There’s a move by PR agencies and PR consultants in Australia, under the auspices of  a group affiliated to the Public Relations Institute of Australia, to seek payment when they are pitching for new business.

Having spent my career on the PR agency side of fence, I know that PR selection processes is one of the main bugbears of PR agencies. So I appreciate the reasons behind the move by the Registered Consultants Group.

Nonetheless, I think they are embarking on a ‘mission impossible’ in an area that is really ‘wild west country’ in so far as practices, guidelines – and even ethics – are concerned.

The RCG conducted a survey around PR selection practices among its PR agency and PR consultant members during July. They’ve just released headline results this week and they intend to discuss the matter more widely at their national conference in Sydney in November.

PR agencies and consultants are canvassing the concept because they argue that they need to better protect their intellectual property during the PR pitch or selection process. And, of course, they see that their advertising cousins have been getting recompensed in various forms for many years.

This is a big subject, which I will write more about in the months to come, but here’s my feeling about why the PRIA and its PR consultant and agency members, will struggle to make substantive progress.

1. Unlike advertising, which is much more established, there are few accepted principles, guidelines or protocols when it comes to hiring PR consultants and PR agencies.
2. There are too many instances where potential clients blatantly shop for strategies and ideas from competing agencies so they can pick the best. It’s not uncommon for a potential client to decide not to go ahead with an agency appointment after a pitch process.
3. While there’s been an explosion in the use of PR and the number of PR agencies, most of the growth is coming from SME’s whose processes and approaches to hiring are often pretty primitive to say the least.
4. The level of understanding of PR is still pretty elementary in large areas of the market and it’s not easy to differentiate between PR agencies. So the client resorts to wanting ideas, concepts and strategies.
5. There’s a whole bunch of PR agency people out there who will do anything to win business, so if they decide to go that extra mile it forces their competitors into the same situation.
6. Too much of the PR focus these days is on the marketing end of the business, and within this context PR is often seen as a cheap(er) form of marketing.

So in short it’s a largely immature market – on both sides of the fence.

Regrettably many PR Managers, especially in SME’s, have little or no idea as to how a PR agency works and often they don’t know who to turn to for help. And many of the new PR agencies have little or no appreciation of what constitutes sound business practices.

But it’s also a two tier market.

As I’ve mentioned there’s been an explosion at the small end of the market among SME’s looking for marketing solutions and just raw publicity. This is where PR agencies are being increasingly burnt.

On the other hand at the top end of the marketplace – among professional service firms, public companies, government departments and multi-nationals – there’s a bit more circumspection – from both sides.

The RCG and PRIA move is certainly a bold one. As far as I am aware there’s no other international PR peak body that has succeeded in introducing a policy that members must adhere to. Some ‘recommend’ that potential clients should be encouraged to recompense a PR agency for strategy, plans and creative in certain circumstances. And others ‘encourage’ reimbursement of expenses incurred by agencies in pitching.

One development that will bring a degree of order and sanity to the PR pitching business is the intervention of Procurement people and processes and /or the use of outside facilitators to achieve greater transparency. It’s a trend that is gradually taking effect in PR internationally, not surprisingly following in the footsteps of our advertising cousins.

One report I read stated that around 40 percent of all advertising pitches in Australia are now facilitated externally and Vale International, a global advertising consulting company, reported in March 2010 that in 2009 procurement officers took over 77% of the decision relating to advertising agency revenue (although there are though some aspects of this trend that are also of concern which I’ll cover at some later stage).

This whole topic of PR pitches is a topic close to my heart. I’ve written several articles on and around this topic in PR Influences and even on this blog. And acting as an intermediary or facilitator in the pitch process or in the agency-client relationship is a role I set for myself when I embarked on my second career in late 2009.

I wish the PR agencies and consultants luck, but it’s difficult to see an easy solution – for either the buyer or seller of PR services – in the immediate future.

Related posts:

1. Australian PR Managers and agencies put in spotlight by court cases
2. Australian online newsroom survey – food for thought for PR Directors

 A survey about the adoption of online newsrooms by some of Australia’s leading brand companies, released in the last few days by PR agency Burson-Marsteller, should provide food for thought for Australian PR Directors and Managers.

The basic conclusion of the survey is that online newsrooms are poor because they are either not providing a comprehensive enough range of content, or using the latest technology tools to raise the level of functionality of the sites.

It’s a superficially interesting survey and while it purports to survey Australia’s 20 leading brands as defined by Interbrand, it doesn’t actually list what these organisations are (you have to go and search for yourself). 

It also means that because the survey is about brands it misses some of other large organisations whose inclusion in the survey may have added further useful data.

Most importantly (to me) it doesn’t make any of the observations, findings or conclusions specific to the Australian brands/newsrooms it surveyed – apart from nominating Telstra’s as  best practice.  I can’t help but suspect that client sensitivities got in the way.

For these reasons, while I think the survey is useful and interesting, and B&M should be congratulated for doing it, in my view it only deserves a rating of 6/10 when it could have been 9/10.

But to me the real interest is not what information and tools the companies surveyed are using or not using. To me the issue is why?  How come intelligent and online savvy PR Directors and Managers who in the main understand the needs of the media are failing to come up to scratch (in B&M’s view)?

Online newsrooms are not new. Some years ago I did extensive research into them with the intention of launching a local Australian service – which for various reasons I decided not to proceed with.

However I’ve written about them over the years in PR Influences and one article I wrote in 2005 gives some simple advice which is still relevant (although of course the technology has moved a long way since then).

In my view there are three principal issues and challenges that PR Directors and Managers face in getting Online Newsrooms up and running in their organisations:

1. They don’t always have control. PR Directors and Manager’s battle internally over the question of ownership of web based communication and social media.  Even though it’s called an Online Newsroom Marketing often wants to take ownership and control. Regardless, unless there’s cooperation between the two, and agreement on the reasons for having an Online Newsroom, the result can fail to satisfy any of the external audiences.
2. There’s the philosophical argument as to whether an Online Newsroom should be passive or interactive and what elements it should contain. Perspectives vary from it being seen as simply a repository of information – like an electronic media kit – to it as an inter-active tool based around social media principles. Sometimes this is determined corporately as a matter of policy. But some is determined by the vision (or lack of it) coming from the PR Director or Manager.
3. Regardless of all this the issue often comes back to the turf war with the IT Department and/or their external technical providers.  IT Department’s are notoriously uncooperative and often they simply cannot provide the functionality that many in PR and marketing take for granted.

But the biggest problem is that too many efforts to build Online Newsroom’s become production driven and internally focused.  The real challenge is put the tensions and rivalry between PR, marketing and IT to one side and focus on who the end audience is and what they are looking for.

There’s plenty of survey’s around (albeit international) on online newsrooms that provide a real insight into what media want, and don’t want, and what works for them and doesn’t.

This 2009 Online Newsroom Survey from TEKgroup International is a good starting point – along with Burson-Marsteller’s Australian perspective.

Related posts:

1. PR Measurement & Evaluation: US survey raises questions about Australian practice
2. Australian PR agencies seek payment for pitches

For anyone working in corporate PR in Australia the Toyota recall issue deserves study as an example of one of the best “how-not-to-do-it’ in crisis management.

For those newer to the game it will provide some valuable insights into processes and pitfalls in a genuine crisis.

 For PR ‘veterans’ like myself, who have been around the block a few times, it will likely bring back a few memories.

In a crisis there are three key determinants in how successful they are handled:

1) What’s the company’s culture and attitude to disclosure?

This is where Toyota’s problems begin (as do those of so many companies). Tom Gable, a San Deigo PR guy who was part of a international PR group I belonged to many years ago, has a great blog that backgrounds Toyota’s real failings in this area.

Tom, apart from his own insights, provides some telling quotes from a Feb 6 article in the Wall Street Journal, the best of which I think is: “In Japan there is a proverb, ‘If it stinks, put a lid on it”.  Alas, this seems to have been Toyota’s approach to its burgeoning safety crisis”.

Then Ken Makovsky, one of the smartest PR guys I’ve ever worked with, who has managed to grow one of New York’s largest independent PR agencies – and resist being taken over by the voracious ad agency conglomerates – has a nice little commentary piece.

After concluding that all the fundamentals of crisis management communications are being violated, he ends by posing the question – “Is Toyota suffering from a case of ‘historical amnesia’ so profound that the company’s communications efforts have collapsed in exhaustion?”

2) Who’s controlling the communication?

The blog Ishmael’s Corner fromLou Hoffman hits the nail right on the head when he says “I am convinced every crisis reaches a fork in the road in which a company must make a choice on who’s leading the charge, legal or common sense”.

He then does a great job of analysing three Open Letter’s in the US from Toyota (its best to go back and start from his first one) showing how they seem to have moved from a legal to a communication approach. For those who have been through these exercises it will likely bring back memories!

3) Who’s fronting for the organisation?

This is the nightmare that many in PR, who have the task of being the organisation’s spokesperson, dread.  It’s the ‘job from hell’. In some cases you can feel that you are the sacrificial lamb. You need the ability to turn penetrating media questions from negative to positive, to be fluent and right ‘on message’.

When it comes to Australia, regrettably, I don’t think Glenn Campbell, Toyota’s local spokesperson ( a former client and probably the most sensitive, conscientious PR professional I have worked with) did the job that was needed with TV or radio. He appeared a tad defensive, he got a little tangled in his delivery and his messaging didn’t come out as I am sure he had hoped. Probably a 7/10 – but when a 10/10 was needed!

However, it would be grossly unfair to shoot the messenger. As I think is clear the basic problem is with the organisation, its culture and apparent attitude and a ‘disconnect’ with the real world (can you believe it was still running TV adverts for the Prius the day Campbell was fronting the media announcing a recall!).

So what’s the take out from all this?

There are many Australian PR Directors and Managers who work for organizations with overseas masters who would privately concede that either because of Toyota-like in-built cultural issues, or simply because there’s a lack of understanding as to how things are done in Australia, their worst nightmare is a crisis or product recall.

In fact my own experience is that it is only five years ago I had to create from the bottom-up a complete crisis management plan, including protocols and processes, for the Australian and New Zealand subsidiary of one of Europe’s largest conglomerates. What we did, and the questions and issues that this exercise created, ended up prompting Head Office to follow ANZ’s lead and start to put an international crisis framework in place!

The bottom line is that the Toyota episode, which clearly still has some twists and turns left in it, should provide the motivation to review or audit just how prepared you are to face a crisis – and most importantly, if you have overseas masters, what processes and protocols exist between you and they.

PS.  You might be interested in, or get some value from, two articles I have previously written in ‘PR Influences’.

1)  Media Relations: What type of spokesperson works best?

2) Media Relations: How well prepared are your management to talk to the media?

No related posts.

Reputation. Conversation. Influencers. Psychographics. These are my four picks as the areas for someone running an Internal PR Department to focus on during 2010. Do so and I  think it may help you bring a sense of purpose to your Australian PR/communications efforts.

Reputation (v image)

Say what you like but after what we’ve been through in 2009 reputation is king. Many industries, and a number of individual organisations, face a big job in this area.

PR is about reputation.  Reputation is earned.  It’s achieved largely by what you do – not what you say, or necessarily how you present. It’s a belief that is held by people who have dealt with, or been influenced by, the organisation –usually over a sustained period. It’s normally a ‘slow burner’. A reputation is built on substance. It’s strategic and for the long-term.
Image is created or built – usually quite artificially. It is usually conveyed through paid media and other activities. Image will change, often quite quickly, to take advantage of market trends. Creating an image is often a prelude to building a reputation – especially for a younger organisation or brand.  But it’s largely tactical – therefore short-term.

Conversation (v attention)

Technology has given us the unparalleled opportunity to communicate one-to-one with our customers, shareholders or the community. But the key to this is having a genuine conversation. The way some are going we are in danger of ‘stuffing-up’ this opportunity.

PR is about building relationships, which is created through two-way communication – having a conversation. A conversation is both participatory, and inclusive. PR has always had a conversation with the media – although sometimes a little fractious. Social media is the ultimate medium for conversations – which is why ‘real’ social media communication should be in the hands of the PR people.

Advertising is about gaining attention – some call it an industry built on finding the most creative ways to interrupt, but doing so in way that gains attention.  They bring this same approach to social media – they want to come up with pop-ups ads, create buzz and generally clever ads that consumers will see direct, rather than through paid media.

Influencers (v consumers)

Sure it’s great to be able to talk direct to consumers. But the old adage that 10% influence the other 90% is still largely valid.

As I’ve said above the advertising folks are in danger of gaining the upper hand in the social media area – and might well do irreparable damage if the marketers don’t show enough smarts to reel them in (and I’m doubtful – based on history – that they do!).

But the importance of PR’s role with the influencers – be they well-followed media, influential bloggers, investment analysts or nutritionists – should not be over-looked. It’s very much part of building the reputation platform!

Psychographics (v demographics)

Marketing people continue to put most of their effort into ‘interruption marketing’ to buy space in media that will enable them to reach consumers based on demographics ie age, sex, income.

But if PR is in the mix then look to communicate based on psychographics – identifying and reaching audiences according to their values, interests or lifestyles. It’s about communicating on the basis of common and shared interests – the groups people belong to and common interests they share. So if reaching the consumer is part of your brief for 2010, then bring some freshness to the table by looking at it from this perspective.

These are my thoughts. But I don’t have a mortgage on thoughts.   Feel free to comment or disagree.

Related posts:

1. New tool gives reason for PR Manager’s to revisit corporate reputation management
2. Rudd’s demise; the implications for Australian corporate PR and communications
3. Why professional services’ PR and communication is different

News that LG Electronics Australia has shifted from one multi-national PR agency to another as part of an international re-alignment, apparently without a pitch from either of the agencies involved, or indeed any other local Australian PR agency, is a further signal as to how much PR in Australia is becoming driven by international factors.

Moves of this nature, as a consequence of ‘global decisions’, are not unusual in advertising. But this is a reminder as to how much PR is following in the advertising slipstream.

I’ve seen this move towards internationalism at first hand. During my last 10 years in the ‘agency world’ my agency was an independent that was able to ‘act local’ for several multi-national clients. But as the Australian associate of an Omnicom agency we were also at times the grateful recipient of international business that we won by overnight email, out-of-the-blue from New York or London.

Both worked – depending on the client.  But PR is not like advertising. Advertising is still about buying platforms and delivering consistent messages. PR, on the other hand is about developing relationships.

The former can be orchestrated from anywhere – and the buyer can be changed without too much disruption. The later need connected people on the ground, who are able to build and sustain long-term relationships. In the old adage’ think global, act local’ advertising is the former while PR is the later.

Most Australian PR Manager’s of multinationals that I’ve met have been sceptical, suspicious or resentful of the increasing multinational approach to PR. 

From my experience issues that arise to irk PR Managers include.

1. Relevancy.  What works in other countries is often not appropriate for Australia – and it can take a hell of a fight to be the exception. 
2. Budgets.  Local budgets are often not adequate to tackle the tasks that Head Office is implementing and wants its Australian operation to duplicate.
3. Endorsement. Local internal management can often have more of a sales perspective which can leave the PR people bereft of local endorsement.
4. Process.  Marching to the international drumbeat can result in a large proportion of scarce internal and local agency resources being chewed up in liaison and reporting with little left to actual implement the PR work!
5. Media. Trying to duplicate American and Asian media initiatives can be fraught with risk given Australian media that can be fiercely critical and frank at times.

There’s no point in shooting the messenger – the multinational PR agencies. Instead PR Manager’s need to be stronger and more proactive in protecting their patch and fighting for their independence (providing that they commit to following international policy and messaging).

One way is to bring more process and transparency into the PR agency selection process.

Too many Australian PR agency appointments are still made without a rigorous process. Multinationals would likely be less inclined to make arbitrary decisions in favour of multinational agencies if they knew that equal or superior local Australian PR agency talent was available – and their local PR Managers or Marketing Managers insisted on having a genuine competitive process.

LG has had its share of issues to handle in Australia and there have been some rumours that it hasn’t been the easiest client to work for. Nonetheless the agency on the way out -Burson-Marsteller -has done some major high profile work for LG and its likely that neither LG Electronics and  Burson-Marsteller locally are too happy with having the rug pulled out from under their feet.

The only one smiling will be those in WPP because the irony is that both the present and new PR agencies (part of Ogilvy) are owned by WPP. So it doesn’t matter one iota to them.

Welcome to the new world of international PR.

Related posts:

1. Australian PR agencies seek payment for pitches