Interview: Waggener Edstrom CEO discusses measurement, integration, 2013 outlook

Campaign Asia-Pacific: What are the biggest trends in what clients are asking for?

Melissa Waggener Zorkin: The sea change that started two years ago in communications has really only just begun. There were a lot of people thinking, "Oh, this move to integrated communications, the move to digital, the move to proving more ROI on everything we do...That'll be a phase." And it's not a phase.

Our clients have three things on their mind. First of all, they absolutely require a bottom-line conversation. In fact, we’ve been in RFPs where the first words out of a CMO's mouth have been, "Ok, but will it move my product?" So it's very focused around proving communications ROI as something they can take to their CEO and continue to fund. It's not just a conversation about light metrics or light measurement. It’s a conversation about bottom-line ROI, which we equate to impact.

The second is integration. Companies are looking at their advertising communities, their PR community, all their internal marketing constituencies, and saying, "Wait a minute, this is all duplicative. It doesn’t give us what we need in terms of bang for the buck." So every client we're talking to, every RFP we get, 100 per cent are asking for much more then PR. And so agencies are all having to step up and deliver on integrated communications across the board.

The third challenge: I think that there is a whole new emphasis on internal communications and internal alignment so that communications itself will actually be most efficient. There is a revolution in communications being transformational. And it's a huge challenge for clients to understand, "Who do we look for in the company to help us transform our business? What do we really want to transform ourselves into, so that the communication reflected outward really reflects the merit in the company?"

Let's call it business transformation. Let's call it communications being used to transform, versus communications just being layered on from a marketing perspective.

CAP: How is the industry progressing on the issue of measurement?

MWZ: I think it’s—for the whole industry—still difficult to get the whole measurement standardization issue out of the way. We are not standardized. We're still all over the map. Every company is producing their own.

The PR industry has not yet figured out how to systematize and completely standardize the answer to the question, "Can you move sales? Can you help me sell more stuff?"

And that's just because we haven't banded together to decide, what would those things look like? What would those standards be? And how would you parse that out? Did it happen to be just from these efforts versus these efforts?

We're like everyone else. We know we need to prove ourselves in terms of our campaigns and reputation management and planning and things that there are some standards around. And I think we're doing a good job of programmatically showing that if we say we're going to measure this, and then we do it, and then we call it a success.

But I also think it's incumbent on our industry to say which ways we're going to accept being measured and which ways we're going to say, "No, we won't be measured that way. That's ridiculous."

Were trying to change the conversation to say communications can have tremendous impact.…And I think it's incumbent upon us to do that. And to talk more about impact, not just talk about the data—"the data shows this and that". It's not about that, it’s about, "What insight have we provided? Have they changed course and direction? And what is the outcome or the impact of that?"

CAP: How is Waggener Edstrom specifically addressing this issue?

MWZ: As a company, insights and measurement, or what we call insight and analytics, has been our largest investment. We have brought on new people, and we have handed it to my partner Pam Edstrom to really get involved with and manage.

And one thing we’ve done in a big, big way is to go to our clients who have built their systems, their own dashboards, and we've said, "Let's sit down together and design a system that's going to work for you." So we've gotten very involved and made an investment in putting people on that in a customized way, so that we're actually inventing solutions that are grounded in a customer partnership—not just what we think the answer is going to be, but what matters most to you, what you want to measure.

CAP: What are your investment priorities in addition to analytics?

MWZ: Remember we're an independent agency. So any move I make, I have to fund myself. We're self-funded and we don't take on debt. And yet we put a huge stake in the ground with digital three and a half, four years ago, where we said, obviously it's going to take us some time, but we're going to transform our agency. It's the biggest investment we've ever made, it is ongoing. We still believe we’re evolving our craft. Enormously. There's still a long way to go.

So every day, we're looking very seriously, with a lot of feedback loop, at what the client is really buying. What do they really need that's going to move the mark? And we're always evolving our offerings. I feel very proud, and I don't often say that because I'm not that kind of prideful person, but I think the awards speak for themselves, and I think that the integrated plans speak for themselves: 100 per cent of them now go out with all of those components.

CAP: What's your outlook on 2013 for Asia? Any specific sectors you're bullish about?

MWZ: Asia, and I say that broadly even though I don't dissect it that way, because I know it varies country by country, is showing double-digit growth.

It's incredibly exciting for us, and incredibly validating for the investments we've been making here. From a sector perspective, it does kind of fall with some of the sectors that some of the governments have proclaimed are really important. And it's all around innovation. If you look at some of the areas that we're really well poised in, and that we work with, whether it's healthcare or technology or energy, where innovation plays a huge R&D role, and there's a huge need to educate, I think that without question this is a region that's really going to lead in a lot of those areas.

I also think it’s important for more marketing heads to really come here, and to really think about what marketing means, and can we talk about the bad and the good. I think that's a hurdle we're going to have to get over here in communications. We're going to need to be able to get over this thing about not talking about bad news.

Consumer [as a sector] is incredibly up for us, in terms of an opportunity. We have declared it as an agency focus for years and years. And we have been doing a lot of it in pockets. I think what really needs to change is that we need to be more forceful about how we market ourselves, so the consumer companies look at us and put us on the shortlist. I think that what's happened is maybe because of the way it's been done, in different parts of the company, we never really put that full, "Here is why we're different and what we stand for in consumer" as far forward as we should. And that's going to change.

The sectors that we are in, either because we were strategic or lucky, are the ones that are bellwethers. In healthcare, there's the ageing worldwide population. Technology, it's not just a geek story at all, it's about enabling people around the world to do stuff that they never could do before. I think about the bottom billion, in fact, and I think we've barely scratched the surface with the bottom billion. Wait until you see what's going to happen there. I'm incredibly bullish on that, and I'm incredibly bullish on social innovation, and I'm incredibly bullish on consumer, not just in terms of luxury goods, but also in terms of some of the new things that a company like P&G can come up with that have an impact on society.

I'm bullish on 2013, but the part that I see we have to be careful about is the investments we make, We're committed to independence, and that's not a light statement. Remember, there's one other firm that's been around a lot longer than Waggener Edstrom, and they are a very large independent company called Edelman. And we're half the age. So there's not a lot of people in our space still remaining independent. So the biggest challenge I have is focusing on the things that will make the biggest difference—making investments in the right place, going into the right places around the globe at the right time. All of those things are incredibly important for us to get right.