PR 2.0 Impact on Business Matters

PR 2.0

IMPACT ON BUSINESS MATTERS

PUBLIC RELATIONS FIRMS NEED TO BECOME

A STRATEGIC PARTNER TO THEIR CLIENT

THE SUMMARY

03PR 2.0: IMPACT ON BUSINESS MATTERS

For those of us in the Indian public relations industry drained by the long-drawn-out recession, there is some good news.

Leading practitioners of India's communications industry believe the best days of the industry were still ahead of it

pointing towards new opportunities arising out of the need to build new competencies to address the growing complexity

of the public relations business. Is this an overtly optimistic assessment given that repeated hopes of an imminent

economic recovery continue to flatter only to deceive?

One hopes it is not.

The global economic environment continues to adversely impact most services businesses, including public relations.

The growing business complexity has shrunk the opportunity pool for consultancies with the number of engagements

going down considerably.

Ashwani SinglaMD & Chief Executive, Asia Penn Schoen Berland

Yet, while the number of opportunities may have gone down, the nature of business has become far more strategic in

nature offering a glimpse of what is to come. Client organizations may not necessarily be slashing their spending

budgets drastically, but are instead pushing public relations consultancies to provide services that offer more long-term

bang for their buck. We are, therefore, predictably, witnessing a spurt in the demand for services with fresh new

competencies across a range of media, technologies and approaches to communications engagements.

34% of representatives of client organizations said they spend over INR 1 crore per annum on public relations services

COMPLEXITY OFFERS OPPORTUNITY

It may, therefore, be pertinent to consider some very unique perspectives we drew out of our analysis of this survey's

data. The growing complexity of the public relations business is a result of, among other things, the emergence of the

Internet that is today riding a second wind with the onset of social media platforms. The complexity is further heightened

by a growing demand for research-backed customized communication moving away from general broadcasts.

Finally, the growth of mobility and mobile devices are becoming a central medium of engagement to strengthen this

industry trend. This complexity – or the New Normal in the public relations industry – is becoming pervasive amid an era

of long periods of underperformance, stalling growth and high unemployment across organizations.

KEY INSIGHTS

Within a broad acknowledgement that the PR business is far more complex than it was ever before, there exists differing

perceptions across client and consultancy organizations on whether organizations are ready to cope with this new

complexity and, therefore, their ability to tap the emerging opportunities.

There is a growing tide of organizations that underscore the importance of social and digital media for their businesses

and, indeed, for their long-term strategic growth. More than 85% of representatives of client organizations, for instance,

feel digital marketing is a key enabler while driving engagements due to its ability to connect in real time, its reach and

ability to scale efficiently and with speed.

However, as our analysis showed, while the importance of social of representatives of client organizations said they

spend over INR 1 crore per annum on public relations services and digital media for businesses was generally being

accepted overall, about half of our survey respondents still feel that public relations consultancies were not making the

most of this medium to be able to leverage it effectively enough.

Let us think about the following now:

1. 80% of clients acknowledge that public relations play a strategic role in their business, while 69% of consultancies felt they were treated as strategic partners by their clients.

2. Clients and consultancies alike largely recognize the complexities of the New Normal. They support a research-and insights-driven approach for effective measurement of business ROI. But fewer agencies compared with clients favour measurement of impact on business.

3. A significant 2/3rd of clients demanded research to measure the effectiveness of communication pointing toward a growing acceptance that applied insights result in lasting impact and better ROI.

WAY FORWARD

Aligning with the reality of the new business complexity, public relations consultancies must focus on addressing gaps in

their existing approaches and offer solutions that demonstrate their hunger to employ strategies that concentrate on the

results and not just on the effort.

While consultancies will need to focus on driving business impact and book their place at the strategic head table of

client organisations, buying decisions will be influenced by the following imperatives:

a. Focusing on results and not just the effort.

b. Developing programs that will build sustained momentum.

c. Becoming proactive in identifying issues/mitigate risks.

d. Becoming strategic partners. Evolving from being merely implementers of public relations.

e. Developing sector or domain expertise to offer advice that is innovative and ideas that are actionable.

04 PR 2.0: IMPACT ON BUSINESS MATTERS

THE SURVEY


The online survey Penn Schoen Berland (www.psbresearch.in) conducted in partnership with IMPACT magazine makes

an attempt to understand how public relations can remain relevant and drive impactful and sustainable business

impact in an era of constant economic flux. Decision makers and senior communications practitioners at leading Client

Organisations and Public Relations Consultancies were interviewed to assess expectations, preparedness and delivery

of public relations services.

METHODOLOGY

89 senior communication practitioners were polled across the country's major metropolitan areas, including Delhi,

Mumbai, Bangalore, Chennai, Kolkata and Hyderabad in the month of May 2013. Chief executives and heads of the

corporate communications function on the client side accounted for 56% of the sample; while country heads, account

heads and senior managers at public relations consultancies comprised the remaining 44%. The survey places

consultancies into three categories: Full Service (64%); Specialized (24%); and Regional (10%).

56%

Chief Executive, Head of Marketing, Head of Communications across Diversified, BFSI, Technology, Healthcare, FMCG, Retail.

48% have a dedicated internal Public Relations team.44% have a small internal Public Relations team, outsourcing most activities.

CLIENT ORGANISATIONS

44%

PUBLIC RELATIONS CONSULTANCIES

64% are from full service organizations.24% from specialized service organizations.10% from regional organizations.

Country Head, Account Head, Senior Manager in consultancies.69% of which are Independent (Indian Owned).

Whom did we ask?

Online survey in the month of May across top metros in India. Amongst key decision makers across Client Organisations & Public Relations Consultancies.

PSB used its proprietary research and analytical frameworks to draw insights.

AN ERA OF GROWTHIndia's public relations and communications industry appears to be heading towards an era of growth even as it

negotiates the turbulence of a relentless recession afflicting the global economy. More than 60% respondents of the

survey said they expect that the best days of the industry are still ahead of it, while 34% of Client Organisations said they

spend over INR 1 crore per annum on public relations services.

While this augurs well for the industry, an overwhelming majority of respondents, at over 90%, felt the public relations

industry landscape is far more complex today, pointing toward new opportunity for growth.

It is here that public relations consultancies and client organizations must build lasting strategic partnerships to exploit

this opportunity.

The majority of respondents, while acknowledging the growing complexity of the public relations business, said this was

a result of the emergence of the Internet and digital media that was riding a second wind with the onset of social media

platforms.

Consider the numbers below that point toward the growing impact of the digital medium as well as the rise of new media.

One, 2/3rd of respondents acknowledge the growing importance of social/ digital media for their businesses and,

indeed, for long-term strategic growth

Two, over 85% of clients said digital marketing is a key enabler while driving engagements given its ability to connect

in real time, scale efficiently and with speed

Three, clients are a divided house when evaluating consultancies on their ability to understand the scope of new

mediums of engagement

READY, NOT READY

Given this emerging environment, we asked respondents whether public relations consultancies were ready to face this

new business complexity. Predictably, there were differing views between client organizations and public relations

consultancies on this very parameter, a crucial first step for consultancies beginning their journey to be a

strategic partner.

Differing Views: Readiness Quotient of Consultancies

Are You

Ready?

Absolutely Ready

Somewhat Ready

Ready but need some improvements

Not at all Ready

Clients

Consultancies

Client’s view of Consultancies’ Readiness

8%

18%

0%

Clients

Consultancies


66%

54%

32%

Clients

Consultancies


24%

23%

60%

Clients

Consultancies


2%

5%

8%

The divergence in perceptions is predictable given the different business priorities and environments of clients and

consultancies. However, the survey draws attention to varied opportunity areas for consultancies to address some of the

key challenges that have been highlighted.



Capability Assessment: Consultancies have much to do

Consultancies’ self image Clients’ view of Consultancies

74%

52%

82%

46%

69%

42%

79%

52%

Have a formal process of measuring impact or effectiveness of the communications programs

Recommendations and ideas are supported with relevant

research data

Provide research data to support their ideas or

initiatives:

Capable of leveraging Digital media effectively

96% see digital media as a friend and enabler in driving higher impact.

Clearly, driving business impact and being able to measure that effectively, as we stated earlier, is emerging as a key

parameter of a strategic partnership, though there is a strange dichotomy in client expectations on whether the measure

of impact was more important than media coverage.

RESEARCH-DRIVEN INSIGHTS FOR LASTING IMPACT

As client audiences become smarter and more knowledgeable, public relations consultancies have much to do to be

able to exploit great opportunities that lie in making the right investments to manage this changing business

environment.

Driving impact as client audiences become smarter

High relevance for Consultancies

High relevance for Consultancies

Low relevance for Clients

High relevance for Clients

1) New platform of interaction like Facebook, Twitter, etc.2) Measurement of online presence is still not well

understood or practiced3) 24x7 news cycle4) New mediums of communications have emerged

(tablets, smartphones, etc.)5) From general broadcast to customized communication

1) Parameters for measuring success have changed from media COVERAGE to IMPACT on business

2) Smarter and knowledgeable audience groups3) Problems and issues are no longer local

1) Lack of audience loyalty due to a plethora of choices2) Emergence of citizen journalism3) Advent of technology – cloud computing, cloud

applications, etc.

1) Media coverage continues to be most important measure

Disconnect

The new complexity is offering an opportunity for public relations consultancies to build an approach that leverages

research-driven insights to build communication campaigns for specific client needs to be able to effectively measure its

impact on their business in a sustained manner. Greater customisation is really the key and will differentiate the

winners from the losers.

Making the right investments in the face of change

Consultancies’ initiatives to overcome challenges Clients’ initiatives to overcome challenges

51%

60%

Collaborated with agencies that offer

end-to-end services

Invested in technology /

specialized tools

46%

30%

67%66%

59% 60%

23%

28%

Added expertise for specialized media

(social media, internet, etc.)

Upgraded existing skills of my team

Increased team size

Fewer consultancies compared with clients favour measurement of impact on business. However both clients and

consultancies largely recognize the opportunity that an empirical, research-and insights-driven approach offers,

especially given its ability to make the measurement of impact on business ROI more effective.

Consultancies need to improve on perceptions of delivery

Clients view of Consultancies’ Understanding

Consultancies’ Self view of Understanding

Client’s view of Consultancies’ Delivery

Consultancies’ Self View of Delivery

New platform of interaction

New mediums of communications

24x7 news cycle

From general broadcast to customized communication

Problems and issues are no longer local

Parameters for measuring success have changed from media COVERAGE to

IMPACT on business

Measurement of online presence is still not well understood or practiced

Smarter and knowledgeable audience groups25 35 45 55 65 75 85 95

It has been some time now that client organizations have been ready to pay a premium for advice based on empirical

evidence or for insights-based campaigns. In our last report, we spoke about the need for India's public relations

industry to embrace empirical public relations to demonstrate how integrated stakeholder campaigns can move the

needle by applying research-based actionable insights at each phase of a campaign.



Greater Customisation: Focus on research based insights to drive impact

Customised research is a potential way to measure effectiveness

69%

46%

69%

54% 55%

62% 62%

50%

Internet or online activity

Direct feedback Customized survey/research

Media coverage (column-centimetres space)

Consultancies Clients

Clients and consultancies alike are beginning to favour the empirical model steadily. The survey finds that 80% of clients

acknowledge that public relations plays a strategic role in their business, while 69% of consultancies feel it is treated as

a strategic partner by clients. Within this view, there are clearly great new opportunities for public relations

consultancies to demonstrate much stronger capabilities in areas such as media relations by expanding its

understanding of the role of strategic media, public advocacy programs and finally investor relations.

Opportunity: Media Relations, Public Advocacy & Investor Relations

Consultancies’ offering of services Clients' need for services

67%

94%

Media relations Digital marketing Thought leadership Public advocacy Public affairs and government relations

Internal/Employee communication

Corporate social responsibility

Investor relations

64%60%

64%

46%41%

40%36% 36%

64%

30%

64%

26%21% 24%

80% Client organisations agree PR plays strategic role in their business

69% Consultancies feel they are treated as Strategic Partners

CSR, Internal Communication & Thought Leadership offerings overestimate client demand


STRATEGIC PARTNERSHIPS TO CO-CREATE OPPORTUNITIES

Offerings woven around internal communications, thought leadership, and corporate social responsibility programs – in

spite of the fact that CSR, as we all know, is the next big thing – appear to overestimate client demand for these services

at the moment.

In an era of citizen journalism and the explosion of digital information, companies and public relations agencies are

struggling to establish and maintain mutually-beneficial relationships. Organizations that use sophisticated public

relations tools, including the use of technology and science (analytics/measurement) strategically to co-create

opportunities will separate the boys from the men.

Becoming Strategic Partners: Consultancies must focus on driving impact

EXPECTATIONS CLIENTS HAVE OF CONSULTANCIES

TOP 4 EXPECTATIONS CONSULTANCIES HAVE FROM CLIENTS

TOP 4

Develop programs that will build sustained momentum

Develop sector or domain expertise to deal with specific business issues and requirements

Come up with innovative and actionable ideas or advice

Focus on results and not just the effort

Realistic expectations on delivery and timelines

Openness to using new ideas/ technology/ tools

Consider programs that will build sustained momentum

See the role of agency as a strategic partner

ABOUT

PENN SCHOEN BERLANDPenn Schoen Berland (PSB) is a 'Global Research based Strategic Communication Advisory' that brings the lessons

learnt from its campaign trails into the board room to help companies negotiate some of their toughest corporate image

& corporate affairs challenges. For over thirty years PSB has used research to leverage unique insights about public

opinion, to give our clients a competitive edge. PSB serves Fortune 100 Corporations, leading Hollywood Studios and

has helped elect over 30 Presidents and Prime Ministers around the world.

PSB South Asia office was established early 2011 in Gurgaon and serves a blue-chip clients comprising leading Indian

transnationals and multinational corporations operating in the Indian Sub-continent. It has also helped design winning

campaign strategies for leading candidates across several State Assembly elections. Ashwani Singla, MD & CEO, Asia

who was formerly the CEO of Genesis Burson-Marsteller (GBM) & Board Member, Burson-Marsteller, Asia Pacific leads

the office.

PSB is a part of Y&R Brands and WPP (NASDAQ:WPPGY).

www.psbresearch.in

Penn Schoen BerlandSouth Asia, 603, Unitech Cyber Park, Sector 39, Gurgaon, Haryana, India

Ashwani SinglaMD & Chief [email protected]: +91 98110 75843

Shefali KhannaDirector, [email protected]: +91 97111 18615

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