Anyone curious about how globalisation is affecting PR people need
look no further than two items in the news this week. Eastman Kodak is
looking to appoint a single director of communications to cover the
Europe, Middle East and Africa region, following its commitment to cut
group overheads by 20 per cent; while 18 communication staff at the UBS
London HQ are to lose their jobs as a result of the SBC merger.
Mergers almost always rely on a rationalisation of resources in order to
make the deal worth doing in the first place. With that in mind,
in-house PR people working in hot sectors like banking and
pharmaceuticals will be keeping a wary eye on the horizon at the moment.
But in an increasingly competitive global market, even companies which
are not planning mergers are searching for ways to reduce central costs.
Inevitably, communications functions will be one of the first places the
bean counters look for savings.
Globalisation and the need to trim costs are factors in shaping the
plans of the larger PR consultancies too. In recent years, most global
agencies have set their sights on big multinational accounts, because
this is where they expect to find the high-value, high-margin work they
need to fuel their own growth. This strategy also reduces their
vulnerability to competition from smaller niche players in local
The ability to muster cross-border, client focused teams is an obvious
first requirement in winning this kind of business, which has led to
consultancies making changes of their own to match client structures. At
the same time agency groups have also recognised the need to manage
their own businesses more efficiently, mirroring the lean corporate
superstructures being adopted by clients. Hence, for example,
Shandwick’s recent head office clearout.
None of this is bad news for the PR industry. By rising to the challenge
presented by globalisation a more efficient and profitable PR business
is likely to result. There is even a positive side-effect to all this
merging and paring of both agency and in-house PR functions: a fresh
influx of experienced practitioners on to the market, bringing some
relief to an industry which has found itself struggling to recruit
quality staff in sufficient numbers.
But with greater efficiency being demanded across the board,
restructuring and cost cutting is only part of that challenge. As the
pressure on PR people to prove the effectiveness of what they do
increases, the need to improve standards of research and evaluation will
become the biggest issue facing all PR practitioners.