Arun Sudhaman 18 May 2011 // 11:00PM GMT
PRAGUE: In an entertaining session that capped the Holmes Report’s first ThinkTank Live summit in Prague, the heads of the world’s two biggest PR firms debated how the industry can earn itself a more central brand-building role amid increasing competition from other disciplines.
Moderated by Holmes Report editor-in-chief Paul Holmes, Edelman CEO Richard Edelman and Weber Shandwick CEO Harris Diamond robustly exchanged views on everything from social media, talent, measurement and creativity, in front of a packed house at Prague’s Radiopalac.
Citing research from GolinHarris, Holmes kicked things off by asking why PR agencies are rated so poorly by marketers for their brand strategy and planning abilities.
“I think we have to redefine the problem,” responded Edelman. “We have to explain to the CEO that he/she is not selling to the consumer. It’s a stakeholder universe. Ad agencies are brilliant at simplicity. Complexity is where PR agencies can win.”
Research & planning
Holmes followed up by asking whether PR agencies need to up their skills as far as research and planning are concerned. Diamond cautioned agencies not to lose their creative abilities. “We have to remember that research only goes so far,” he said. “We are all about creativity, and that is, to some extent, about gut. We confuse our wanting to be creative which is key to our success with our wanting to be advertising people.”
Diamond added that planners are now a necessity in PR agencies. “They are some of the most important people for our future. The issue is clients don’t pay for it.”
Edelman took a slightly different view, pointing out that it is a “fool’s errand for PR to follow advertising folks.”
“PR is a superior brand - we are stakeholder-oriented, not just limited to consumers,” he said. “We deal with complexity better. We have the benefit of being able to be much faster and much less planned. I want to have some planners, fine. But the world is about conversation, and that is not 100 percent predictable.”
Diamond countered by saying he was “less concerned about whether we are perceived as being more like an ad agency.”
“The reality is that there are certain things those people bring to the table that we should look at,” said Diamond. “To have those larger budgets is fundamentally at risk.”
Social media & content
Turning to social media and content, Diamond admitted that PR firms are battling with other disciplines, particularly in terms of execution.
“We are in the idea creation business, which means it is all about execution,” he explained. “Clients are desperate for ideas. Look at Pepsi Refresh. If you have the idea, they will naturally say to you - now how do you execute it? If you leave the space for others they will take it. But I do believe it is a battle.”
Edelman likened winning the client’s trust on idea to being “just like dating.” You have to win the confidence of the person on the other side of the equation,” he said.
However, in response to a later question from the floor on paid media, Diamond said that he was not keen on his agencies rolling out advertising services. “I think it takes much more creativity to earn and much more intellectual capital to understand how to get it. I do think we have to be content creators - but even that is most of the time not stuff we are going to pay for. The space we operate in gives us a tremendous opportunity to differentiate ourselves.”
Change & talent
Taking his theme further, Diamond reminded agencies that “what marketers are looking for is great ideas to convince someone to buy a product, like them more, or minimize a crisis.” He also called for the industry to “strut our stuff a bit more.”
“We have to give people in our firms permission to fail,” agreed Edelman. “We are excessively risk-averse, controlling and hierarchical.”
Holmes asked what agencies needed to do differently in terms of attracting people, bringing lengthy responses from both panellists.
Diamond point out that the PR industry remains one of the most desirable professions among young people. “The question is are we getting the people that we want to have?”
For Edelman, meanwhile, the issue comes down to money. “We have to do better at paying people better,” he said. “That means our organisations have to be more rectangular, instead of a triangle. We need to change and start charging higher fees to retain talent.”
“I think the perception of our industry has dramatically changed over the years, to a place where creativity is celebrated, where consulting is celebrated,” added Diamond. “But I agree with Richard, we need to get clients to pay us more so we can pay people.”
Measurement & evaluation
Diamond also called for agencies to adopt a standard set of metrics, citing the advertising industry’s success in this regard. “Every agency has tendency to use their own metrics to give themselves a leg-up. I wish we as an industry had a metric similar to advertising - if we had that, I think clients are willing to spend money on us.”
“We are going to invest in technology,” said Edelman. “We have to push this, it’s not funny now. Clients are spending real money on us.”
Two questions from the floor underscored the importance of emerging markets to PR networks. Diamond pointed out that “opportunities are immense in China,” but Edelman reminded the delegates that there were still plenty of growth opportunities in EMEA.
“First, the only market that has only embraced PR fully is the UK,” continued Edelman. “There are huge internal departments at most of the French and German companies - I am amazed that in the past recessions, those weren’t reduced in favour of outsourcing. The bulk of our clients are Anglo-American, so I think there is tremendous opportunity in France and Germany. I hope the internal departments get squished - I hope there aren’t too many internal people here. Secondly, the markets are still very advertising-dominated.”
As to whether the rise of other regions would change the leadership profiles at global PR networks, Diamond responded that “65-70 percent” of PR spend remains in North America. “And the recovery has been dramatically faster in the US, than the rest of the globe. The EU professes to be a marketplace of 300m people - but we all know its siloed, it’s not necessarily a common, large enough group of people.”
Both Edelman and Diamond agreed, though, that networks had to “do better at taking it beyond Anglo-American folk.”
“The truth of the matter is there was a moment in time where expertise was coming from two to three locations,” said Diamond. “Those days are changing.”