Most Global Companies Don't Want Single Global Agency
Charting the future of public relations
Holmes Report
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Most Global Companies Don't Want Single Global Agency

In the best of all possible worlds, a global brand manager could hire a global public relations agency without having to make any compromises, but in the real world the decision often involves at least a couple of trade-offs.

Paul Holmes

In the best of all possible worlds, a global brand manager could hire a global public relations agency without having to make any compromises, but in the real world the decision often involves at least a couple of trade-offs. The added convenience of working with a single global agency generally means sacrificing quality, and it may also involve aggravating PR managers in other markets who resent having an agency of record imposed on them by headquarters.
 
There is a trend in the market toward greater central control of the communications function, a result of the recognition that in a wired world a company must communicate with a single voice in all its markets. But there is still a belief that companies should “think global, act local,” which means that while strategic direction and key messages are decided at the corporate level, managers of overseas operations still retain a good deal of autonomy when it comes to execution.
 
That’s one reason why relatively few global brands employ a single global public relations firm. In fact, a study of the 40 largest brand-owners (based on a ranking by the Financial Times) conducted by the London office of GCI Group found that only two of 20 respondents use a single agency in all of their markets around the world.
 
According to GCI’s European chairman Adrian Wheeler, “Some companies use a ‘master agency’ at their corporate headquarters which is instrumental in the creation of PR strategy and branding. However, these agencies have no influence over the selection of agencies throughout the world, and are seldom used in any of the company’s other country markets.
 
“Most of the world’s largest companies and leading brands do not have—nor have any desire to have—a policy on the recruitment of PR agencies worldwide. In our study, only two felt the need to bring all of their PR agencies under one roof. The rest have specifically chosen not to, believing that their businesses are too complex and disparate for such a policy to work.”
 
That’s a finding of particular interest as agencies consolidate, citing their belief that companies are looking for global communications solutions. It’s doubly interesting coming in the same week that IBM announced its decision to consolidate its global PR business from more than 50 agencies around the world to just three.
 
But Wheeler says that “unlike the advertising industry—where international agencies are used on a widespread basis—the majority of companies interviewed believe that their local PR teams or product divisions are in the best position to know the intricacies of their individual businesses. As a result, they are given full autonomy to hire the agencies they believe have the knowledge, experience and skill-set required for the specific task.”
 
If local autonomy is a factor, so too is the belief that no global agency can deliver quality in all practice areas and all geographic markets. An agency may be strong in New York and London but weak in Paris or Stockholm or Tokyo or Jakarta. It may have impressive corporate communications and public affairs capabilities, but a less impressive healthcare practice. In such cases, it makes sense for individual country managers to cherry-pick agencies depending on the specific market and the specific task at hand.
 
Among those major companies that eschew the global agency concept: AT&T; Citibank; The Walt Disney Company; Ericsson; Ford; General Electric; Gillette; Intel; Kodak; McDonald’s; Microsoft; Nestle; Nokia; Sony; Toyota.
 
Nestle uses a roster of six advertising agencies for its various brands, but doesn’t place any restrictions on country managers when it comes to PR, says Denise Kennedy, the company’s chief press officer in the U.K. The reason is simple, according to Kennedy: an agency is only as good as its people in the local market.
 
According to Caroline Lee, a corporate press officer at Microsoft, each individual country and product manager gets to select the agency with the most appropriate specialized knowledge. While country PR managers will often seek advice from the U.S., headquarters will never force agencies upon them. That’s why Manning Selvage & Lee, for example, will handle the launch of the Xbox gaming system in Europe, while Edelman handles the U.S. introduction.
 
At GE, meanwhile, there is a preference for “smaller local agencies,” according to Victoria Cardozo, communications manager for Europe, the Middle East, and Africa, who says that when the company does use a global agency, it tends to be in a single market only, because of the firm’s local expertise rather than its international network.
 
Ford may be the most extreme example of a “cherry picker,” using more than 100 agencies around the world according to European corporate communications manager Don Hume. There is a move afoot to develop a list of “globally accepted organizations,” but for now agencies are selected on an ad hoc basis.
 
Gillette, on the other hand, believes that public relations is best handled local “in order to leverage local strength,” according to director of communications Paul Fox, but does use a single global agency to help develop core programming—while often leaving the implementation to local firms.
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