The Sarbanes-Oxley act has made commenting on the finances of international PR agencies much more difficult, but it is still possible to observe certain issues being faced on a global basis.
PRWeek - with help from its sister title in America - surveyed the world's leading agency groups to tease out important trends and developments via a carefully constructed questionnaire. In addition, it interviewed leading lights with an international PR remit to pinpoint the issues that really matter in today's world with its increasingly blurred national borders. And the results of this survey are striking.
'Every client is talking about the blogosphere and how to manage a reputation online,' says Edelman European President and CEO David Brain. 'It's also becoming much more difficult to have slightly different positionings for brands in different markets.'
As the only independently owned agency among the global top five, Edelman is able to release its figures, which are largely positive. Global revenues grew 12 per cent last year to $230m and headcount rose nearly 11 per cent to 1,933. In financial terms, Asia was the star performer with revenues boosted by 22 per cent. Europe and the US also performed well, with 18 and ten per cent rises respectively, but there were two per cent revenue decreases for both Canada and Latin America.
Other agencies highlight blogging as a major concern, but as part of corporate reputation management. 'The globalisation of news is driving greater scrutiny of global companies,' says Christopher Burghardt, Hill & Knowlton vice-president of business development and marketing EMEA.
'Companies have a much bigger footprint, which means there are far more opportunities to get things wrong. This is while having more and more stakeholder interests to satisfy.'
Thierry Wellhof, CEO of ECCO France, says the fast-moving global media environment has huge reputation management repercussions for multinational clients. 'The decision by Deutsche Bank to announce multiple redundancies at the press conference in which record profits were revealed damaged its reputation across many countries in mainland Europe. Global companies need to be more sensitive to the growing concerns in Europe about the relocation of work to lower-cost areas in Asia; it is beginning to negatively affect their reputation as caring employers.'
It is no surprise that the International Public Relations Association's 50th anniversary World Congress in Istanbul last month (26-28 June) was themed 'The Sustainable Path to Trust'. Organisational reputation is far harder to defend in an environment where information flows from country to country at blistering speed.
'The online world has accelerated everything - stories develop across time zones in a rolling global day,' adds Burghardt. 'A good example just today: The Sun ran a story about an alleged data threat in India. By 8am (BST) the press in India and Asia-Pacific had picked up the story, wanting a response. By 11am a senior EU Commission official we were meeting also knew about the story.'
Clearly, this makes it much more difficult for clients to set a central strategy and control the message that reaches the consumer or business customer. It also puts pressure on clients and their agencies to ensure that online and offline strategies converge.
Ketchum Europe partner and CEO Jon Higgins identifies the explosive rise of blogs as an example of how media consumption globally has become an increasingly personal choice. During 2004, Ketchum's specialist practices in sales force communications and entertainment marketing proved successful.
In his view, communications professionals need to embrace non-traditional media channels if they are to be successful in reaching certain target audiences.
'In western Europe, with the market penetration of mobile phones at nearly 100 per cent in some countries, mobile marketing now has media relevance as never before,' says Higgins. 'A recent study in the UK found that one in five of the 30 billion text messages that citizens are going to send this year will be about business.'
Elsewhere, many agencies are benefiting from the economic boom in China, which is transforming perceptions of Asia. Burson-Marsteller reports a 44 per cent revenue rise in the country during 2004, while Weber Shandwick identifies it as one of its fastest growing international operations, and Brodeur says it is looking for new opportunities in China and India.
However, the rush to exploit the Chinese boom has implications both for agencies, in their allocation of resources, and clients. Companies are being held more accountable for their impact on emerging economies. This is particularly the case for companies who make grand claims about advancing social and economic wellbeing in the countries in which they operate.
Several corporations have been subjected to uncomfortable NGO and media scrutiny and have had to deal with allegations relating to harsh exploitation, including the payment of sweat-shop wages, and blatant opportunism.
A recent example of this was criticism of Microsoft for bowing to Beijing's political censors by banning the use of the words 'freedom' and 'democracy' on its Chinese internet portal. 'The Microsoft case clarifies a new dilemma for global strategists,' says Kinross & Render CEO Sara Render. 'It has always been important to accommodate diverse cultural, social and religious values in global programmes. However, the increasing importance of countries such as China and India as commercial markets is making it increasingly important that companies avoid alienating their home markets.
It is a minefield and in some cases global companies are going to have to rethink some of their stated corporate values.'
Much has been written about media fragmentation globally. Consumers, in particular in the younger age groups, are increasingly keen to 'pull' content - in other words acting as their own editors rather than being passive receptors of information. So not only are new media outlets proliferating, but the way media are consumed around the world is changing.
'For PR practitioners there is a dramatic increase in media outlets,' says Peppercom Europe managing director Jacki Vause. 'If you take just broadcast as an example, there is a proliferation of new broadcast outlets, particularly in emerging markets such as China and India.
'At one time the number of important broadcast outlets you needed to reach was measured in the dozens,' she continues.
'Today the number of critical outlets has risen to hundreds, if not thousands.
And you must be able to tailor your message and deliver material that is relevant in each market. At the same time, competition for coverage by those media outlets is fierce. And you must be available to them on demand.'
Global planning is an issue highlighted by a number of agencies. Ogilvy Public Relations Worldwide, for instance, points to the creation last year of its strategy and planning group, led by Steve Dahllof. The group has a global outlook and spans all seven of the agency's practice areas.
Ogilvy, incidentally, saw global revenue increase nine per cent last year.
Wider media planning
There are other planning-related issues that affect agencies operating internationally. 'Companies must understand the increasing influence on budget decisions which the emerging communication planning agencies, and the revamped media planning agencies, are having,' says Results Business Consulting managing director Jim Surguy. 'They sit at the top table and have enormous resources that they are now deploying for "media planning" in the very widest sense.
They are moving into many areas a long way from traditional media advertising. Equally importantly they have the resources to develop metrics for measurement and evaluation across all communications channels, including PR, and they are doing so.
Among the leading agencies, the sophistication of account management and billing systems is increasingly being seen as a point of difference between the global and smaller agencies. Weber Shandwick, for instance, has enhanced its WeberWorks marketing programme management application in a number of ways, such as measuring ROI by programme, major initiative and specific project.
B-M reports double-digit top-line growth in Latin America and identifies Venezuela, Argentina and Mexico as countries where growth has been significant, adding that many of the region's smaller markets have performed well over the past two years. Brodeur likewise has achieved growth in Latin America but notes that this has been primarily at the local and country level.
Multi-country and regional clients in that part of the world remain thin on the ground. Latin America as a region has traditionally been plagued by political and electoral uncertainty and some financial instability, and Brodeur sees only 'modest' improvements in this respect.
APCO, which saw global revenue grow 24 per cent to $58m, says the move to market economies by developing countries is triggering demand for its services as corporations seek public affairs and communications advice on entering new markets. Increased regulation and litigation are also fuelling growth. The Middle East, which APCO entered last year through a partnership with Arab professional services consultancy group TAGO, has been earmarked for expansion.
Porter Novelli, meanwhile, claims its best-performing major markets over the past year were US, France, Belgium and Australia. Slower to recover were Germany, UK, Singapore and the Netherlands. PN has identified China and central and eastern Europe as its main opportunity areas.
'The G8 summit has brought a number of issues to the fore around social responsibility and the environment,' says Porter Novelli International president Gary Stockman. 'These are the big challenges facing politicians and we are also seeing large companies paying more attention to how they are perceived in local communities; to corporate social responsibility programmes; and environmental policies and internal communications to their own employees.
'PN is seeing more demand for services such as corporate values assessment, values management, corporate governance and ethics training.'
One good example of this is PN's work with Hewlett-Packard around the recycling of electronic waste. 'We do spend a lot of time strategising and thinking about political and social trends and our reputation management,' says Hewlett-Packard UK and Ireland head of corporate communications Gary Allden.
'Buyers are becoming more politically aware and they do ask themselves more questions about the products they buy.' Allden adds that H-P sets comms strategy centrally but allows local managers a fair degree of flexibility to develop local comms initiatives. If these are successful, they are often rolled out internationally.
The client perspective
And what about the client view? British Airways is an example of a truly global brand. The airline takes an internationalist rather than a one-size-fits-all global approach to PR activity, explains head of corporate communications Iain Burns. Communication is tailored to every individual market. Plans are drawn up and execution is co-ordinated and directed centrally by the airline's Corporate Communications department in London to ensure all activity meets the overall commercial priorities for the business as well as taking into account the specific local requirements.
British Airways employs 80 PR consultancies around the world to carry out its corporate communications requirements, media relations activity in support of local sales and marketing initiatives, and to act on behalf of the airline in the event of a major incident or issue. It is the agencies' job to ensure BA is the lead voice against any national airline within that carrier's home media.
'The airline has put in place over many years a comprehensive PR network around the world in countries that BA serves,' says Burns. 'The airline shares ideas across markets, learns from best practice and centralises resources to create efficiencies, especially in smaller markets.
'It also ensures that we maintain consistency across a particular region where pan-regional publications mean that PR campaigns and media issues transcend national boundaries, for example in the Middle East and also in some parts of Africa.'