What does a PR agency actually do?

It would be fascinating to peer into the communications department at Visa and assess morale after the company decided to pretty much dispense with PR agency support for its operations around the world.

It would be fascinating to peer into the communications department at Visa and assess morale after the financial services company decided to pretty much dispense with PR agency support for its operations around the world.

The 90-strong department of the Foster City, CA-based company will now have to cover all the work in-house that was previously handled by its agencies, which included FleishmanHillard, Edelman, and Brunswick, with little or no extra resource.

That's a blow to the agencies, especially FH, which will take a multi-million dollar hit in fee earnings from the diminution of a nine-year relationship, but also the internal folks who have suddenly seen their workload rise exponentially.

The possible implications you can draw from this development are many and various: Visa is in serious cost-cutting mode; the work of PR agencies has become superfluous; the in-house team is under-worked; or Visa is tearing up the playbook and is going to do things completely differently.

The decision to dispense with PR agency support was taken by Visa's chief brand officer Antonio Lucio, an alum of Procter & Gamble – hence the chief brand officer title he sports that is also favored by P&G's Marc Pritchard – who assumed control of a combined marketing and communications function back in April of this year, having been Visa's CMO since 2007.

Lucio told PRWeek via a statement that “This move comes partly as a result of the recent integration of the communications and marketing functions at Visa, which will allow us to gain many more synergies and ensure a fully integrated communications approach.”

The merging of departments in April prompted the departure of Doug Michelman, Visa's global head of corporate relations, who probably didn't relish suddenly reporting through marketing when he previously had a direct line to the then CEO Joseph Saunders.

When PRWeek profiled Michelman in November 2012, Saunders said: “Doug has demonstrated he can look ahead and anticipate, and in many instances help us get ahead of issues that could impact our growth and reputation.” Saunders was succeeded as CEO by Charles Scharf in that same month and stayed on as executive chaiman until his retirement in March 2013.

Visa is currently seeking a new head of global corporate communications, a search that started in September. According to the job description, the “highly visible leadership role… will drive a strategic renovation of the corporate communications function,” managing a team of five direct reports and a global employee base of 90 people.

This micro story is an example of a macro trend we have been following closely at PRWeek over the last couple of years. Many companies have collapsed marketing and communications together, and in some cases it has led to the disappearance of the CCO role.

At health insurer Cigna, communications was also subsumed into marketing under incoming global CMO Lisa Bacus, leading to the departure of Maggie FitzPatrick, who subsequently showed up at Johnson & Johnson.

At P&G, Pritchard himself assumed total control of communications when global external relations officer Chris Hassall retired in June last year. FedEx, Allstate, and SAP have also merged marketing and communications in the last 12 months. And IBM, Nissan, and Cisco have long since merged the two, but with a comms expert in the top role, rather than the marketing head.

The drivers behind this trend toward integration are the increasing merging of PESO (paid, earned, shared, and owned media) and the influence of social media and the need to ensure marketing and communications aren't running along parallel lines when it comes to social strategy and implementation, but are rather fully integrated and on each other's wavelength.

This new integrated structure only works if the new management fully understands the intricacies of corporate reputation, crisis communications, and senior counsel to the CEO and C-suite. And, as far as I am aware, none of these reforming companies have gone as far as Visa and also dispensed with PR agency support.

It could be an inspired new strategy or a case of throwing the baby out with the bath water. And reviving morale may well be one of the first things on the agenda for the new head of global corporate communications when he or she is eventually appointed.

Either way, I wouldn't be surprised to see a few departures from a comms team that will now be in a perfect position to address the question: “What do PR agencies do?” Because I suspect they might find the answer is: “Quite a lot, actually.”

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