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Nokia’s six-month PR review indicates the challenges that will define the Finnish giant's attempts to rebuild its reputation for innovation.
Arun Sudhaman 26 May 2011 // 10:00PM GMT
Nokia’s six-month exercise to appoint a new PR agency was not for the faint-hearted. Which is probably just as well, because what now faces the company - and winning agency Next Fifteen - is a battle that will make the recent review pale in comparison.
The pitch itself - spanning three countries, countless meetings and typically tough procurement negotiations - offers a few clues as to the challenges that will define Nokia’s new PR strategy, amid the Finnish mobile phone giant's attempts to rebuild a reputation that was once synonymous with innovation.
The early decision to jettison two UK agencies - Good Relations and GolinHarris - amounted to a clear signal of the looming importance of the US to Nokia’s future. The company has dominated market share across emerging markets, but there is a recognition that success in the US is no longer a luxury it can afford to do without.
“Nokia is irrelevant in North America,” says one executive involved in the review. “Having a strong and credible force in Silicon Valley, where views on mobile technology are shaped, was utterly crucial to this pitch.”
Success in emerging markets (or even its home markets) can no longer be taken for granted, as illustrated by the rise of powerhouse brands in China and Taiwan. More importantly, though, Nokia has been badly blindsided by the rapid rise of smartphones and the software systems that power them - whether Apple’s iOS or Google’s Android - products which are critical for success in the highly competitive US marketplace.
“The simple truth is, if all you have is mobile phones, then you’re probably going to be squeezed on your margins because you are selling a lower-profit product,” says a source familiar with Nokia. “There’s also an aspirational element - even if you can’t afford a smartphone, you want the attachment to the brand. You can’t ignore just how important smartphones are.”
Nokia, though, has known this for some time. When GolinHarris won the international mandate in 2008, the company was going through one of its regular restructurings - this time to refocus itself as an internet software and services player. Fast-forward three years and that plan has been dramatically unwound, after new CEO Stephen Elop opted to pull the plug on its Symbian mobile platform in favour of an alliance with Windows Phone 7.
“They were very half-hearted about it last time,” says another source involved in the pitch. “Ironically, I think that was more messaging than real action. That was PR trying to make up for a product strategy. Whereas now, the product strategy is the root of everything - there is a genuine move to change the company.”
Elop’s arrival, punctuated by an unforgettable memo that likened the company’s predicament to “standing on a burning [oil] platform”, is certainly changing the company. One particularly relevant departure is global comms director Arja Suominen, who rose through the company’s ranks with former CEO Olli-Pekka Kallasvuo before leaving the company two months ago for Finnair.
Suominen’s role has yet to be filled, with the pitch ultimately being run by CMO Jerri Devard and interim comms head Carol Soriano. The communications team is now part of the marketing function, with several members - according to highly-placed sources within Nokia - moving to the market innovation unit.
Unsurprisingly, this can be a tricky situation for any agency to navigate. Complicating matters further is Next Fifteen’s decision to offer a group solution comprising Bite, Text 100 and 463 Communications, a relatively unique move for the holding group.
“This is the first time we’ve gone in and pitched and won a piece of business as Next Fifteen,” admits group CEO Tim Dyson. “But in many cases in the last year, we’ve had customers asking if we could put together a Next Fifteen solution. Everybody is looking for something different and something integrated that brings together different skills.”
Rather than fight this trend, Dyson has opted to embrace it, mindful of the experiences of his bigger peers. “WPP and Omnicom have struggled with it because their firms are much larger and that makes it much more difficult to do. We’re very keen to try and go down this path - we feel if we can get it right now while we are still relatively small, it will get easier and easier as we get larger.”
Culturally, the decision will be helped by the similar heritage of Bite and Text 100, both tech agencies that were born in the UK. While 463 will remain focused on crisis communications, the demarcation for the other two, says Dyson, will be based around specific aspects of the overall PR plan. Bite UK MD Kath Pooley will, however, oversee the entire account team.
The Nokia win comes as a fillip for Next Fifteen, following the dispiriting loss of Bite’s biggest US account, AMD, earlier this year. Yet, given the scale of Nokia’s revamp, there is a sense that even its strongest PR efforts will live or die by the success of the Finnish company’s product strategy.
“The braveness of their product strategy has to be matched by the braveness of their marketing and their PR,” says one source involved in the review. “If it’s not, then this thing fails.”
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