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10 Ways To Design The PR Agency Of The Future

Paul Holmes  03 May 2013

The financial, political, technological and media worlds have changed dramatically since the start of the 21st century. The global economic crisis, stagnation in the developed economies and growth in emerging markets, the rise of digital and social communications channels and the fragmentation of mainstream news outlets—these changes have all prompted new threats, and opened up new opportunities, for the public relations business.

But to take advantage of these changes, public relations firms need new business models, new—and more diverse—talent, and new ways of thinking. To put it mildly, a public relations agency designed to meet the major challenges of the 20th century is unlikely to succeed in the 21st.

Yet many of the world’s largest agencies, and a surprising number of midsize firms, continue to operate as if little has changed. Their infrastructure is a legacy from a different age, they have the same practice areas (often conflating actual practices such as corporate communications and product marketing, with industry sectors such as healthcare and technology), the same geographic structures, the same silos that served them (not always well) a decade or more ago.

And many of them have failed to integrate new ideas, new technologies and new media, into the way they do business—often treating changes that ought to disrupt existing models as if they can simply be bolted on to the old model.

Every time they do that, they miss an opportunity to create something genuinely disruptive, and they double down on their investment in traditional, vestigial, thinking—increasing their vulnerability to new firms with new ways of thinking.

Many of the firms in this volume are already acting on some, perhaps many, of the ideas presented here. Some have radically restructured their business using their own ideas of what the future will demand. It’s doubtful whether anyone has all the answers when it comes to creating a new model for the public relations firm, but there are several ideas that all agencies should be exploring or considering.

1. Big data at the center

Three years ago, I found myself in Davos—at a conference called Communication on Top—debating the future role of public relations in a shifting world. My own optimistic view was challenged by Marshall Sponder, an expert in web analytics. His major complaint: that PR people did not understand how to use big data; his big prediction: that within a couple of years, every PR agency that wanted to be taken seriously would have a chief data officer, playing a significant role in the leadership of the organization.

To say that progress on this score has been mixed would be extremely generous to the industry as a whole. There has been plenty of evidence that putting data and analytics at the center of communications can be incredibly powerful—the Obama re-election campaign is the most obvious example—but there has been incremental progress at best when it comes to using data to drive marketing and corporate communications more broadly, and only a handful of firms have anyone in a role roughly equivalent to Sponder’s chief data officer role.

2. Insight to drive meaningful creativity

One reason data is important is that it lays the foundation for the kind of insight—into stakeholder attitudes, values, beliefs and actions—that ensure relevance.

For too long, many public relations people—like the baseball scouts in Michael Lewis’s Moneyball who believed that they could identify a good baseball player based on little more than attitude, posture, and physique—have operated on the assumption that their years of experience alone meant that they knew a good PR campaign when they saw it.

But all too often, the ideas they generated were creative just for the sake of it. They resonated with reporters, but not with the wider audiences they were intended to reach. They provided entertainment value but didn’t do anything to influence behavior. They were “great” PR ideas with no business benefit.

Great data alone will not ensure great PR programming. But better data will lead to better insights. And better insights will lead to more creative public relations ideas—ideas that solve real business problems.

3. Understanding the human brain

Edward L Bernays would insist loudly to anyone who would listen that public relations was “applied social science.” That was true in the industry’s early days, when Bernays and others were pioneering a new discipline, and it remains true today.

What has changed is that we have new ways of understanding how the human mind words, how people decide what to believe, how they process information, how they make choices.

Most PR people could benefit from going back and reading Bernays’ classic The Engineering of Consent. But they should also be reading more recent volumes such as The Tipping Point by Malcolm Gladwell, Nudge by Richard Thaler and Cass Sunstein, Made to Stick by Chip Heath, or Contagious by Jonah Burger. Or listening to neuroscientists like David Eagleman, who presented at our first Global Public Relations Summit in 2012 and provided numerous insights—some of them quite shocking—into the ways emotional responses can overrule the rational mind, and the unconscious supersede the conscious.

Understanding the latest thinking in this area is essential for anyone hoping to change attitudes and behaviors.

4. Managing reputation is about more than just communicating reputation

There are two necessary preconditions if a company is to have a good reputation (by which we mean a reputation that strengthens the relationship between a company and its key stakeholders, reducing risk and providing greater opportunity). First, it must earn that reputation; then it must communicate what it has done to earn it.

The first of those things is by far the most important; traditionally, public relations firms have spent far more time and energy on the second. There is probably still a very good living to be earned that way—effective communication remains important; but firms that can help their clients earn the right kind of reputation—by helping to shape policy rather than explain it—will deliver and derive far greater value in the future.

This requires an understanding of corporate culture, and corporate values, and how to communicate them so that executives communicate them through their words and—infinitely more important—their deeds; employees believe in them and live them; and external stakeholders understand them and believe that they are authentic.

5. Becoming real brand journalists

The public relations industry has always recruited former journalists. But historically, it has demanded that they stop acting like journalists. Their perceived value was their ability to craft stories that their former colleagues would find interesting or appealing.

But that approach ignored their true value. Real brand journalism is not just about telling good stories, it’s about identifying and researching and developing those stories.

By hiring people who think and act like journalists, and encouraging clients to allow these “brand journalists” full access, PR firms can provide tremendous value. A PR person who looks at a client from a true journalistic perspective should be able to unearth both positive news (authentic stories that reinforce the messages a company wants to communicate about itself) and not-so-positive news (helping clients identify areas of reputation risk).

6. Being truly channel neutral

The ideal of channel neutrality has been on the communications industry agenda for decades. It has (at least theoretically) been at the heart of several approaches to integration—“orchestration,” “the whole egg,” and more. But it has proven incredibly difficult to realize, perhaps because the wrong people have been driving the process.

True channel neutrality is difficult for advertising agencies, because the financial rewards of persuading a client to invest in one channel—paid advertising—provide an almost irresistible attraction. Given the choice between telling the client he or she needs a billion dollar ad campaign or a $100,000 PR initiative, most ad firms have found ways to convince themselves—and their clients—that the ad campaign is the best solution.

(The new generation of digital firms has a slightly different challenge: by focusing on and recruiting for a single channel of communication, they lack the expertise to be channel agnostic.)

But PR is not a channel, or a medium, or a vehicle; it’s a process. There is no reason why PR people should not be just as comfortable suggesting a flashmob as they are recommending a press conference; a mobile app rather than a media release; or even an ad campaign rather than a publicity program.

No reason, that is, except that they lack the talent in-house. If a PR firm is staffed entirely with media relations experts, it is going to find channel neutrality just as challenging as any ad agency or digital specialist.

7. Eliminating internal barriers

As public relations firms evolved, they traditionally broke their businesses down in a number of different ways: by the intended audience (practice areas such as consumer and corporate, public affairs and investor relations); by industry section (healthcare, technology, financial services); and—in the case of the largest firms—by geography.

This made agencies more manageable—and created opportunities for senior staff—but it also erected barriers between the various business units, often creating obstacles to assembling the best people from multiple practices, sectors and geographies. Those barriers have become more problematic as communications challenges have become more complex. And ironically, there are more of those barriers at the largest agencies, which are often called upon the handle the most complex, global issues.

Agencies need to ask themselves whether these vestigial structures still make sense. Is the “corporate” audience really so distinct from the “consumer” audience? If so, is a CSR campaign corporate (because a major objective in enhanced reputation) or consumer (because done right, CSR can help drive sales)? Wouldn’t your public affairs efforts be better served if they included an employee communications component, motivating ordinary employees to get involved?

And does having a “digital” practice make any more sense than having a “print” practice or a “radio” practice? Or does it perhaps another barrier, one that actually makes it more difficult to come up with channel-neutral solutions?

8. Recruiting differently

There are people working in public relations firms today who are more than capable of doing many, perhaps all, of the things described so far in this article.

There are (contrary to popular perception) PR people who understand and even love hard data; who have studied neuroscience and applied its findings to their work; who counsel their clients’ CEO on his actions as well as his words; who are just as comfortable recommending an ad campaign as a PR program, if it’s the right solution to a client’s problem.

But there are not enough of them, and there won’t be enough of them until PR firms change the way they recruit and target a broader, more diverse range of people, taking a risk on hiring candidates not only from journalism and politics and finance, but from marketing and research and academia and a range of other disciplines that may seem completely unrelated to PR as we currently know it.

9. Creating new career paths

Once those people have been recruited, agencies will need to offer them career paths that don’t necessarily look like the traditional trajectory of a successful PR executive.

For one thing, that traditional trajectory has never served agencies as well as they might think. It has all too often resulted in promoting a great PR person until he or she is gradually shifted away from client work and into the management of a “P&L”—often with the result that the agency loses a great client counselor and gains a mediocre (at best) manager.

Many firms have been experimenting with alternate career paths that keep their best PR people close to their clients, turning them into “client relationship managers” running complex global accounts, but there is still a perception that the top jobs in most agencies—the ones that earn the most money and the most respect—involve managing a practice or an office.

That will need to change, as experts in data analysis, those with a flair for insights and creativity, those comfortable in the C-suite, and those whose expertise involves internal investigative journalism or content creation, demand public relations careers that are as fulfilling and as rewarding as those who are excited by the prospect of managing a P&L—or their own firm.

10. Make it matter

The final challenge, another one the industry has been wrestling with for decades, involves making sure that all of this activity—improved use of data, better insights, application of the latest science, radical restructuring, recruitment and career mapping—pays off in business terms.

Fortunately, there is recent research that provides a map for PR measurement. Fred Reicheld’s “net promoter score” approach has focused primarily on demonstrating that when consumers are more likely to advocate for a brand—by recommending it to their friends and peers—there is a real payoff in terms of future performance. (Similarly, when consumers are actively critical of a brand, there is a measurable negative impact on performance.)

There is no reason why this methodology cannot be applied to other stakeholder groups, and public relations people should start every new campaign by asking, will this increase the number of advocates and reduce the number of detractors for the company, organization, product or service. And they should measure every campaign by figuring out who the ratio of advocates to detractors changed—and making sure management understands how that ratio is relevant to sales, profits and share price.

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