Search results for: “pr agencies”

PR trends and Edelman’s recent results
David Brain has written a good PR trends piece over at his blog on Edelman’s recent results. In particular, David focuses on the PR industry’s reaction to those results (some find it amusing to see the class swot get a B-grade). There is a temporary amnesia of other agency group problems. Go and have a read of David’s piece here.

PR Week ran a piece asking if Edelman’s problems were down to the agency focus on creative talent? This quote from Fleishman Hillard’s Jim Donaldson digs into some of the perceived challenges:

“We have a slightly different approach based in part on the fact I’m not aware of a huge amount of success coming from bringing traditional ad creatives into PR agencies,” Donaldson (below, with deputy CEO Ali Gee) tells PRWeek. “That doesn’t mean this particular hire [Judy John] won’t work; maybe they’ll crack the formula. But it’s not necessarily the way we’re looking to pursue it.”

“Partly it’s a financial thing. They can be enormously expensive. But also we haven’t seen it work elsewhere, so we look for a different sort of person that approaches things from a slightly different way.”

Fleishman’s approach is to drive creativity throughout all parts of the agency from the bottom up, rather than bringing in crack teams of creatives.
PR Week – Edelman’s ‘earned creative’ is noble, but does it work?

Now you’re all caught up here’s my thoughts on David’s piece:
- Richard’s approach isn’t right for every PR business; but that that doesn’t dispute the validity of his approach at Edelman. I still speak with corporate agencies who are still trying to ‘work out digital’. And these are successful businesses; who have had good growth and peer respect. We have PR agencies at all stages on the adoption curve . Secondly, if you are in a large marketing combine, there is a strong incentive to either integrate a la Ogilvy or hand it across the silos
There are reasons why Fleishman Hillard et al are more conservative in there approach. PR Week covered some of the reasons. Some of the industry commentary in PR Week I viewed with a certain amount of skepticism. Here are some others to consider:
- Having brought both digital and ‘ad agency style’ strategy to PR agencies, I know that can be hard to implement and make it stick. It’s even harder to bring it to management teams who don’t really want it. The C-suite of a global agency say one thing, but getting to regional and country level is very different. It’s a miracle we have any pioneer thinking in the PR sector at all. As an owner-manager Richard has more power than most
- The wrong lessons were learned from the digitisation of political campaigning during the Obama elections. Some agencies thought they could replicate it as they were political wonks and roll into consumer marketing. They messed up and are now gun shy in creative and digital. I was in meetings watching agency execs talk on the benefits of democracy and political campaigning. This was in China. It was after the 2008 crisis diminished the western system’s legitimacy in the eyes of Chinese people. There are some specialists like Blue State Digital who have been much smarter
Richard is probably having a diminished reward for his change at a time when marketing functions are changing dramatically:
- Inhoused advertising and creative teams are now doing major strategy work. In addition to the original rapid response, tactical content. Organisations like Oliver are providing the flexibility of agenciey style staffing to inhousing operations. So brands get the best of both worlds. Its part of the uberisation of services. Oliver does run the risk of disruption by the likes of Adecco or Manpower
- Vendors such as Adobe have stripped out some of the pockets of agency value pricing out of digital build and measurement work. Once configured automated marketer friendly reports are a lot easier and automatically distributed. You can put up local / brand specific websites much faster than legacy systems in use like Vignette / Open Text. (I don’t mean to pick on Open Text, but they are an iconic player). Having gone through the painful process being the client on the build of a global web template, I can appreciate the gains made. The template is then rolled out to local country websites via the company-wide CMS. You could have teams doing this process across tens of brands at a time around the world
- There is a changing media agenda to a more media neutral media approach is healthier for brands than digital at all costs. Anything that promotes more critical thinking around paid and earned digital is good for the industry in the longer term. It is important to remember that thought leaders like disruption commentary has an implicit agenda. McKinsey and Deloitte look to have a series of ongoing projects in a client, rather than solving a problem. The digital disruption meme has meant that businesses have taken their eye off long term brand value. Until recently, the digital disruption meme prevented critical evalution of channels. This has changed. But with CMOs staying in their roles for short tenures, brand building may not be secure in its place on the agenda
February 25, 2019
The biggest Public Relations agencies; stuckness and market dynamics
The Holmes Report came out with their top 250 (biggest) PR agencies around the world in terms of billings. I decided to delve into the numbers for financial years 2014 – 2017.

Macro picture

What the numbers suggested at a macro level were three things:
- - Overall billings growth was declining year on year
  - The amount of agencies that were appointed into the top 250 (and were dropped) declined year on year. There is less market disruption
- - The bottom 190 agencies (by size over successive years) accounted for less than half the billings of the top 25 for financial year 2017
This supports a hypothesis of slowing market growth and solidifying market dynamics at a macro level. Strategic acquisitions start to make less sense compared to improving efficiences and effectiveness. But if you were going to buy an agency MC Group in Germany looked to be the stand out choice in terms of changing the fortunes of a large agency billings

We’re also seeing a likely tyranny of large numbers kicking in for the biggest agencies. Mid-sized agencies can be more agile due to less layers of management and less complex environmetns to worry about. They may be multi-market; but they’re not truly global. Which makes strategy and planning much easier.

PR agencies are people businesses. At the core they sell manpower by the hour. Bigger agencies have more people, which means a greater management overhead, not unlike Fred Brooks’ The Mythical Man-Month essays on software engineering. There are more processes, which have built up over time and greater inertia to change. Then you get office and intra-office real politik. You can try and keep this down, but it is a function of scale; the battle against it becomes ever harder and you can only focus on its worst excesses. It tends not to surface when its impact only goes downwards in the management structure.

Agency-specific hypothesis

This next part was inspired by David Brain’s post on the performance of large agencies.

PR seems to be acquired in a more tactical manner than previously. This has been happening for a number of reasons.

A decline in Full Metal Jacket syndrome in comms planning. This nonsensical quote about Vietnamese people in Full Metal Jacket makes similar false assumptions. I’ve seen similar false assumptions in past global comms campaign planning that I have seen. Usually that meant creating something in the US and then expecting it to work on a fraction of the budget elsewhere. This means that there is less international work for agency networks. This has a negative impact on inter-office best practice transfer and building relationships.

The influence of Byron Sharp. For many consumer marketers, How Brands Grow – based on years of marketing science research is the bible. When you look at Sharp’s work there are a couple of clear points when you use public relations as a tactic.

Zero-based budgeting (ZBB) has changed the marketing planning game. It pits public relations campaign efficiency and effectiveness versus other disciplines in sharp focus. In addition, some organisations have mistaken ZBB as a one-way ratchet tightening marketing spend. ZBB isn’t about continual cost-cutting, but continual optimisation – something that seems to have been lost in translation.

PR agencies haven’t taken full advantage of the opportunity afforded by digital and social for a number of reasons:
- There is a tension. Between the focus on financial efficiency and effectiveness that the macro numbers suggest versus the investment in tools and personnel required. Where are the studios, strategists, planners and media desks?
- There has been an expertise drain across the industry as agencies deskill; paying new people into roles less than the person who previously filled it. This means that over time there is a trench in expertise between office leaders and the rest of the team, making it harder for the office to scale and a loss of institutional knowledge. This has led to a lack of diversity in thinking amongst many PRs; let alone gender, race and age diversity. From experience I’ve found that digital natives aren’t necessarily the best digital strategists
- Clients haven’t embraced the change. Social in particular sits elsewhere amongst the marketing team. There is a similar division with paid media. The focus (particularly in Europe) on performance marketing over brand marketing hasn’t helped. Hubspot-style content marketing is a reductive process that isn’t the friend of PR agencies; despite their expertise in content
- The window of opportunity closes as organic reach declines. Social media marketing effectiveness requires paid media budget. Agencies have jumped in too late with insufficient confidence. Traditional senior management agency PRs have been curiously hung up on this. Yet we see: corporate communications as adverts in the FT and WSJ and consumer PRs do paid advertorials and paid product placement
More information
David Brain’s post: Why Are The Biggest Global PR Agencies Stuck? Does It Matter?
Holmes Report
And more related content here.
May 28, 2018
GDPR resources
Partly due to Cambridge Analytica, General Data Protection Regulation (GDPR) is going to have a more profound impact on data usage globally. GDPR would have been seen as an extra-legal reach, but Facebook is making it look like a good idea.

I thought I would pull together a few resources that I thought would be of interest around GDPR since there is a lot of snake oil being sold as consultancy around it at the moment. I am not going to pretend that I am an expert, so I thought it would be useful to share some of the GDPR related resources that I have been looking to learn from.

Not only in terms of what the regulation is, but what techniques can be deplored to act in the spirit as well as the letter of regulations. Demonstrating a basic respect for the consumer won’t harm any brand, but might point to badly designed KPIs that direct and digital marketers might be measured from.

Andreessen Horowitz put together a good podcast on it.

Privacy by Design – The 7 Foundational Principles by Ann Cavoukian, Ph.D. (PDF) – is a must read paper for creative agencies and product teams. It is based on work that was started in the late 1990s. Cavoukian lists a site as a reference ‘privacybydesign.ca’ – but that seems to be down.
1. Start by thinking about privacy by design from the start or as Cavoukian says preventative rather than remedial, proactive rather than reactive
2. Privacy as the default setting
3. Privacy embedded into the design of systems and processes (which sounds like a reinforcement of her first point
4. Not viewing consent in terms of a zero-sum
5. Privacy secured throughout the lifecycle from end to end.
6. Being open and transparent about processes to keep the organisation honest and stakeholders informed
7. Respect for user privacy based on a user-centric ethos
Via James Whatley’s newsletter this article on UX – GDPR: 10 examples of best practice UX for obtaining marketing consent seems to be complementary to Cavoukian’s work. This is in sharp contrast to the dark patterns often used to force consent by many sites.

More related posts here.
April 16, 2018
The advertising industry post (prompted by WPP’s 2017 financial results)
Sometimes the most straightforward posts take the longest to write. When I started on this one last week the big question in the minds of people who watch the big advertising conglomerates is are WPP numbers a company problem or an industry problem?

WPP is looking to simplify its structure with a view to becoming a more agile and transparent business from a client perspective.

Or as it was put in the New York Times

WPP plans to accelerate a programme to simplify the business by aligning digital systems, platforms and capabilities to provide bespoke teams for its clients as opposed to the different agencies that currently compete with each other to win contracts.

Other conglomerates, notably Publicis had already started on this path when it started realigning the group under the ‘Power of One’ vision. WPP is bigger with a fuller offering and wider range of specialisms than many of its peers, no one can be under the illusion about the size of this undertaking.

Let’s talk about the tectonic plates shifting around beneath the feet of ALL the large advertising and marketing combines:
- Interpublic Group (IPG)
- Omnicom
- Havas
- Publicis
- WPP
- Dentsu
The tectonic plates are:
- The Four
- Amazon
- The decline of brand marketing
- The new competition
The Four

The Four is a label that Professor Scott Galloway put on Apple, Amazon, Google and Facebook. All of whom he considered to be monopolists that created value for their shareholders by putting the ‘real world economy through a shredder.

In this case I would swap out Amazon and Apple for Alibaba and Tencent, but the allusion to a quartet of horsemen portending a digital apocalypse is a useful allegory for the advertising and marketing sector. Amazon deserves a section of its own later.

Galloway’s predictions of their destructive power led to an accurate prediction of WPP’s share price tumble this week. (see the video below)

Correlation does not prove causality however — it doesn’t mean that he got the right numbers for the right reasons.

Depending whom you believe Facebook and Google are responsible for 90 percent of online advertising growth outside of China. This represents a massive concentration of media power. It has implications for the creative and planning functions of an agency. Google and Facebook also run much of the advertising technology that purchase are made on. This has decimated much of the advertising technology sector and made it harder to differentiate media planning and buying based on the technology stack.

L2 came up with this research last year based on Google and Facebook revenue targets. If they hit their numbers they would be treating around 14,193 jobs. But it would mean that the corresponding projected number of jobs lost in the advertising industry would be roughly the equivalent of every man and woman around the world employed at vehicle maker Nissan. And that’s just 2017.

L2’s calculations don’t take into account China where the advertising industry has been digitising at a much faster rate than in the west with the bulk of growth going to companies controlled by Tencent or Alibaba.

Given that most of the agencies within WPP and its peers operate on a billable hour model; this represents a considerable potential loss of value. Since the number of people directly equates to revenue.

The consolidation of online media also means that many clients will look to take back control of their media planning and buying process. The argument goes something along the lines of ‘a consolidated media landscape allows for consolidated buying by a global media trading desk due to the inherent simplicity in suppliers. The data comes from the inhouse data management platform and the media vendor (Facebook, Google, Tencent or Alibaba)‘.

The always on creative needed to fuel this process is also being increasing done in inhouse studios, in partnership with their creative agencies as a kind of hybrid model.

This is what Marc Pritchard meant when he talked about taking back control of Procter & Gamble’s marketing as part of a process to save $1.2bn by 2021. In the latest financial results, WPP claimed that their media buying margins had not suffered – only creative had.

Amazon

At the time of written Jeff Bezos is worth about 112 billion dollars, or just under double the annual defence budget of the UK for 2018. Amazon impacts the advertising and marketing industry in multiple ways.

It is starting to become a big player in online advertising in its own right. I think it would be fair to say that this competition to Google is welcome for the marketing conglomerates judging by Sir Martin Sorrell’s commentary on the likes of CNBC.

Amazon has decimated the high street. Toys R Us, Borders Group, Tower Records, Radio Shack, Maplins are just some of the names which have disappeared. It took a good number of years for people to realise that retailers are locked in a zero sum game when Amazon competes against them. Amazon has unique access to exceptionally cheap capital via its shareholders. There have been companies who have beaten it back like Alibaba’s Taobao and TMall in China. But the company has built up a huge amount of retail power and decimated brands that would have been advertising agency clients.

Amazon has become the default search engine for buying things. This has already displaced up to 20 percent of Google searches depending on whom you believe. It also means that they can place imitation goods and private label goods against branded products.

Amazon has got great data. Amazon has data at the centre of its business what consumers like, what they don’t like, what sells well on marketplace resellers. This has driven a number of the product decisions:
- Increasing customer basket sizes
- Expanding into new areas by screwing over marketplace resellers
- Focusing their efforts on private label products which directly impacts branded products across categories. Amazon Basics is the most obvious private label to consumers, but there are many more where the link isn’t so obvious
Depending on your brand category the answer may be:
- Owning your own retail chain like Apple or LVMH’s DFS Group
- Direct sales and subscription services have piqued the interest of FMCG brands like Dollar Shave Club
All of this impacts the advertising sector. For more information on the power of Amazon, I can recommend Scott Galloway’s The Four.

The decline of brand marketing

The relative decline of brand marketing has been driven by a number of factors, some of these factors are good and some aren’t.

Let’s talk about the good reasons first of all.
- ‘Performance marketing’ driving customers directly to a sale has been transformed by the rise of modern online advertising techniques including search advertising and retargeting. Retailers can zero in on intent to a much greater degree than shopping television or direct response print adverts ever could. Google and social media have turned into reputation platforms which then displayed below-the-line spend from the likes of public relations agencies. This was happening at a time when journalist employed by publications have declined; implying a natural progression
- At least some consumers can’t be reached through traditional media channels with sufficient frequency for brand advertising. Social media, online video and banner ads make sense as part of an omnichannel approach
The bad reasons:
- The focus on ROI rather than profits has meant that a balance longer term brand building and shorter term sales has fallen out of kilter. Marketing then becomes a reductive process. To use a farming analogy; its like moving from arable farming with crop rotation to slash and burn. This is particularly noticeable in the way private equity management has affected fast moving consumer brands under its control. Zero-based budgeting is seen as a source of cost cutting rather than ensuring the efficient and effective use of marketing resources
- Digital first strategies – for many marketers this has meant a move from media-neutral, let the communications problem define the channels used to a digital dogma. I make my living with digital media, but I recognise the flexibility required in thinking to deliver an effective strategy
It isn’t about one approach over another but finding balance that works for sales now and in the future.

The new competition

The rise of digital advertising has seen business services expand ways that we couldn’t predict. Advertising agencies like Ogilvy understood the potential for digital early on. Consultancies were focused on systems integration and the use of technologies to change business functions. As they became interconnected internally and externally; the progression into marketing made sense.

A reduction in creative budgets caused marketing agencies to move into areas like service design. Consultancies have looked to inject creativity into their values and skills set by mirroring the kind of acquisition strategy that built the marketing conglomerates.

In the meantime technology companies, notably Adobe have treated marketing like any other business function with a sale conducted at the c-suite level just like Oracle or similar. In many respects this move is understandable as companies use a data management platform (DMP) to derive audience insights and improve their digital marketing. This isn’t vastly different from historic data warehousing and data mining applications.

The enterprise software companies allow large companies to do internally what they have previously asked media agencies to do.

More information

WPP raises spectre of adland stagnation – Breakingviews (paywall)
WPP Vows to Do Better After Weak Results, Nervous Outlook Send Shares Plunging – The New York Times (paywall)
I Cannes – L2 Research
P&G brand chief vows to ‘take back control’ from agencies | FT (paywall)
Sorrell admits creative is hurting more than media as WPP shares plunge | CampaignLive (paywall)
Amazon is threatening Google’s ad space monopoly, Martin Sorrell says | CNBC
March 8, 2018
Global head of PR on Japan + more

Booking.com’s global PR head on Japan, data, and the fallacy of awards | PR Week – For Cafferty, no outside party can understand a business as well as the people who work in it. Indeed, she sees the key attribute of an in-house PR person as knowing every facet, from “fun stuff” like brand and product to tax laws. She sees the value of PR agencies as being strong media contacts and local understanding, and less about strategy or creativity – a very traditional view of PR as media relations and a disconcerting read for agencies given the lack of receptiveness to higher value service aspects. Booking.com’s global PR head on Japan was not exactly insightful comments either. More Japan related content here.

McSuicide? Twitter hoax affects McDonald’s Hong Kong | PR Week – probably because Twitter doesn’t have traction in Hong Kong

What Brands Are Actually Behind Trader Joe’s Snacks? – Eater – it reminds me student jobs that I had in factories making breakfast cereals, frozen cakes and frozen meals respectively – we would change brand boxes on the line but the product remained the same

iOS 10 Quietly Deprecated A Crucial API For VoIP and Communication Apps – Slashdot – what’s not apparent is why Apple is deciding to depreciate this API, especially given the amount of phone use that happens on wi-fi rather than cellular networks

Ships fooled in GPS spoofing attack suggest Russian cyberweapon | New Scientist – what would have seemed like a straight-up Bond villain pot, now seems to be the new normal. GPS spoofing has also been done by the North Koreans and China. They key question is how the GPS network achieves ‘cut through’ whilst being jammed. There is only so much transmitting power that can be put on satellites. It would also mean that ‘old’ skills like astral navigation and map reading are still tremendously important.

August 15, 2017

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