Interestingly, key issues from transparency to government regulation and questions of whether there is such a thing as a true global audience, to whether procurement affects the industry on a global scale, were all brought to the table by both in-house directors of communications and agency heads.
As an industry known for its creativity, the increasing attendance of procurement officers at pitches has become a worldwide issue. Will the number-crunchers have the last word over an industry that can sometimes be difficult to quantify?
The opinions were strong on this issue. GCI Latin America president Jeff Hunt believes procurement is a huge concern for the industry. "I think they (procurement officers) are having a devastating impact on the pricing and the acquisition of our service," he says. "They are devaluing the profession and commoditising it, and I think there's a lot of pressure on us to quantify value."
He believes that while procurement has now become a 'necessary evil' on the global scene, PROs shouldn't let procurement officers take over the selection process. He points to the difficulty of the process across a global account for one of his clients. While GCI thought it had negotiated a blended rate for Europe and a blended rate for the Americas, interpreted to mean the US, and maybe Canada, the client wanted a blended rate for Canada, the US and Latin America. "Blending rates with Latin America and the US - that's a problem. That's procurement, wrenching that last dollar out of us," he adds
Indeed, debates on ROI, measurement and procurement are slightly counter to PR, adds Edelman Europe president and CEO David Brain. "Personally, I find it one of the great attractions of our business, that it's not purely rational," he says. "If you are with a CEO or a marketing director, and you've got a great idea, you can generally see the value in it and so can they, although there isn't a base for financial measurement. There's an inherently unquantifiable thing in what we do that is part of the art of what we do."
Burson-Marsteller CEO Continental Europe Carlos Lareau's main concern is that the PR industry is not really proving to clients or companies that the industry is moving business results significantly. "The people you need to do this stuff, those that move the needle for clients, are expensive, and then you have all kinds of overhead costs, and then all these procurement chaps move in. They aren't going to go away. What do we need to do to re-engineer our business if necessary? I do think a number of companies are questioning the value of our profession and our industry."
Conversely, procurement people can be an ally in protecting a globally consolidated account claims Ketchum senior partner global practices Rob Flaherty. "They can say 'other agencies can't play here' because our procurement model was to consolidate with one agency," he says. "Also, they will make sure if a rate is set, they will live up to it."
He does, however, agree that there are some frustrations, particularly with setting a unified rate worldwide.
From the client perspective, however, the procurement process can help them learn more about the agencies pitching for business, as well as assist with internal reflection. Mike Lee, director of communications and public affairs for London 2012 - the London organising body bidding for the 2012 Olympics - recently put agencies through a procurement process and found exactly that. "The agency we had to work with to do that ended up going exactly with the framework that we wanted to go with in terms of defining global reach, experience and creativity," he says.
Lee's ultimate audience is, of course, the 125 International Olympic Committee members and there is a marketing communications strategy for each one.
For communicators such as Lee, heading up what could justly be called a global election campaign, a global strategy is an overlay; Hill & Knowlton has secured the London 2012 PR brief and will promote the bid internationally.
But, aside from this kind of project, is using one agency a trend for global accounts? Can just one agency be used worldwide?
Patchiness between global offices of agencies is a critical factor, claims Reuters director of corporate communications Simon Walker, especially in a market such as Asia. "I can't see that we would ever use one agency to cover the world," he admits. "I don't believe agencies can guarantee consistency between offices. If you can afford to, I think you're better going off with different agencies."
Visit Britain VP of strategy and communications Sandie Dawe agrees. While usually handling PR in-house, the organisation has recently started engaging PR agencies, and Dawe admits it's quite hard to find an agency that functions at the same consistently excellent level everywhere it operates. "It starts to get more complicated in terms of trying to run a huge campaign, with quite a lot of money, in a crisis situation," she says.
Agencies argue, however, that a solution can be found to this challenge by introducing a 'lead-agency status'. Flaherty suggests this will help eliminate any agency proclaiming it is perfect in every region, and also reduces the risk of admitting that you're not strong in every area.
Appointing a lead agency will also give some consistency. "Doing this has helped us really globalise the whole agency by saying, 'OK, we need to make that area stronger in one office', and over time it does become stronger," he says. "In the meantime, you have another of your offices working on it. Yes, the client wants global coordination, but they need to ask and we need to tell them honestly where we are strongest."
Honesty is key and client relationship management is the pin that holds global accounts together. Lee, who has worked both in consultancies and in-house, says the good consultant knows how to spot the added value that is needed by the client. "Last year, I had a consultancy that came in with an all-singing, all-dancing offer, but it was actually too big for what we were doing," he explains. "But as soon as they mentioned that they worked on what was most important for us, which was managing our relationships with Brussels, this changed our perspective."
Caroline Wunnerlich, GPC International senior vice-president and managing director, Brussels, agrees. "There's going to always be a role for excellent client relationship management on the agency part," she says. "When you are talking about a global relationship, the client needs to feel there are at least a couple of senior people who really understand their business and their needs."
Of course, while there are many agencies and in-house teams that operate on accounts across the globe, do their target audiences actually cut across geographies?
According to I-Flex Solutions senior manager, communications, Sunil Robert, one of the biggest challenges is to take the best practices and the proven methodologies of the global agency and translate them into a global media situation and drive results. "If you look at many markets, such as Malaysia or Taiwan, each office is driven by different dynamics and often we sense frustration from our management side because there is an inability from the agency partners to see the big picture and get results," he says.
On the other hand, Weber Shandwick Germany managing director Klaus Weise argues that the problem doesn't always lie on the agency side, and that the client sometimes has weak PR managers in other countries. "Occasionally, particularly across the technology sector, the client will quite often change their business strategy or their communications strategy, and it can make it difficult for agencies to execute," he says.
The 24/7 nature of the media, especially with online news, is a further reason why it can be a challenge to have country specific marketing or PR, adds Dawe. "Now that everyone has the opportunity to see everything, you can't just launch a campaign somewhere and say 'that is specific only to Poland'," she says.
Is the answer to these challenges appointing local people on the ground to carry out the accounts? After all, understanding how a local market works is imperative to all types of business. The Hoffman Agency CEO Lou Hoffman says it depends on the talent available. "When we were ready to enter China, philosophically we wanted someone from the market," he said.
"We brought them to our office in Silicon Valley for 24 months and then put them in the market. You can do that once, but most of us don't have the appetite from a financial or time standpoint to do that every time."
He also points to the fact that there could be a problem with the fact there's a lot of 'American-itis' around. "So many of the decision makers (in PR) are American and you see a lot of them actually have in their titles 'global' or 'international' PR, but they don't really have the knowledge base and see things strictly as an American - that's something that we are consistently dealing with," he says.
He goes on to say that there is a cost associated with running a global programme. "I think we see a tendency with our client base and prospects to believe that you take the dots where you have your programmes and you add it up and that could be the cost of the programme," he says. "But, in our view, to really drive a cohesive programme where you have consistency and leverage, and where you are working as a virtual team, there is a cost associated with that, and we find a fair amount of resistance to paying for that cost."
Understandably, there are certain challenges when running a global programme.
Yet a clear message came out of the debate and that was the ability to think globally. "I think we all get caught in the trap of thinking in our patch and also thinking about the here and now," concludes Hunt. Instead, it is time to start focusing on where the future of global business lies.
Global report card: Operational details of 20 of the leading players in the international PR market
APCO WORLDWIDE
Grey Global
Total staff: 353
Global structure: The agency is managed by regional directors who report to the CEO. Accounts are often shared globally with one team leader overall and drawing upon resources in any office
Biggest international accounts: Dow Corning - North America, Europe, Russia, Asia; Borealis - led from Brussels, supporting client operations in EMEA; Microsoft EMEA
Global performance: International revenue has increased more than 10 per cent on last year. International staff numbers have not changed over the past year
Best-performing regions: All regions experiencing growth. North America remains strongest region
Future plans: APCO is considering entering eastern Europe as well as expansion into Asia, now it has 20 per cent of its workforce in four offices in Greater China
BRODEUR WORLDWIDE
Omnicom
Total staff: n/a
Office locations around the world: Its global network has more than 70 offices in more than 50 countries across North America, EMEA, Asia-Pacific and Latin America
Global structure: Each country has an agency CEO and each region has a leader. Regional leaders form the agency's global leadership team, reporting to CEO Andy Coville. Each global client has one primary relationship manager
Biggest international accounts: IBM - work across all regions; Avnet - work across 17 countries; WRQ - managed from London with support from Boston and Germany
Global performance: Growth is gradual, but has returned. Most country operations are reporting increases in revenue in 2004 and more clients than in 2003
Best-performing regions: US, EMEA, Asia-Pacific, Latin America
Future plans: Further expansion in Europe and Asia, particularly China and India
BURSON-MARSTELLER
WPP
Total staff: n/a
Global structure: A network of business managers report to regional CFOs, a worldwide CFO and controller, before reporting to worldwide CEO and president Chris Komisarjevsky and a 12-person executive board
Biggest international accounts: US Treasury, Bureau of Engraving and Printing and Federal Reserve System - North America, Latin America, Europe, Asia; AstraZeneca - US, Latin America, Sweden, Norway, Spain, UK and Turkey (affiliate), Japan; SAP - across 47 offices globally
Global performance: Each region has shown growth in revenue and headcount has increased
Best-performing regions: China, Japan, India, Spain, France, Eastern Europe, Scandinavia, US
Future plans: Organic growth
COHN & WOLFE
WPP
Total staff: n/a
Office locations around the world: US (3), UK, Italy, Germany (2), Switzerland, Spain, Canada (2 partly owned), with affiliates in Sweden, Belgium, France, Greece and UAE
Global structure: The agency is financially structured by office location, with certain client relationships overlapping markets
Biggest international accounts: GSK - account operated from US and UK wholly owned offices, Europe wholly owned and affiliate offices; Pfizer - US and Europe; AstraZeneca - US, UK wholly-owned offices, Europe wholly-owned and affiliate offices
Global performance: The agency has seen a small but significant revenue increase across offices worldwide, with no client losses
Best-performing regions: US
Future plans: To invest in senior talent in the US. Concentrate on organic growth in Europe. Considering a Chicago location in the US
EDELMAN
Independent
Total staff: 1,691
Office locations around the world: US (12), Canada (2), Latin America (3), Europe (12), Asia-Pacific (10), with affiliates in Latin America, Europe and Asia-Pacific
Global structure: Edelman combines local country and regional knowledge with specialists experienced in specific practices and disciplines around the globe. Network also includes four speciality firms: Blue (advertising), First&42nd (management consulting), StrategyOne (research) and BioScience Communications (medical education and publishing)
Biggest international accounts: Microsoft - Asia-Pacific, Canada, Europe, Latin America, US; Pfizer - supported by wholly-owned offices in US, Canada, Europe, Asia-Pacific; AstraZeneca - US, Canada, Europe, Asia-Pacific, Latin America
Global performance: International revenue increased by 0.1 per cent, and staffing levels fell by one per cent
Best-performing regions: Asia Pacific, UK (London), Spain, Holland, Canada, US
Future plans: Looking closely at a number of markets in Asia-Pacific, establish an entertainment unit in the US and looking at public affairs and healthcare in the EU
FLEISHMAN-HILLARD
Omnicom
Total staff: n/a
Office locations around the world: China (3), Hong Kong, Malaysia, Philippines, Australia, Korea, Singapore, Japan, Mexico, the Netherlands, Belgium, Ireland, UK, Spain, Germany, France, Italy, US, Canada, South Africa
Global structure: Each region has practice groups responsible for staff development. A network of client relationship managers exists to serve the needs of clients, regardless of geographic location or practice group specialisation
Biggest international accounts: Abbott Laboratories - North America, Europe and Asia; Gatorade - North America, Europe and Asia-Pacific; Procter & Gamble - North America, Europe and Asia
Global performance: The agency's operations in Asia-Pacific, Europe, Latin America and Canada are all experiencing year-on-year growth
Best-performing regions: All on track for growth, particularly Asia-Pacific
Future plans: Organic growth plus potential expansion into central and eastern Europe, Latin America and Asia-Pacific
GCI GREY
Global
Total staff: 550
Office locations around the world: The agency has 47 wholly owned offices across North America, Latin America, Asia Pacific and Europe, with 17 affiliates in Australia, Japan, Korea, Argentina, Peru, Venezuela, Columbia, Singapore, Estonia, Israel, Latvia, Lithuania, Nigeria, Ireland, Switzerland and the UAE
Global structure: For multinational clients, the agency allocates client relationship managers for each geographic region. These managers then collaborate with other managers on global business when necessary
Biggest international accounts: Dell - North America, Europe, Latin America, Asia; Eli Lilly - North America, Europe; Bayer - North America, Europe
Global performance: International staffing levels have increased by approximately ten per cent. Performance has been consistent with expectations, with new business wins over the last year
Best-performing regions: North America and Europe
Future plans: Would like to expand its offerings in Latin America and Asia. Plans to invest in Tokyo, Beijing, Kuala Lumpur and India
GOLIN HARRIS
IPG
Total staff: n/a
Office locations around the world: The agency has 26 offices throughout Asia, Europe and the US. Affiliated offices in the Middle East, Asia-Pacific, Latin America and eastern Europe. Opening an office in Dubai this summer
Global structure: Both geographically and by practice group. Many accounts are served by multiple offices and practices, with one key individual as the client relationship leader
Biggest international accounts: Florida Department of Citrus - US, Canada, Japan, UK, France; Cotton Council International - UK, Germany, Hong Kong, with an affiliate in Korea; DHL - Singapore, Hong Kong, Taiwan, Japan, Weber Shandwick in Australia
Global performance: No meaningful change from last year. While Sars was a factor in Hong Kong and Taiwan, the offices have fully rebounded
Best-performing regions: US and Asia
Future plans: Investing in all regions and in district speciality practices, for example employee communications and social marketing
HILL & KNOWLTON
WPP
Total staff: n/a
Office locations around the world: EMEA, North America, Asia-Pacific, Latin America, with affiliates in Colombia, Venezuela, Canada, Vietnam, Peru, Pakistan, India, Equador Global structure: Structured by region and by practice. Key client relationship managers implement client reviews and deliver client service across regions and practices
Biggest international accounts: HP - US, Europe, Asia Pacific; NASSCOM - US, Europe, Asia-Pacific; Johnson & Johnson - US, Europe, Asia-Pacific
Global performance: Revenues have increased over the past year, with the agency seeing more intra-regional growth than transatlantic growth. Most interest from companies based in Asia and Europe with interests in investing in the UK
Best-performing regions: Europe, Latin America, Asia-Pacific
Future plans: North Asia is a primary focus. Considering acquisitions in major markets, but the agency's priority is to create organic growth
HOFFMAN AGENCY
Independent
Total staff: 97
Office locations around the world: US (2), UK, Germany, China (2), Hong Kong, Japan, Korea, Singapore, with affiliates in Australia, India, Philippines, Malaysia, Thailand
Global structure: Global account leaders provide a single point of contact to the client and are typically in the same location as the client's global or regional headquarters. Operationally, the deployment of IT is centralised in Silicon Valley
Biggest international accounts: Philips Semiconductors - Europe, North America; Ipass - Asia, Japan, North America; Proxim -Asia, Europe
Global performance: Revenue has increased by 22 per cent, and revenue from clients with multi-country programmes has increased by 46 per cent
Best-performing regions: China, Japan, UK and Germany
Future plans: To invest in China. To open a third European office in the Netherlands
INCEPTA
Independent
Total staff: 2,043
Office locations around the world: UK (8), Belgium, France, Germany (2), Hungary, Italy, the Netherlands, Poland, Portugal, Spain (5), Sweden, Switzerland, US (14), Ecuador, Brazil, China (3), Hong Kong, Tokyo, Singapore, South Africa (3), India, UAE
Global structure: The agency is structured on a geographic basis across its three regional boards of North America, Europe and Asia-Pacific
Biggest international accounts: Undisclosed
Global performance: International revenues have decreased by four per cent, and international staffing levels have decreased by seven per cent. Primarily a specialist financial and corporate PR shop, revenues are affected by levels of global corporate activity
Best-performing regions: Asia, US, Europe
Future plans: No further expansion planned as the agency feels it has representation in all the major markets
KETCHUM
Omnicom
Total staff: n/a
Office locations around the world: North America (9), Latin America (2), Asia Pacific (5), Europe (5), with further affiliates in Latin America, Asia-Pacific and EMEA
Global structure: Most work is administered through its global practices - 40 per cent of the business is serviced on a multi-practice, multinational basis. Accounts are managed from the office with the most relevant expertise
Biggest international accounts: Eastman Kodak - North America, Europe, Asia Pacific; FedEx - North America, Europe, Asia Pacific; Roche - Europe, the Americas
Global performance: International staff retention rates stood at 80 per cent in 2003. Wins include ConAgra as its first agency of record, and FedEx/Kinko's. European business is up 20 per cent, with London leading the way
Best-performing regions: US, Europe, Latin America, Greater China
Future plans: To realign Ketchum's affiliate network to improve client service on network business and position Ketchum better in key markets. Sees Mexico poised for significant growth
LEWIS COMMUNICATIONS
Independent
Total staff: 125
Office locations around the world: Wholly owned offices in US (4), Denmark, the Netherlands, UK, Spain, Italy, Germany, France, Singapore, Sweden, Australia
Global structure: With more than 95 per cent of revenue from the technology sector, practices overlap between all offices. The agency is structured by location, by city (in the US), by country and region. A single director may have overall control of the client relationship for all offices
Biggest international accounts: Salesforce.com - Europe, Asia-Pacific; WatchGuard Technologies - US, Europe, Asia-Pacific; Antec - US, Europe, Asia-Pacific
Global performance: International revenues have increased by 11 per cent, while international staffing levels have increased by 20 per cent
Best-performing regions: US West Coast, Singapore, Benelux
Future plans: Increasing resources in US and Asia-Pacific. Through organic growth, the agency is considering entering Hong Kong, New York and Japan. The agency is also examining acquisitions and a potential Nasdaq flotation
MANNING SELVAGE & LEE
Publicis
Total staff: 950
Office locations around the world: US (9), China (2), Germany, Hong Kong, UK, Italy, France, Canada, with partially owned offices and affiliates in the Americas, Asia-Pacific and EMEA Global structure: The agency's offices are managed by four regional presidents, who report to MS&L chairman Lou Capozzi. Multinational accounts are often led by worldwide account directors
Biggest international accounts: Philips - US, Europe, Hong Kong, Dubai; General Motors - North America, project work from its London, Seoul, Shanghai and Hong Kong offices; Procter & Gamble - North America
Global performance: There was no change in international staffing levels, and revenues were up slightly over the previous year
Best-performing regions: Asia Pacific and UK (London)
Future plans: Asia Pacific continues to be a key area of investment. Seeking to identify new partners around the world, particularly in Europe
OGILVY
WPP
Total staff: n/a
Office locations around the world
The Americas (9), Asia-Pacific (22) and EMEA (30)
Global structure: The agency's three regions each have chief executives who report into worldwide CEO Marcia Silverman. The agency also has global practice heads for each of its seven practice areas and client service leaders who work with accounts on a global level
Biggest international accounts: DuPont - US, Europe, Asia-Pacific; Unilever - US, Europe, Asia-Pacific; CFA - US, Europe, Asia-Pacific (with affiliates in Italy and Germany)
Global performance: International revenues increased by ten per cent and international staff increased by 7.8 per cent (May 2003 to May 2004)
Best-performing regions: Americas and Asia-Pacific
Future plans: The agency is looking at new opportunities in South and Latin America, as well as in Italy and Germany. Other areas of interest include financial services in Hong Kong and employee comms in Europe, Asia and the US
PORTER NOVELLI
Omnicom
Total staff: n/a
Office locations around the world: The agency owns 35 offices and has 58 brand partners across North America, Latin America, Asia-Pacific, EMEA
Global structure: The agency is structured on both a practice and regional basis. Global practice leaders oversee respective local and regional practice leaders. Each global client has local relationship managers in each country in which it is doing work for them, as well as one main global client relationship leader
Biggest international accounts: HP - the Americas, Asia Pacific, EMEA; Qualcomm - the Americas, isolated project work in Asia and Europe; Gillette - the Americas and select markets in Europe and Asia-Pacific
Global performance: The agency has seen modest growth over the previous year and has won additional business with several global clients who have been consolidating their business, such as Wyeth and Gillette
Best-performing regions: US, France, Belgium, Japan and Australia
Future plans: To re-enter China and strengthen its presence in Eastern Europe. Considering acquisitions to expand various practices in local markets
PUBLICIS DIALOG
Publicis
Total staff: 1,323
Office locations around the world: France, Germany (2), Italy, UK (2), Switzerland, Austria, Holland (2), Hungary, Finland, US (8), Canada (2), Mexico, Brazil, Asia-Pacific (8) with an affiliate in Vietnam
Global structure: Services offered in each local office are dependent on client and market needs, with the majority of offices multi-disciplined
Biggest international accounts: Allied Domecq - global, led by London office; Nestle - across 60 countries; Renault - across 27 markets
Global performance: Revenue and international staff numbers has increased. Several new offices have opened in the US, Europe and Asia-Pacific
Best-performing regions: Europe
Future plans: Potential for expansion into Asia, predominantly China, Korea and India, as well as Latin America. To expand further in the US and maintain investment in Europe
RUDER FINN
Independent
Total staff: 625
Office locations around the world: Wholly owned offices in the US, UK, France, Israel, Singapore, Hong Kong, China, Australia. Affiliates across Europe, Asia and Latin America
Global structure: Major business focus in each office includes healthcare, corporate, technology and consumer marketing. Structured globally by office locations and each has expertise in all practice areas mentioned, and all collaborate with practice heads
Biggest international accounts: Novartis - New York, Europe, Asia, Latin America; Infonet - New York, Singapore, UK, Mexico (affiliate); Jamaica Tourist Board - New York, Canada (affiliate), South America (affiliate)
Global performance: International revenues have increased by 18 per cent in 2003/2004, and international staffing levels have increased 17 per cent since 2002
Best-performing regions: Asia, UK, Israel, Australia and Europe
Future plans: Undisclosed
TEXT 100
Next Fifteen
Total staff: 386
Office locations around the world: US (5), EMEA (10), Asia-Pacific (9)
Global structure: The agency is structured vertically around geographic regions and horizontally across technology practice areas such as corporate comms, media relations and international consulting
Biggest international accounts: Undisclosed
Global performance: International revenue increased by 14 per cent from US$16.2 million to $18.5 million in 2003. International staff levels increased by two per cent
Best-performing regions: China
Future plans: Not considering expansion into any one region. Looking for new opportunities to grow organically or make acquisitions
WEBER SHANDWICK
IPG
Total staff: n/a
Office locations around the world: Seventy-five wholly-owned offices in 25 countries across North America, Latin America, EMEA, Asia-Pacific; with affiliates in Latin America, EMEA and Asia-Pacific
Global structure: Structured globally by both practice and office locations. Executive management team is an integrated amalgam of regional managers and global/regional practice managers
Biggest international accounts: Agilent - Silicon Valley team leads the account; Microsoft - Seattle office leads the account, with teams in Los Angeles and London; Pfizer
Global performance: There has been no change in international staffing levels. North America and the UK are demonstrating the greatest growth and potential for further growth. Account wins include Cisco and Electrolux
Best-performing regions: North America, UK and Asia
Future plans: Investing further resources in building its healthcare capabilities in the US and Asia-Pacific. Also investing in China and Eastern Europe.