By Byron Reimus
Last year, my firm completed an extensive global study of how corporate public relations activities were developed, managed, staffed, funded and evaluated at multinationals across over a dozen industries and on three continents.
Over the past 25 years or so, we have conducted more of this kind of benchmarking and best practices research for more clients in more sectors than any other consulting firm.
But the findings of this particular research helped us to connect more dots across disparate PR functions we had explored separately before. Here are a few things we learned:
Most public relations activities at over one third of the 100 largest corporations in the world today report in to their marketing functions.
Our analysis shows that at current rates, more than half will adopt this as an operating model by next year.
We have seen earlier waves of consolidation between marketing, sales and PR functions, of course—followed by an unbundling later.
In the past, these moves were typically driven by top management and/or portfolio changes and significant marketplace tumult.
But calls starting in the early 1990s for more well-integrated, targeted and cost-efficient marketing and sales support communications this time around were aided and abetted to some extent by a parallel transformation of agency/supplier and related media business models.
This integration trend was further accelerated by the evolution of the internet and a range of new web-based tools.
Indeed, several client studies we conducted in recent years found that some of the fastest growing line items of corporate communications budgets in recent years have been earmarked to activities that didn’t exist a decade ago.
Many of these activities have been associated with the advent of so-called "social media." The notion that these are “media” in the classic sense of the word is something of a misnomer that merits more scrutiny and discussion.
But our research has shown that social media activities were one of the first cases in memory where most “early adopter” multinationals failed to benefit from being first.
More striking: a surprisingly high share we tracked continued to be punished for their early gaffes, in some cases for years afterwards. In a more recent study, we also found that far too many corporations were following in the footsteps of these pioneers—without learning from their mistakes.
The assimilation of marketing and PR (along with at least some activities once managed out of IT) plus parallel shifts in recruitment have only exacerbated this situation.
More corporate communications activities are following the path forged by investor relations and government affairs over the past four or more decades, reporting in to executives with little or no PR training or experience.
As Advertising Age predicted a few weeks ago, we are also seeing "more outsiders in the CMO suite," including a handful hailing originally from public relations but with no formal training in marketing.
Our latest study found that not just social media but also employee communications, traditional media relations and philanthropic efforts, among others, were increasingly getting lost in this shuffle. More often than not, these efforts lacked a cohesive internal strategy, focus and ownership—and they frequently conflicted with already existing efforts carried out through other channels. As more firms outsource more different kinds of work, this has represented something of a bonanza for agencies, with one hand often not knowing what the other is up to, until something goes awry, typically via the internet.
Interviews we conducted with executives at a cross-section of these companies further revealed that the intrinsic benefits of public relations-centric knowledge, expertise, skills, etc. were being sublimated at best and ignored at worst by many organizations. This perceptible shift away from clear "core competencies"—what differentiates their capabilities from all other business functions—is also making corporate communications teams more vulnerable to disintermediation. This often happens in subtle ways. For example, see one survey of PR executives cited in a Journal of Public Relations Research article last year, in which a majority of respondents:
- Placed qualities like “strategic decision-making capability,” “ability to solve problems and produce results" and “communication knowledge and expertise” ahead of their “relationship-building abilities,” “ethical values and orientation” and “team collaboration ability” when it came to identifying “qualities of excellent PR leadership.”
- Deemed “a clear and compelling vision of how communications connects the organization to its publics,” “comprehensive understanding of media and information systems” and “ability to strategically construct messages,” among others, as being features they most associated with PR leadership, behind other more differentiating characteristics like “comprehensive understanding of the needs and concerns of diverse publics” and “an unwavering belief in the importance of honest and ethical organizational communications and actions.”
It seems clear from our work with clients in recent years that part of what's behind the widespread integration underway is that CEOs as well as senior management teams at too many corporations today don't appear to fully appreciate that PR is not the same thing as marketing--or vice-versa, for that matter.
While they have always shared some of the same strategies, goals and even messaging, PR and marketing have historically been distinctly different but critical business functions. This is in part because they have fundamentally different objectives and attract/develop talent with demonstrably different training, skills, capabilities, interests, expectations, etc.
Bottom line: the benefits that have historically accrued to organizations which took a cross-stakeholder approach to communications and engagement are at risk at a time when more multinationals need to take this very kind of platform-view, perhaps more than ever.
"Conscious businesses consider the needs of all their stakeholders--which is to say everyone touched by the business: employees, suppliers, customers and affected communities, as well as investors," observes Alan Murray stating the no longer necessarily obvious, in a Wall Street Journal op-ed review of a new book, "Conscious Capitalism."
The authors, John Mackey and Ray Sisodia, simplistically single out two industries--financial services and pharmaceuticals--which they claim have failed to follow this mantra even as they hold up Google, Southwest Airlines and Whole Foods, among others, as better stewardship models.
Our research suggests that there's a different, more compelling way to look at this phenomenon.
Regardless of industry, among the most all-around vulnerable insofar as their reputations are the “most admired” corporations (as ranked by the Financial Times and Fortune) of the past five or more decades. These are also many of the companies held up as models followed by others for their best practices, and a striking percentage of them have all but stopped differentiating marketing from public relations strategically and organizationally.
It's hard to write any of this and not sound like a pie-in-the-sky purist, pining for "public relations the way it was once practiced."
However, this is not a genie that can be put back in the bottle and I'm not advocating that it should be, even if that was possible. But I do believe that all of our trade associations (PR Society, IABC, Arthur Page et al) are falling all over each other and yet short on leading an intelligent, free-flowing discussion about these and other significant shifts underway that are reshaping the practice of PR.
The irony here is that even as the PR business is deemed to be "booming" overall and spending more resources year after year than ever to help identify an updated raison d'etre for the profession, the resulting research, conference agenda topics, books, college curricula and such seem to move further away from marketplace realities.
This is no longer a conversation that can be dominated by a handful of the same stalwarts. I would argue that more of today's senior corporate communications leaders--including more of those who are not members or active in any trade groups--need to pick-up this baton and carry it forward.
Collectively, they have the most to gain (as well as lose under the status quo) from any such endeavor. The very future of public relations is at stake.
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Byron Reimus, former director of corporate communications of Boston Consulting Group and VP of corporate communications at New England Mutual Life Insurance Co., has run Byron Reimus & Associates since 1989. He was a senior VP at Ruder & Finn, director of public and community relations at Consumer Credit Counseling Service, and director of PR of the advertising agency of Kamp Paiste Hammer & Beaudrot. He started out as a general assignment reporter with Gannett Newspapers. |
