PR Communicated: Reassessing the values of public relations

A lot has changed since Media's last PR roundtable two years ago. Not only has client interest in the discipline - which was already strong at the height of the downturn - risen, but progress has also clearly been made in addressing digital media beyond simply stressing the importance of "listening".

Nonetheless, while the atmosphere was decidedly businesslike, no one was under any illusion that the way forward is clear. Edelman's Damian Coory, managing director for Hong Kong and Taiwan, opened the discussion by asking if agencies themselves had become distracted by the online medium at the expense of effective communication. "Are we placing too much emphasis on the medium and not enough on the message?" he asked rhetorically, adding: "We have become mesmerised by a new toy that is in danger of becoming like the Emperor's New Clothes."

While reluctant to agree outright, Tim Sutton, regional chairman of Weber Shandwick, admitted that the "game has been changed" by digital media - so much so that any semblance of control has all but disappeared. "We know we live in a glass house that everyone can look into. But the counter argument is that we know every week brings a new medium and everyone rushes like lemmings to a cliff. There is a fundamental in PR that goes back to the intrinsic issue of reputation: what do you want to say, and why should anybody listen to you?"

Clearly, educating clients on this matter remains a priority. As John Morgan, regional Greater China MD for GolinHarris, noted: "We spend as much time going through the ABCs of social media with clients as we do actually working in social media."

Morgan acknowledged the generation gap that exists both on the client side and within agencies. He said that while few at CEO level really understand the impact of social media on their business, there was a need on both sides to bring in knowledgeable staff "under the age of 30". But the biggest problem, he said, was still the fear of negative commentary online.

Shari McCullough, director of Burson Marsteller in Hong Kong, argued that this was where PR firms should have an advantage over other disciplines, provided they approach the issue with sensitivity.

"We have to bear in mind owned media and social media. Paid and earned are different to owned and social. But you can't just tell clients to embrace the chaos. You have to show them how to embrace it in a safe way, by letting go of control a bit and doing real-time research."

McCullough added that the resulting message "cannot be corporate, legalistic or 'salesy'" if it is to build credibility among the target audience.

There may still be plenty of work to be done, but with no single discipline having cemented itself as a digital leader, the question arose as to whether PR was able to sit at the centre of a client's communications agenda. To this, Sutton appeared cautiously optimistic. "We have to be wary of hubris," he said. "The advertising model has been challenged. PR revenues have been more resilient, and PR agencies should be one of the parties at the centre. But we should not be complacent."

Indeed, Coory noted that although PR's position had been elevated, the nature of advertising agencies was gradually changing too. "They are starting to move onto PR's turf. We would be foolish to think this is all good for PR. In a sense, we are going to have a new competitor as the lines between PR and advertising become blurred. Every time we talk about digital or social media, we are really just talking about having a conversation."

One practical challenge that everyone agreed on was that of pricing, given the difficulty in predicting the amount of time spent on social media platforms. As PR and advertising move closer together, they also share the same problems surrounding accountability. The mass of data offered by online media is encouraging on the surface, but Sutton reminded the group of the need to establish a benchmark for meaningful measurement.

"The needle has moved, but there is still no industry-wide standard," Sutton said. "I don't especially want to compete with other agencies on measurement. I would rather compete on other matters. The rise of procurement is requiring us to provide metrics and is a big issue that everyone in the industry is feeling."

A further complaint was the lack of financial investment in PR activities in the region. Despite the hype, it would appear that Asia still stands relatively small on the global stage for most multinational clients.

"Compared to the US and Europe, in Asia we have a long list of smaller clients," observed Sutton.

"Markets like China are extremely important, but the budgets are tiny in comparison with the US.

Why should this be the case? For most of our clients, we still account for a very small percentage of global revenues, and the gap is not immediately narrowing. BRIC countries are a priority, but they are given terrible budgets. Companies are not putting their money where their mouth is."

Several possible reasons were presented for this. Sutton himself admitted that in many ways, PR had yet to truly "cut it" in the region to the extent that it could justify the same level of spend as in the West. Morgan added that the image of Asia as a low-cost region was also holding things back.

"There is still the perception that China is cheap, and somehow that filters down to us. We need to get [our global clients] over here to realise that professional services cost more."

Winnie Lai, Waggener Edstrom's Greater China vice president, explained that the level of competition in China was a major contributing factor to the low rates. "You are in competition with international and local companies, and those formed by the former staff of Western agencies.

People are very aggressive, and even if you are delivering results the client will still be approached by other agencies, so prices are being driven down by market forces. But things are not all that cheap. Staff costs in mainland China are almost the same as in Hong Kong. Winning business in China is not that difficult, but working on it is."

Lai claimed that as a relatively new concept in China, PR had yet to be valued beyond being a basic commodity, and that education was needed to stop the professional level from being diluted. "I thought Asia would be far more advanced than it is now. We will not buy editorial coverage, but that is putting us at a disadvantage in China."

That view was echoed by McCullough, who pointed out that the majority of multinational agencies "don't get to see the whole pie" in the China market. "Clients use multinational agencies for strategy, but go to local firms for execution," she stated.

A further challenge faced by the PR industry, as by all disciplines, in markets such as China, is that of attracting and retaining talent. Coory pointed out that, perhaps unsurprisingly given the working conditions outlined by Lai, agencies were often not perceived as long-term career options.

"A concern is that the goal for a lot of local talent is to go in-house," Coory explained. "We are trying to create a better holding environment where they see us as a longer-term consulting career, rather than a stepping stone, but it is still a major challenge."

Sutton contrasted this with the situation in the UK, where agencies were typically a more desirable career destination than an in-house role due to the opportunities for strategic development. He noted that the retention rate in Shanghai was particularly low. "Our biggest loss is people going to clients because they perceive they are going up the food chain," he said. "And the reality is, in most cases, they are - certainly at the account executive or account manager level. The whole industry has to raise the bar here and be tougher on standards, such as on giving promotions."

According to Lai, the turnover rate in China is in some cases as high as 150 per cent. "You have got to accept that to a certain extent, this is part of life there," she said, concluding the discussion with an insight into Chinese human resources management.

"Apart from all the standard retention measures such as training, exchanges and mentoring, one area that is important when working with local staff is the concept of guanxi (relationships). Staff in China place greater value on the relationship with their boss. As a boss, it is important to show interest in their family, their likes and dislikes. You need to build a more personal relationship than in other markets."

Read the essays submitted by each PR firm:

• The importance of diversity and cultural awareness - Timothy Sutton, Weber Shandwick
• Cultivating talent to ride the digital revolution - Winnie Lai, Waggener Edstrom
• PR's role in driving competitive advantage in healthcare - Joanne Basford, Tonic Life
• Get serious about tackling issues online - John Morgan, Golin Harris
• What's the big idea? Taking ownership of ideas that resonate - Jonathan Sanchez, Edelman
• Opportunities for compelling communication and relationship building - Bob Pickard, Burson-Marsteller

This article was originally published in the 26 August 2010 supplement PR Communicated.