From the Editor-in-Chief: 2020’s changes in ethical capitalism could be a game-changer

TS Eliot famously branded April ‘the cruellest month’. Personally, I’d opt for October.

From the Editor-in-Chief: 2020’s changes in ethical capitalism could be a game-changer

But for these purposes let’s try to be more Keats-like. As I look outside it’s all golden leaves and ‘mellow fruitfulness'.

As October draws to a close, and the clocks prepare to lurch backward, trends in the comms sector appear to be settling in their year-to-date pattern; brand promotion remains subdued; corporate affairs and tech comparatively buoyant; while there’s a definite positive development in the area of ethical capitalism, which could be an absolute game changer for PR professionals. More of that in a moment.

I talk to a lot of comms professionals. They’re an optimistic lot. I remember the 2008/9 recession and most PR folk were upbeat throughout despite a severe revenue dip. So we should be pragmatic. We’re in the midst of the worst recession for several decades and it’s not going to be easy for anyone. There are, however, major opportunities at the moment, if one looks in the right places.

When it comes to classic brand marketing it was interesting to read this week the most recent IPA Bellwether Report, which surveys 300 marketers. It revealed more than half (52.6 per cent) of companies had their marketing budgets cut in the third quarter, compared with only 11.6 per cent enjoying an increase. That gave a net balance of -41 per cent - only a little smaller than 2020’s Q2 figure of -50.7 per cent.

Paul Bainsfair, the longstanding president of the IPA, pulled no punches when he said: “With a second wave of COVID-19, coupled with ongoing Brexit negotiations, including bracing for 'no deal', I think green shoots in the immediate term are increasingly unrealistic. “

Interestingly ‘PR’ had a net balance of -31.4 in this survey, which is an even worse budget hit than advertising (-25.3). We should remember, however, that this is just measuring the PR budgets that come under marketing departments - and mainly big brand ones at that - because this survey comes from the Institute of Practitioners of Advertising.

As I’ve pointed out previously it is a different story for other areas of comms, such as corporate and public affairs or healthcare or tech PR. Some specialists in these sectors predict 2020 will be significantly better for them than were 2019 and 2018.

This is one of the reasons why PRWeek launched the Top 150 Consultancies Interim Barometer this week – so we can properly take the temperature of the industry across the various specialisms. I should point out that this is NOT an agency rankings table – that will come as usual next April – but a survey of all the significant agencies to find out what’s really happening since the pandemic began.

It’s therefore very important that agency bosses are honest in their reporting of revenues and predicted revenues across the different sectors. Because the figures you provide are anonymised it’s a learning exercise for all of us, plus an opportunity to provide real thought leadership on what’s happening in the comments sections, either attributably or unattributably.

But back to the present, I do believe one huge trend coming out of 2020 will be the landmark development of ethical capitalism, which will thankfully further blur the line between what we once knew as corporate PR and consumer PR.

“The line between corporate and brand work has definitely blurred further,” reports a director at a global PR network. “Companies increasingly come to us with an issue and whether it’s a consumer brand challenge, or a reputational issue, or one of government affairs, then we can help.”

She adds: “We are seeing clients merge corporate affairs and marketing as never before. Sometimes clients come to us with a problem that they think is in one discipline and we end up telling them the solution is in another.”

But it’s not just large consultancies that report this trend. The boss of small-to-mid-sized UK PR agency tells me: “Clients are now looking for agencies that can solve complex comms and business problems. It really is that expression, ‘corp-sumer’. I’d say we still do ‘PR’ as opposed to ‘consultancy’ but our work requires real brains and a flexible network of specialists including strategic planners.”

Of course this is not a new trend but it seems the global pandemic and the Black Lives Matter movement have dramatically accelerated it.

Five months ago, in the heart of the initial crisis, I wrote here that there had been a noticeable shift in the way companies and brands now wish to communicate.

In recent years ‘ethical purpose’ has been firmly established within the marketing lexicon alongside brand or product promotion but it wasn’t until May 2020, possibly like you, that I’d really heard the acronym ESG mentioned a lot.

The key point in talking more about environmental, social and corporate governance is that it shows that companies are now intent on actually measuring their ethical activities; a growing recognition that they are being judged on their behaviour rather than simply their statements of ethical purpose.

The founder of one small but fast-growing consultancy says: “We were already blurring corporate and consumer comms but the events since March have clarified our thinking on this. The best corporate work is ESG while purpose campaigning requires consumer PR skills. Clients will ultimately need both.”

She adds: “ESG issues are important to every member of a company’s exco. Corporate affairs can lead but other members must listen, from marketing to HR. And when Black Lives Matter came to a head people were taking to social media and demanding that companies not only said the right thing but had done the right thing in terms of their policies and structures.”

The director of the global PR network says: “We are seeing clients actually merging their corporate affairs and marketing functions. Marketers are worrying about crises and their reputation more than ever. So corporations want consultancy on the issues, which may ultimately involve requirement for campaigning on brand purpose, staff comms etc.

“Ultimately it’s all brand marketing in the wider sense. Crucially it’s taken from a storytelling and earned media perspective. Is the world finally moving in our direction?”

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