INTERNATIONAL PR: A global concern

When the executive committee of the ICCO met in London last month, Alex Black asked its members about the trends affecting the industry on an international scale.

INTERNATIONAL PR: A global concern
Lou Capozzi, President, ICCO

Day job: chairman emeritus, Publicis’ Public Relations and Corporate Communications (PRCC) arm

: before creating PRCC, Capozzi spent seven years as CEO of Manning, Selvage & Lee. He is chairman of US PR trade association, the Council of PR Firms

‘You asked about industry growth. We recently surveyed 27 countries and every single one reported robust growth. Is this sustainable? Yes, because recent growth has built larger PR agencies.

I remember MS&L having 220 employees in 1990. It has more than 1,500 today. PR is advising across much wider areas than used to be the case. Take MS&L’s Procter & Gamble account. Twenty years ago MS&L just ran ‘baby days’ in seven US cities. Now, it’s a mulit-million dollar brief across 15 global markets with multiple products and multiple disciplines. Accounts like these build a stronger firm. Agencies get better infrastructure to handle IT, hiring, retention and accounts, and they are so professionally run they should be able to weather storms that would previously have sent them under.

The industry has a much higher status these days too. I’m old enough to recall the days when we sat around wringing our hands asking how we could get businesses to see the power of communications.

Now there isn’t a CEO in the world who doesn’t know that if he gets in trouble he’d better have me, or someone like me, sitting right next to him! The age of striving for recognition is behind us, partly because clients are much more sophisticated, and partly because marketing departments have changed fundamentally in their understanding of PR. Whatever they call it, they know it is one of their most important strategic tools.

It’s also important to note that a company’s chief communications officer is exactly that these days. They have access to the leadership of the organisation and the elevation of this stature has also changed the way clients see PR and communications.’

Christian König (r), Treasurer & finance chair, ICCO

Day job: managing partner, Farner PR, Switzerland

: a former head of information at St Gallen University in Switzerland, König joined Farner PR in 1978. Moved to Trimedia Group in 1986, before rejoining Farner and leading an MBO. Also lectures on business administration at St Gallen University

‘Over the past few years we have seen a growth in the quality and quantity of people coming into the communications industry. There is no way of entering this industry without a university degree and a broad understanding of business these days.

This means clients are more knowledgeable, which helps the agency side of the industry.

We are also seeing a convergence between the advertising and PR disciplines. A lot of PR agencies now have advertising operations because campaigns are not necessarily all about the advertising creative these days. Companies know the important part is the content, and that is often driven by PR.

From the corporate point of view, we rarely sit at the same table as advertising any more. We sit down with the law firms, the bankers, the executives.

Another international trend is the way the definition of ‘word of mouth’ has changed because of the internet. The number of communities you can reach these days through a combination of new and traditional routes is enormous. We call it horizontal influence.

Look at the financial markets. People started to really take notice when people’s comments written in the blogosphere and the internet started impacting on share prices.

This is very much a PR issue, because we are the people who understand how messaging and influencing works.

But you cannot influence the online community without being in partnership with it. You’d better take notice of what these groups are saying because the balance is in their favour.

Lou mentioned the increase in fees across all markets. This is great, but from a Swiss point of view we are particularly pleased UK agencies are doing well, as this always enables us to put our fees up!

Jean-Leopold Schuybroek (r), Membership chair, ICCO

Day job: executive chairman, European strategic comms and PA consultancy Interel, Belgium

: a former special adviser to Unesco in Trinidad and Tobago and former South America, Caribbean and Pacific MD of Swiss telco Teleprint International. Specialises in crisis and issues management and Belgian public affairs. Vice-president of Brussels-based European Public Affairs Consulting Association

‘Recently we have seen an evolution in the professionalism of the communications industry. The model now is like legal firms. There you get specialists in family law, litigation, and corporate law, and in PR firms we have issues specialists, corporate people and consumer specialists.

Clients can therefore pick and choose. They used to have one agency, but in continental Europe companies are starting to look at specialist agencies.

We talked earlier about recruitment and retention problems in the UK, but this is an issue all over the world. In China, for instance, this is a major problem. People move jobs two or three times a year. Companies just poach talent and there is zero loyalty. If you look at a company at the beginning of the year it will be completely different 12 months later.

It is like the Wild West. But one way international agencies are dealing with this is to look outside the industry. The industry is very well respected, so we are seeing people from management consultancies or other fields taking the initiative and asking to join us. They may have a different background, but these people want to learn so they integrate well. They are used to dealing with CEOs and sitting at the executive table, so they understand company dynamics, strategies and influencing at a high level.

Another key international trend is that European markets are no longer dominated by the US. Take the financial industry. Sarbannes-Oxley means there are now many more IPOs in Europe. China and India are also looking to London because it is perceived as a global hub. This is something that goes beyond our industry, but it is something that impacts on what we do.’

Richard Houghton (r), Industry chair, ICCO

Day job: CEO, Carrot Communications, UK

: Before founding Carrot, international PR specialist Houghton held roles as joint MD at Ketchum and chief executive of Shandwick International’s corporate, broadcast and travel and leisure division. Currently chairman of the PRCA

‘CSR came of age in the past 12 months after initially having had a bad reputation. I have seen some campaigns that have delivered real economic and commercial value for the client, but have also provided a social element.

Danone in Poland fed 800,000 undernourished children each quarter last year, and it also managed to drive an increase in sales in one of its core markets. That’s a long-term investment in society, but it is only possible because it allows for sustainable commercial growth. Nespresso is one of the fastest-growing Nestlé brands but the work it is doing with its sustainable coffee growth programme is because it is a premium product and needs premium raw materials.

The need for content is also becoming more important as brands are forced to cede control of brand messaging to third parties. Who creates content for a living? The PR consultancies of course.

Another key topic for us is freelancing. We had a debate at the PRCA recently and one of the conclusions was that agency heads should consider changing the way they manage their firms in order to allow for more flexibility on freelancers.

Why has the use of freelancers increased? One reason for this is that we are far better at measuring the effectiveness of our campaigns, so the point moves away from “how are you going to deliver it?” to “what did you achieve?”.

Also, there are social changes happening across Europe. There is a growing minority that choose to work in a different way, and agencies and clients have to accept that.’

VIDEO PODCAST: PRCA chairman Richard Houghton discussing these issues further. WATCH (04:25)


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