What are clients budgeting for now, after a year of tight times and cut backs?
What do the nation's top public brands and businesses expect now from their
agency partners? Where are the bright spots coming out of last year's economic
gloom—in which service areas do clients see growth and an increased need for
in 2010?
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Dan Orsborn
CEO
The Orsborn Partners |
According to Dan Orsborn at The
Orsborn Partners, a consultancy that helps companies work with firms,
clients are focused on five hot buttons coming out of the recession: digital
PR, better measurement and accountability, online and offline community engagement,
project-based fee structures and, correspondingly, increased value per PR
dollar spent.
"Top global firms are investing in social media—so it certainly is time to
staff up and invest there," he explains. "You can't just say you have the capability.
Instead, you must show measurement and successes pegged to real case studies
where you've made a difference to client bottom lines. Related to that is the
idea of PR and marketing as a ‘conversation'—clients want firms to bring them
research about their consumer communities and how you plan on influencing them."
On a different note, "New business is picking up this time of year for PR
firms—but more of it is project oriented. Clients are less interested in the
AOR discussion right now. Similarly," says Orsborn, "Fees are 10% to 20% less
than in the recent past. CMOs, CCOs and VPs of PR are looking for more bang
for their buck."
To confirm Orsborn's take, we checked with some of those C-level communications
execs at several of the nation's top companies across a range of industries,
from office supplies to tech and even financial services. Here's what they
had to say about your best (and worst) bets for business in 2010:
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Karen Kahn
Vice President,
Worldwide PR
Sun Microsystems |
Karen Kahn, Vice President, Worldwide PR,
Sun Microsystems
Lower spends likely to continue. Our customers care about
technology, innovation and investment protection. We have aligned our programs
to be laser focused on driving specific revenue initiatives and creating market
awareness for new and growing areas of business opportunities (for Sun this
includes Open Storage and networking technologies). The recession has caused
us to rethink how we allocate our budget, priorities and agency partners. There
has been a great deal of value in doing this. Turns out, we can be pretty effective
with a lower spend.
PR focused on the last mile of marketing to take precedence.
We want and expect our agency partners to understand the drivers of our business,
our value propositions and what enables the best possible sales environment.
Traditional communication is being replaces by "community" communication and
agencies need to understand how to help companies grow their circles of influence.
I no longer expect our agency partners to do PR—this is a given. The agencies
that distinguish themselves are the ones who drive programs that influence
the last mile of marketing and communication: true business outcomes. I also
expect our partners to always be innovating, experimenting and growing. I would
rather risk a failure (preferably a mild one), than risk dull communications
that just adds noise to the market.
Service needs to include increased integration of employee and external
communications, interactive social marketing. I see a continued alignment
of employee communications with corporate communications. I believe agencies
that can move towards offering programs that build communities will see interesting
growth. Employees after all are the most important asset of any company and
yet so often there is a disconnect between internal and external functions.
I also see continued growth in social marketing and interactive programs. As
for my company, the focus and primary investment is in technology and innovation
programming and deep customer communications.
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Paul Capelli
Vice President,
Public Relations
Staples |
Paul Capelli, Vice President, Public Relations,
Staples
Retailers are looking for innovative ways to communicate
with audiences. New and creative thinking tops the list when it
comes to working with our agency partners. Having an outside perspective
on the kind of natural news windows that may be opening and creatively thinking
about how Staples can best communicate with the audiences that are important
to us is an evolving and challenging process. It's one where we really value
our agencies to continually help us look at things in different ways so we
can be as impactful with our communications as possible.
Marketing and messaging should continue to emphasize value, price
and promotions. As a retailer, there has certainly been a shift
toward communicating value [in light of the recession]. Our marketing themes
are heavily emphasizing price and promotions. This makes the opportunity
to integrate our public relations programs with marketing a bit more challenging,
so helping us strike a balance while driving our brand forward is something
we are spending considerable time on. From a corporate perspective, we are
focused on communicating Staples performance by a new set of standards in
terms of what success is in the current business climate.
Hot buttons continue to be results tied to business goals and adding
value. In terms of advice for working with your clients in today's
economy, I think that many of the core things that an agency partner can
do to add value becomes even more important in a tough business environment.
Be nimble; help PR drive our business goals; think ahead and help us
see around corners for both opportunities and potential pitfalls; and generate
great ideas.
There will be increased need for service in CSR, cause marketing
and value campaigns. We will be building on some of the cause marketing
work we have done. It's really engaged our customers and works well
in tandem with our value campaigns. We are also spending time thinking
about how to present our green initiatives, as well as how to best engage
social media into our programs.
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David McCulloch
Director,
Public Relations
Cisco Systems |
David McCulloch, Director,
Public Relations, Cisco Systems
Companies will be critical of complacency coming out of the
downturn. We are starting to see sequential growth quarter to quarter.
This is a perfect time for our agency partners to rejuvenate their relationship
with us. With the turnaround coming, there might be a temptation to breathe
a sigh of relief. That's exactly the wrong approach. You can't express a
hint of complacency or a sense that we're going back to the way things were.
That misses the point that the world has changed.
Utilities, energy, healthcare and public policy expertise
will be at a premium. Beyond that, in the year ahead, we don't expect
banking, insurance and retail to come back strong. But we do expect to see
more strength in utilities, healthcare, public sector and many other surprising
areas like sports and entertainment. It's important for our agency partners
to recognize that the world has changed and that we're looking for skills
that align with the market opportunities in those areas. The upshot for firms
is that vertical insight becomes more important for you now.
Digging deeper into that, we've seen $3 trillion pumped into the economy
from government stimulus. As a result of some of that, we're expecting the
fastest growth rate in IT to come through utilities. The Obama Administration
says that 10% of electricity will be from renewables by 2012. So, we are
seeing a $100 billion opportunity in smart grids—and that all comes down
to how technology like ours can make energy creation, supply and distribution
more cost effective. A year ago, that wasn't even on the radar. But now,
we are seeing an opportunity in energy companies around the world that could
be as big as the Internet itself [in terms of growth] from Cisco's point
of view.
So now, we need PR people who get the utilities and energy industries—as
well as expertise related to government and policy issues. Related to that
is healthcare. There is a lot of activity around reform—and we see IT as
having a major role there. Analysts tell us spending will grow faster in
health and energy than in routine technology. That has direct impact on our
PR and communication and what we are looking for in agency partners. Our
firms need expertise in those areas—and should be staffing up and adding
resources there in order to keep the pace and actually get ahead of us on
those things.
Digital PR and social media will continue current growth trends. On
a different note, everybody recognizes that digital PR and social media are
important now. An offshoot of that is pushing PR functions beyond traditional
models and demonstrating true insight into your clients' customer segments
that can be served and reached through tools like Twitter, Facebook and others.
Agencies need to be creative and aggressive in communicating directly with
those audiences for us. For example, what are small businesses looking for
from their suppliers? We may have looked at Fortune Small Biz magazine
in the past to reach them—but now you can engage directly with thousands
of small businesses and get their opinions and get their opinions of us as
a company. So, in the year ahead as budgets loosen up a bit, we can investigate
how these tools drive deeper relationships.
Budgets likely to be re-allocated versus increased. In
terms of where our budget will be growing, I must say that we cut about $1.5
billion across the business. We just entered a new financial year in August
and aren't planning to increase spending in those areas. Those cost cuts
were permanent. However, we will be allocated more resources to the utilities,
healthcare and public sectors. And, of course, digital PR will get more of
our budget, as well. Those are the substantial investment areas.
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Roger Frizzell
Vice President,
Corporate
Communications and
Advertising
American Airlines |
Roger Frizzell, Vice President, Corporate
Communications and Advertising, American Airlines
Social media innovation and reputation management remain essential. As
our field continues to evolve with the advent of new online and social media,
we are demanding even more from our agency partners. We also need them to help
us stay one step ahead of the curve with any new public trends or attitudes
that could impact our business, while also remaining strongly grounded in traditional
media relations and PR practices. But we also need to make sure our agency
partners continue to provide strong counsel, especially when it comes to image
and reputation, because it is a core value we bring to the table, and it is
essential to be successful in today's corporate business environment.
Marcom integration will become more important as budgets tighten. In
terms of skills and services firms should be focusing on, there is so much
change happening in the news industry, and today's agencies must understand
how to successfully navigate in this ever-changing environment with our
top media. They also must become experts in social media and they need a greater
understanding of the marketing-PR [dynamic] as advertising, marketing and PR
become even more integrated, especially as budgets get further restricted.
Continued economic pressures to push crisis and issues management
to the fore. Unfortunately, there is never a greater need for public
relations than in difficult times like we're currently experiencing with
the economic downturn. It requires a strong background in crisis management
and issues management.
Doing more with less will be a common refrain in 2010. Companies,
like American Airlines, are looking to do more with less budget, so our agencies
are being tasked to help us develop creative alternatives to how we approach
a problem or an opportunity. Finally, it is critical that the agency be able
to help us demonstrate the value in everything we do through measurement and
research.
Clients continue to value agency partners who can stay ahead of
trends and market shifts. We are very fortunate that we have one
of the best agencies in the industry with Weber Shandwick. They work with
us through the up-and-down cycles with our budget, and they bring in a strong
mix of youth and senior talent to the table. I believe they also help us
stay ahead of emerging trends, technology and public perception shifts, and
they help us measure everything we do in the marketplace against a competitive
set of benchmarks.
CSR, green initiatives and employee communications are a priority. In
my view, these areas are becoming even more important to our overall practice,
and we must have a tightly integrated effort that connects each of these functions
together into a single plan. Agencies that are limited in scope will continue
to play an important role, but we look for agency partners with a broader range
of skills and talent to enable us to bring our efforts together under a single
umbrella. Given the current economic downturn and the emergence of new media,
along with the growing importance of corporate social responsibility and employee
collaboration, this has never been more important as it is today.
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Rob Lanesey
Vice President, Corporate
Communications
Intuit |
Rob Lanesey, Vice President, Corporate
Communications, Intuit
Clients increasingly expect strategic social media programs, versus
tactical one-offs. Surprisingly, we've been forward leaning in the
social media space at all levels—from the corporate and business unit levels
to marketing and product launch levels. It's also an important area of focus
for our internal communications. It's a huge part of what we do at Intuit.
As a result, our expectation of agencies is that they're as leading edge
in this as we are—from the skill-set and tactical perspectives to the strategic
and programming perspectives.
Recession and social media have fueled increased integration across
disciplines. In our business units like TurboTax and our Small Business
[unit], we are seeing integrated PR and marketing programs that are built
around social media. Integration is more important than ever before—due in
no small part to the recession and social media working together. We need
more bang for our buck, so companies in general are more interested than
ever before in collaborative work across your marketing and PR teams. That
means we are now asking PR agencies to work with ad agencies and marketing
agencies. That's a new dynamic for many of them. We're very happy with the
way our agencies are responding now.
AORs continue to stand out with big, innovative new ideas. Our
firm (Access Communications) has been coming up with big creative ideas for
us for seven years now. Typically when have that long of a relationship, you
fall into lull. But they've rolled out new creative programs like our "Money
Matters Town Hall Series." There is no resting on laurels with agencies these
days, especially in this economy. I am sure the economy has put an extra kick
in their steps. The best ones are doubling down and putting their best foot
forward.
Social media's gee-whiz gives way to metrics and results. The
gee-whiz factor of social media is gone and our company needs to see real measurement
and results. Groups are rolling out new services and measurement tools, and
some agencies are developing their own. It's necessary to have now. There isn't
a program we launch without a social media element to it, and we want to track
that. For example, we had our investor day with our IR team yesterday and we
were Tweeting from the event. To our pleasant surprise, the media that cover
us were following us instantly. This was our first foray into social media
for financial communications purposes. We created our Twitter account and had
10 people covering us in the first minutes.
Clients increasingly to expect real-time adjustment to PR campaigns. In
today's environment, it's more important than ever to be assessing the effectiveness
of our programs and adjusting them in real time. That's easier said than done—we
need agencies to say, "This isn't working" to keep up with the pace of change
due to the economy and our need to get the most for every dollar we spend.
So, it's increasingly important for firms to be able to make the big calls
in the moment and to adjust in real time.
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Paul Hartwick
Senior Vice President,
Communication and
Public Affairs
Chase Card Services |
Paul Hartwick, Senior Vice President,
Communication and Public Affairs, Chase
Card Services
Tough times aren't over and budgets will continue to remain tight. In
the current economic environment—and even as we see signs that we're emerging
from it—budgets and staffs are smaller and tighter than ever. Therefore, what
we need from our firms (we work with both Ketchum and Edelman) right now is
practicality, humility/teamwork and innovation.
Practicality remains a premium. Consumers are skeptical
of big-dollar, super-spun PR and marketing campaigns. To get people's attention,
we have to be clear, simple and straightforward. The big idea right now shouldn't
come with a lot of dollars attached to it.
Humility/teamwork go a long way in tough times. Staffs
are small, so PR departments are linking arms with advertising departments
and marketing communication functions. In some cases these days, there's great
overlap across those disciplines. Firms should be able to work well with others—ad
agencies, digital firms and even other PR firms. There's no room for big egos
trying to get credit. It's all about the success of the team.
Innovation still rules. Creativity is still king in our
business. We need PR firms to generate lots of smart ideas—new or recycled—to
help us break through a noisy and often cluttered environment.
By Brian Pittman (bpittman@bulldogreporter.com) |
