs says the past 18 months to two years has seen further alignment between PR and marketing. “From a corporate communications perspective,” she explains, “it's getting broader exposure within the organization and is being seen as driving not only reputation, awareness, and all the key metrics we typically associate with PR, but also as a driver and contributor to business results.”
Companies define the alignment between marketing and communications differently, but mainly it is when the two disciplines work closer together, providing more consistent messaging and branding. For James Boyd, VP of PR for the Americas for Singapore Airlines, that is a main reason to increase alignment within marketing and communications.
“The biggest asset this company has, outside of its people, is the brand, one that has been consistently and meticulously honed over the last three decades,” he says. “Our activities are coordinated and we are aligned as much as we can, where it makes sense. Our goal is to build and maintain the reputation of Singapore Airlines.”
This idea of alignment is informing the structure of corporate communications teams. At the start of 2009, BMW moved to a more globally organized communications function, where Tom Kowaleski, corporate communications VP, reports not only to the global communications head in Germany, but also to the CEO of BMW North America. His team is more involved with sales and marketing than he has seen at other corporations, he adds.
“Often, from the headquarters' perspective of communications, you are necessarily, and very meaningfully, dealing with setting a long-term agenda and a long-term communication of messages and information that supports the future positioning, direction, and position of the company,” says Kowaleski. “But in a region, you're doing that additionally with helping to generate revenue for the company every month.”
When it comes to driving the communications calendar (announcements, product launches, and so on), 45% of respondents say it is led jointly by communications and marketing; 39% say corporate communications; and 12% say marketing.
With products, marketing leads 41% of the time and communications 17% of the time, while 36% of the time, it is the two departments combined.
There are many tactics and tools that companies use to align these two departments more closely, including holding joint meetings, working together with an external PR agency, working in the same area in the office, and informing the other team of plans and projects.
Sachs says she notices clients coordinating more with marketing teams, though the agency sometimes has the marketing team as a client and other times the corporate communications team.
Lynn Mann, director of external communications for Michelin North America, says she has PR managers who report to her who are embedded in the various business units, product lines, and brands. That allows communications to have a presence in the day-to-day marketing and planning for various elements of the company. She then reports up to VP of corporate affairs Michael Fanning, who reports directly to the chairman and president of North America.
“Our Michelin leadership values the role of communications and chooses to invest and support it,” Mann says. “Having that seat at the table, and having communications intimately involved when the company as a whole makes decisions is exactly the best model.”
At CBS, the marketing and corporate communications team all work in the same floor of the office, notes Gil Schwartz, EVP and CCO of CBS, who adds the communications structure at CBS is “both centralized and de-centralized.” The teams, whether they handle publicity or communications for sports, news, radio, or more, all report up to him, as well as through their operations people.
“They are a double solid,” he says, “but there is definitely a national department that ultimately is unified under the CBS flag.” Schwartz, then, reports directly to the CEO.
“I'm not a believer in PR reporting to marketing, HR, or any other function,” he explains. “In order for PR to be at its most effective, it simply has to report up to the CEO.”
The survey found that 51% of respondents said the most senior global PR or public affairs person in their company reports directly to the chairman, CEO, or president, while 19% report to a CMO, and 6% report to a COO.
“There are so many facets of what we do in PR, from internal communications to IR to crisis and issues preparedness and management,” says H&K's Sachs, “and those functions really should be reporting to the CEO.”
Looking at the reporting structure for the communications department, 36% of respondents say PR sits within corporate communications and, while it interacts with marketing, there is no reporting line from PR to marketing. Twenty-three percent report that PR and corporate communications are totally integrated into marketing, and 14% say some elements of PR are integrated into marketing and some elements sit within corporate communications. Additionally, 12% say marketing is completely integrated into the corporate communications function.
Sachs sees several reasons for this increased alignment among companies, including an increased importance placed on reputation by the C-suite, social media, and how reputation affects sales and a company's bottom line. In fact, 61% of respondents say more attention is being paid to reputation management from the C-suite over the past year.
“Social media is one of the biggest contributors, but the bigger contributor is this concept of reputation affecting brands,” she notes. “It's not just about social media; it's about how consumers and other audiences are engaging with the brands across different disciplines and media channels.”
Social media is another element that is adding to integration, as both marketing and corporate communications are fighting to take the lead in this constantly growing area. Additionally, social media strategy and execution is often led by teams made up of several departments and individuals from within a company.
As far as who spearheads the social media vision and strategy for their organization, 44% say the corporate communications team, while 13% report marketing, and 29% cite a blended team selected from specific functions such as communications, HR, and marketing. Another 4% say they also have a blended team, but with people who are interested in social media, regardless of their department, and 7% report they have a team with some people from specific departments and some who are just interested in social media.
Ryan Donovan, senior director of corporate communications, Web, and brand for SanDisk, says social media should fall to the corporate communications team because “we're responsible for the reputation of the company and social media really is reputation-centric.”
Corporate communications also has experience running long-term agendas and messaging that lends itself to this world of social media that is going beyond campaigns, Sachs says.
“If you're going to engage on social media channels,” she adds, “you have to understand it's not a one-off hit, it must be something sustainable.”
But social media is not just affecting integration, it also requires more time and resources from already resource-strapped teams. It must constantly be monitored, not only for news and comments about a company or brand, but also for the latest and greatest social media tools.
Donovan agrees the challenge with social media isn't always about who owns it, but more about how it truly impacts the brand and the company's performance.
“We know people want to engage and are relating to the brand,” he says, “but we have to figure out how we translate that to revenue?”
And while new tools, such as the iPad, are joining the ranks of Facebook and Twitter as necessary for a company, social media also lends itself to helping companies with measurement and analyzing how consumers perceive them.
“Increasingly, we're looking at new tools in the social media space, and also more market-mixed modeling-type methods, where we can start teasing out the effect PR has on the business results,” Sachs says of how H&K is using social media with its work with clients.
Measurement is one issue that still perplexes corporate communicators. Proving ROI for PR and communications initiatives can be tricky, but is often the way they are able to secure budgets and funding.
CBS' Schwartz says his company measures success “by the pound,” and analyzes media coverage, hoping for more column inches for good news and product launches, and fewer column inches for the controversial stories.
Another communicator, who leads North American communications for a global company, but preferred not to be named, agrees: “A lot of what I'm doing in the issues space is very measurable. You're able to clear a hurdle or avoid a major challenge to the brand.”
A variety of measures
All communicators agree that it's not just about the quantity of media coverage, but also the quality.
“We try to measure PR success as many different ways as we can,” says Michelin's Mann. “We look at traditional measures like ad equivalency compared to PR spend. But we also look at audience numbers. We look at qualitative measures, of key message penetration. Did we achieve the key message penetration in our target media? It has to be a combination of quantitative and qualitative.”
Afexa's Michaels notes that he looks at media impressions, but then analyzes the tone, how much the company was featured, and whether it was mentioned in a relevant outlet, like a medical segment or publication.
Of survey respondents, 82% set aside 10% or less of their budgets for measurement. When asked what performance is measured against, 71% say media coverage metrics, 67% say getting in or staying out of key media outlets, 51% say consumers' or customers' perceptions, 40% say Web traffic, and 34% say sales, which is how BMW measures.
“Sometimes the messages and elements of long-term strategy can't be so on-point to help you move products,” BMW's Kowaleski says, so working with marketing can combine consistent messaging with daily sales success.
Donovan says SanDisk looks at several long-term measures, focusing on the health of the brand. Looking at social media, it analyzes consumers' opinions about the brand, and it also commissions a brand tracker survey every year, which “gauges the success of the brand in the mind of our consumers in about 14 countries,” he adds.
“In the US, we recently found our brand awareness is up 10% year on year, which is huge,” Donovan reports. “We do not do corporate-level advertising. So everything we're doing in PR and social media, which I believe is really one discipline, is clearly having the right kind of impact.”
When companies are able to show solid results from PR and communications, it is easier to convince the C-suite that the budgets for the space are necessary.
“We are continuing to raise the level of metrics and analytics so we can prove the value of our spend,” says Mann.
Budgets for communicators surveyed were nearly split down the middle, with 56% reporting their communications and PR budget for 2009 was $1 million or greater and 45% reporting their budget was less than $1 million. Forty-nine percent say their budget will remain the same in 2010, with 35% expecting an increase and 16% expecting a decrease.
“Clearly our budget was reduced in 2008 and stayed at that level in 2009,” says Blythe Reiss, VP of communications for the Americas for Electrolux. “I saw some uptick, though not dramatic, in 2010. And I'm guessing my 2011 budget will be in line with 2010.”
Cause for optimism
Most say they are still dealing with trying to do more with less, but there is more optimism. Donovan says SanDisk's PR and communications budgets have been flat to slightly up ever since they were cut in 2008.
“We've seen a shift in how corporate communications is both viewed and valued within companies,” he notes.
Kowaleski agrees: “The real challenge for communications is grasping the opportunity in front of us: to be much more of a source of knowledge about what goes on in the outside world; a source of knowledge about how our various constituencies think about us, relate to us, interact with us; and then being an integrator to provide perspective and counsel to the senior management in all business decisions.”
“The challenge we have is to remake our function according to the opportunity this turbulent time has given us.”
The PRWeek/Hill & Knowlton Corporate Survey was conducted by PRWeek and CA Walker. E-mail notification was sent to about 4,314 corporate comms pros, with 191 taking the survey online between June 2 and July 9, 2010. Results weren't weighted and are statistically tested at a 90% confidence level. This article only offers a summary of findings.
Singapore Airlines: approach to measurement
James Boyd, the VP of PR for the Americas for Singapore Airlines, calls measurement “the $64,000 question within the industry.” When the company introduces new products or a special deal or fare, it uses a specific code to keep track of how it spreads.
“PR will be the only means of communicating,” he explains. “This gives us the ability to track exactly how many dollars changed hands based on the communications.”
On social media, the company uses Twitter and Facebook and looks at FlyerTalk, an online community for frequent flyers, to gauge how customers are interacting with the brand. It also watches “with hawk-like precision,” the annual surveys in Condé Nast Traveler and Travel & Leisure.
“The surveys ask travel-related questions of people who are very solid travelers, long-term travelers, sophisticated travelers,” says Boyd. With these third-party industry surveys, the airline can also see where it ranks compared to other competitors.
Staffing: social media
Companies staff up their social media teams differently, with some pulling from corporate communications, some from marketing, and some a mix. Billy Sanez (right), director of corporate communications at American Airlines, only added “and social media” to his title over the summer, though he has been leading it unofficially for years.
The official change, he says, indicates the importance the company puts on social media and how corporate communications can use both its proactive and reactive qualities.
But for Electrolux, which is headquartered in Stockholm, the social media strategy is kept within a separate group in the Web area, says Blythe Reiss, VP of communications, Americas. The company is hiring from Google and other tech companies.
“We do a lot with social media around the globe,” she explains. “There are differences by country, but the strategy is guided out of Stockholm.”