Tuesday, September 17, 2013

Rare honour for India’s PR guru

Madan Bahal will receive the SABRE Award for Outstanding Individual Achievement in Shanghai today.

“Over the past 30 years, Madan Bahal has built Adfactors — the firm he founded in 1982 — into India’s largest independent public relations firm and one of the 100 largest in the world (according to the latest Holmes Report 250), an accomplishment that makes him a worthy recipient of our SABRE Award for Outstanding Individual Achievement,” according to The Holmes Report.

Adfactors Public Relations is today India’s largest public relations consultancy by revenue.

This is a proud moment for all those who have been associated with the Adfactors Group and, particularly those who have worked closely with Madan. Cloaking his genius in humbleness and humility at all times, Madan’s mesmerising presence –invariably, on several occasions, mistaken for his absence as he usually remains silent throughout meetings – has been a game-changer for the Adfactors Group as he quietly slips in rare insights on perception change with immense value for corporates.

Equally spell-binding are his long speeches, unleashing rare gems on management, communications, public policy, economy, etc. His weekly Monday meetings with senior colleagues at Adfactors PR and his speech at the consultancy’s annual AGM are worthy of mention.

Madan and his partner Rajesh Chaturvedi, another epitome of humility and humbleness, have been leading several path-breaking PR campaigns in India. Here is wishing them all the luck in scaling greater peaks of PR excellence.

Tuesday, April 02, 2013

Adfactors PR closes FY13 with a string of strategic wins

Adfactors PR, considered India’s largest PR agency, closed FY13 with a string of strategic wins from diverse sectors such as telecom & IT, energy, infrastructure, healthcare, travel & hospitality, automobiles, consulting and financial services, according to a press release available on the Company’s website.

The firm won over 15 strategic accounts including Bank of America, Bristol-Myers Squibb, Cairn India, Citibank, Essar Oil, GIFT City, Goa Tourism, Gujarat Gas, iGate, Lamborghini India, Merrill Lynch, PricewaterhouseCoopers India,  Rail Europe, S&P Dow Jones Indices,  UAE Exchange, Yamaha Motors and Vodafone India,.

Adfactors PR also supported some of the largest transactions in the capital markets last financial year including the initial public offerings of Bharti Infratel, CARE and PC Jeweller, the open offer of GlaxoSmithKline, and the rights offer of Network 18 Media. It also managed several other strategic projects in Public Affairs and Crisis 24x7 practices.

“Last year was a significant milestone in diversifying our practice and sectoral portfolio,” said Madan Bahal, Managing Director, Adfactors PR. “From a largely corporate and financial communications firm, Adfactors PR evolved into a multi-specialty firm. We now have market leading practices in six key sectors.”

These wins have enabled Adfactors PR to register a 20 per cent growth year-on-year in an otherwise challenging economic environment, according to the press release.

“This is a reflection of the growing confidence of large Indian and multi-national corporations in the firm’s ability to conceptualize and execute PR campaigns that deliver a strategic advantage in the marketplace,” said Bahal.

In FY14, the firm plans to strengthen new practice areas like Consumer, Public Affairs and Corporate Social Responsibility.

Adfactors PR serves over 260 retained clients and has an employee strength of 320 consultants.


 

Wednesday, February 20, 2013

Mega CSR opportunity: Are PR agencies ready?

Eminent lyricist-script-writer Javed Akhtar had presented the right perspective in which Corporate Social Responsibility (CSR) should be viewed as fatigue often sets with philanthropy. He was speaking at a recent CNBC-TV18 awards function.

“Do you know what percentage of Indian population had watched Aamir Khan’s hit film 3 Idiots?” he had asked the audience, answering the question himself. “Only 2 per cent of the Indian population. Yet the film was the biggest hit grossing Rs 200 crore. Imagine what the revenue would have been if a higher percentage of the population had watched the film?”

Akhtar had implied that the CSR should be considered an investment, not cost. CSR would eventually bring in profits for corporates as inclusive programmes tend to grow the market.

Such a realization has been sweeping across the US which, decades back, had witnessed radical anti-CSR views. "The social responsibility of business is to increase its profits," wrote Milton Friedman, economist and Nobel laureate, in his article in The New York Times Magazinein 1970. He had considered CSR a "hypocritical window-dressing", and had seen "a suicidal impulse" in business leaders who had pursued such programmes. Four decades later today, the US has come a full circle with CSR budgets increasing and concepts like cause marketing gaining increasing acceptance.

Maybe Akhtar’s thoughts on inclusive growth should set the agenda as to how the mandatory CSR budgets should be spent in India, as and when they are available in the near future, thanks to a new law. As it is well known, the new Companies Bill, passed by the Lok Sabha in December 2012 and which is likely to be tabled in the Rajya Sabha in the Budget Session beginning on February 21, 2013, makes it mandatory for companies to spend 2 per cent of their net profit on CSR. Perhaps India is the first country in the world to make CSR mandatory.

According to clause 135 of the Bill, “Every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year shall make every endeavour to ensure that the company spends, in every financial year, at least two % of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility (CSR) Policy.”

“A Business Standard analysis of balance sheets of BSE 500 companies showed that some 457 companies will have to make provisions for spending,” according to a report by Sundaresha Subramanian and Sameer Mulgaonkar in Business Standard. “Based on the average profits of the preceding three financial years, these firms will have to spend a whopping Rs 6,751 crore in the first year after the Act comes into force. Over half of this amount has to be spent by the top 30 firms alone. Fifteen of these firms will have to allocate spends of at least Rs 100 crore. State-owned explorer ONGC has to allocate Rs 405 crore, while Reliance Industries has to spend Rs 377 crore, followed by State Bank of India (Rs 194.25 crore), NTPC (Rs 180.36 crore) and TCS (Rs 161.1 crore).” According to the media report, Business Standard Research Bureau arrived at these numbers based on the average net profit of these firms for the financial years 2009-10, 2010-11 and 2011-12 on a stand-alone basis.

The Bill specifies activities which may be covered under a company’s CSR programme. These include: (i) eradicating extreme hunger and poverty; (ii) promotion of education; (iii) promoting gender equality and empowering women; (iv) reducing child mortality and improving maternal health; (v) combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases; (vi) ensuring environmental sustainability; (vii) employment enhancing vocational skills; (viii) social business projects; and (ix) contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women.

Sachin Pilot, Union Minister for Corporate Affairs, has told the corporate world that he was open to the idea of corporate houses being incentivised by means of suitable tax provisions.

However, the corporate world would require a lot of assistance in scaling up their CSR activities. Business Standard had quoted a senior official of Indian Institute of Corporate Affairs in the above-mentioned report as saying, “At present the corporate sector is spending about 0.2% of their profits on CSR activities, even substantial portion of these spends may not fit in to the specific sphere of activities that are prescribed in the Bill.”

According to the World Bank’s May 2012 Newsletter,a symposium had been organized to launch a long-term engagement among the Government of India, the World Bank and Harvard Business School to spread the message of CSR across Indian industry.

Speaking at the symposium, Praful Patel, Union Minister for Heavy Industries, said that the public and private sectors needed to pool their resources and undertake larger projects to make a visible impact on the community they are working with. Ashok Kumar Pavadia, Joint Secretary, Public Sector Enterprises, Government of India, hoped “our partnership with the World Bank and HBS will help us share knowledge and learn from what's happening in the field of CSR".

Prof V Kasturi Rangan, the Malcolm P. McNair Professor of Marketing, Harvard Business School, told the symposium, "We can take good CSR models that are working in the country today and create a forum where they can be shared. Between HBS and the World Bank, we can create best practices, share through education forums, and probe in a much deeper way. This cross-pollination will work very well under a partnership of HBS and the Bank," he had suggested.

Bhaskar Chatterjee, Director General, Indian Institute of Corporate Affairs, felt that failure too should be looked at. "If people spoke of those failures, we'd learn far more," he had said.

Anu Agha, Chairperson, Thermax Limited, had raised a pertinent question at the symposium, "The past two decades has seen great economic growth, but India is among the three countries where the hunger index has gone up... Today public and private sectors may be working on the same issues, but separately. How can we converge and partner?"

Tata Group veteran Kishor Chaukar, who is presently Chairman, Tata Teleservices (Maharashtra) Limited, had urged companies to make CSR a strategic business exercise rather than mere philanthropy. "We need to stay there for the long run and can't be fly-by-night operators," he had said.

In her article,
Why CSR's Future Matters to Your Company, in Harvard Business Review, Susan McPherson, Senior Vice President, Fenton, a London-based global network focusing on issue campaigns, had stated, “More and more companies are building long-term commitments to Corporate Social Responsibility.”

McPherson felt that the rise in consumer activism and mobility, the Occupy movement, 24-hour accountability (thanks to social media), and global resource depletion will force every enterprise, large and small, to make CSR a focal point. Four particular areas stand out among many, according to her. They are:

Employee engagement: According to Gallup, 86% of engaged employees say they very often feel happy at work, compared to 11% of the disengaged. Engaged organizations also grew profits as much as three times faster than their competitors. The Corporate Leadership Council reports that highly engaged organizations have the potential to reduce staff turnover by 87% and improve performance by 20%.

Cause marketing: According to a PRWeek/ Barkely PR Cause Survey in 2010, two-thirds of brands now engage in cause marketing, up from 58% in 2009. The same survey found that 97% of marketing executives believe this to be a valid business strategy.

The sceptical consumer: As social media platforms continue to grow beyond their pre-teen years, consumers will demand more transparency from corporations and non-profits.

Board-level involvement: In 2011, The National Association of Corporate Directors Public Company Governance Survey asked about the highest priorities for the Board. The highest priority at 72% was strategic planning and oversight and amongst the lowest was CSR at 2%.

In an article, ‘From Fringe to Mainstream: Companies Integrate CSR Initiatives into Everyday Business’, Knowledge@Wharton had stated, “Ten years ago, for instance, only about a dozen Fortune 500 companies issued a CSR or sustainability report. Now the majority does. More than 8,000 businesses around the world have signed the UN Global Compact pledging to show good global citizenship in the areas of human rights, labour standards and environmental protection.”

The Wharton article had also stated, “Today, amid a lingering recession that has dented corporate profits and intensified pressure from shareholders, companies are devising new CSR models. Rather than staffing a modest CSR department -- and slapping it on the org chart as a small offshoot of the public relations (PR) or philanthropy division -- many companies are instead trying to embed CSR into their operations. Some blue-chip companies, such as Visa, are creating new markets in the developing world by closely aligning social causes with their overarching corporate strategies.”

Jerry Wind, the Lauder Professor and Professor of Marketing, Wharton School, had said CSR is "socially responsible capitalism.... At the company level, the business objectives need to be to both maximize shareholder value in the long term and to address society's biggest problems. This requires having any CSR initiative be an integral part of the business strategy and not a separate department."

The Wharton article had also quoted Marcus Chung, Vice President, CSR and Sustainability Practice, Fleishman-Hillard, as saying, "There are more CSR practitioners today whose main job is to find ways to support business strategy and save the company money."

Leading PR consultancies featured in the CSR A list of PR News are: APCO Worldwide, Burson-Marsteller, Carmichael Lynch Spong, Cone Communications, Edelman, Euro RSCG Worldwide, MWW Group, RF|Binder, Strategic Objectives, Waggener Edstrom Worldwide and Weber Shandwick.

In India, a couple of consultancies claim they have built CSR practices, but whether any agency has initiated the required steps to equip itself to tap the emerging opportunity is the million dollar question. Stakes are high, and fast-tracking plans is the key to success.

Daniel Edelman: Creative PR guru

Daniel Joseph Edelman, founder of world’s largest independent PR consultancy Edelman, passed away on January 15, 2013. He was 92.

Journalist-turned-PR professional Edelman was known for his awe-inspiring creative PR work which had laid the foundation of modern PR. Some of his inventions are today an industry standard. These include, according to Verena Dobnik of Assocatied Press:
·       Media tour: In 1948, Dan Edelman invented the media tour – meeting journalists in their office
·       Celebrity connect: Retention of film star Vincent Price as a spokesman for the California's wine industry in 1960s and activist Gloria Steinem to promote birth control pills. A KFC executive dressed as late Colonel Harland David Sanders (founder of KFC), and served chicken to the waiting media at actress Elizabeth Taylor's 1991 wedding to construction worker Larry Fortensky, resulting in positive coverage for KFC
“PR people, I'm told, have the reputation of being glad-handers and schmoozers, intent on getting their clients' stories into print or on the air without much regard for how newsworthy those stories are,” wrote Rance Crain, President and Editorial Director of Crain Communications Inc, which publishes nearly 30 weekly business newspapers and trade papers including Ad Age.   “My opinion is that the good ones consistently come up with great story ideas, and so it's up to me to glad-hand and schmooze them so they won't give their stories to somebody else. And Dan Edelman... was definitely worth cultivating. No. 1, he had great clients that we at Advertising Age (and other Crain publications) liked to write about... And No. 2, he always came up with good story angles.”  

“One of the highest accolades you could receive from Dan was the recognition that you were a ‘hard worker’,” wrote David Brain, President and CEO, Edelman Asia Pacific “But if you were lucky enough to hear that you were also aware that he worked harder still… Any firm that loses a founder will mourn his passing and look to his legacy and re-visit his teachings. But few founders have the same effect on their whole industry.”
“In the same way that the automotive industry will never see another Henry Ford, that the fast food business will never see another Ray Kroc, PR will never see another Dan Edelman.”  wrote Paul Holmes in the Holmes Report. “Along with a handful of contemporaries -- Harold Burson, Carl Byoir, John Hill, Al Golin, Al Fleishman and Bob Hillard, David Finn -- Dan invented the modern public relations firm. But while most of the firms these individuals created are structurally similar (in terms of international offices, practice areas, sector focus), they were culturally quite distinctive -- and none was more distinctive than Edelman.”

Quoting from Franz Wisner’s book, Edelman and the Rise of Public Relations, Julia Hood, Executive Vice President,  Haymarket Media / PRWeek, narrated how the late PR legend had made his son Richard head of the New York office after struggling to find a replacement manager for the office. “Why don't you just take a shot at this until I find somebody decent,” Daniel apparently told Richard Edelman, who was 27 then.
Daniel retired as Chief Executive Officer in 1996, when Richard took over.  Richard is now the President and CEO of Edelman, the world’s largest public relations firm with 66 offices and 4,500 employees worldwide. 

Richard said his father was PR  "a marketing and public relations genius, because he really understood that PR could sell brands". 

 “He was a true entrepreneur,” wrote Richard. “Sometimes that led us to do things a bit backward…we began our Asian operations in Kuala Lumpur, Malaysia because one of our UK executives was marrying a man who lived there and wanted to stay at the firm.”

Big data: Revolutionary PR changes on anvil

Big data will bring about revolutionary changes in public relations, both in campaign planning and implementation as also impact assessment, as the following developments indicate:

·        Darren Oddie, co-founder at Agile.ci, has been talking about the end-to-end landscape for big data-based marketing. Data analytics enables marketing to move from mass communication to right-time dialogue, according to Oddie who had held senior marketing positions at Visa, American Express, Glaxo SmithKline and Reuters
·        WPP, London-based communications giant, has paid $70 million for a 20 per cent stake in Argentine big data marketing services company Globant which employs 2,700 people across 14 cities in Argentina, Brazil, Uruguay, Colombia, the US and the UK. Globant is known for its IT-business-function-convergence-oriented basket of services. These include technical infrastructure and creative agency style design services. Sir Martin Sorrell, CEO, WPP, had summed up the rationale for the acquisition. “Increasingly, clients want better coordination between their IT departments and their marketing departments, between their Chief Information Officers (CIOs) and their Chief Marketing Officers (CMOs),” he had said. “There are many consulting companies or digital agencies that are expert in one function or the other. Few, if any, do both and even fewer can integrate deep technical and creative capabilities on a global scale as Globant does. Partnering with Globant will allow our companies to increasingly provide our clients with insights and skills that will make their digital marketing efforts even more effective and simpler to manage at both the front and back ends.”  Globant’s clients inclulde American Express, JP Morgan Chase & Co., LinkedIn, Electronic Arts, Google and Coca-Cola
·        New York Times blogger Nate Silver had attained stardom by accurately predicting the recent US presidential elections, aided by his data sets, his statistical models and his computer. Before poll punditry, he made proven his mettle in baseball and poker
·       George Shen, an information management specialist master with Deloitte Consulting, had written“Analytics played a bigger and more important role in the (recent US Presidential) election than just predicting the outcome. Analytics was an integral part of the 2012 political campaign... During the six months leading up to the election, the Obama team launched a full-scale and all-front campaign, leveraging Web, mobile, TV, social media and analytics to directly micro-target potential voters and donors with tailored messages.... The Obama campaign management hired a multi-disciplinary team of statisticians, predictive modellers, data-mining experts, mathematicians, software programmers and quantitative analysts. It eventually built an entire analytics department five times as large as that of its 2008 campaign.”

Eric Schmidt, CEO, Goolge, has said, “Every two days now we create as much information as we did from the dawn of civilization up until 2003. That’s something like five exabytes of data.”

According to IBM, the world creates 2.5 quintillion bytes of data every day — so much that 90% of the data in the world today has been created in the last two years alone.

David Selinger, Founder, CEO and Data Scientist at RichRelevance, a provider of personalized shopping experiences, has said, “Big Data is the business challenge of the 21st century, and 2012 was the year that the Big Data revolution rocked the C-suite.”

India too will have to catch up, both on corporate and non-corporate fronts... With elections round the corner in India, and increasing apprehensions regarding a more fragmented verdict, it would be interesting to see whether big data will play any role at all in consolidating vote banks.

Mukund Rajan is Tata Group’s Chief Ethics Officer

Mukund Rajan has been appointed as the Group Spokesperson and Brand Custodian of Tata Sons, the promoter firm of Tata Group companies.

Rajan will serve as the Chief Ethics Officer and will oversee and manage all corporate communications and brand-related activities for the Group in India and abroad, according to a statement issued by Tata Sons. He will also oversee all Tata Group Corporate Social Responsibility activities as Chairman of the Tata Council for Community Initiatives.

This is the first major appointment after Cyrus Mistry took over as the Chairman of the Group after Ratan Tata retired on December 28, 2012. Rajan reports into Mistry in his new role which is with immediate effect.

Rajan, 44, started his career as a Tata Administrative Service Officer and has been with the Tata Group for over 18 years. Prior to the latest appointment, Rajan was Managing Director, Tata Teleservices (Maharashtra) Ltd, Head, Private Equity Advisory, Tata Capital Limited and Managing Partner, Advisory Team, Tata Opportunities Fund.

Communications and successful leadership

Scott Edinger, Founder, Edinger Consulting Group, in his Harvard Business Review blog, offers tips on effective communication for successful leaders.

Edinger prescribes that, to be good communicators, one can rely on Aristotle’s time-tested formula revolving around three critical elements -- ethos, pathos, and logos.
 
·        Ethos is essentially one’s credibility. Credibility depends on one’s credentials, position held within an organization, technical expertise, strong levels of integrity and character.

·        Pathos is making an emotional connection — giving people one’s undivided attention, taking an active interest in the team members' career development and being enthusiastic about both the organization's progress and the individuals who enable it are ways that leaders do this well

·         Logos is the mode for appealing to others' sense of reason. Employing strengths in strategic thinking, problem solving and analytical skills are how today's leaders express logical ideas in clear and compelling enough terms to influence outcomes.... Facts do not speak for themselves, which is sad, since it would save so much time if they did. Effective leaders know the effort and time spent making explicit the connections they're drawing from the data to the analysis to their conclusion are well worth it.

 “These three elements of communication reinforce one another,” Edinger had written in his article. “You may rely heavily on data and analysis (logos) to make a point and in so doing create a perception of expertise and authority on a topic (ethos). And while all three are necessary to excellent communication, improving your ability to do any one of them will help you become a better communicator and so a better leader. Combining them is the path to achieving the greatest success.”

PR is $10 billion industry: Holmes Report

The Holmes Report has reported that the global public relations industry grew by 7.9 per cent (8 per cent in 2010) to $10 billion in 2011. The industry employs more than 66,000 people worldwide, up from around 59,000 people in 2010.

The key findings of the research are:

·        Small, midsize and independent firms, that had submitted their numbers for both 2010 and 2011 to the Holmes Report, saw their fee income increase by an average of 10.4 per cent, reporting combined fees of $4.5 billion (up from $3.75 billion in 2010)
·        Publicly traded holding companies (WPP Group, Interpublic, Omnicom, Publicis Groupe, and Havas), that did not provide revenue numbers to the Holmes Report, reported PR revenues of around $4.4 billion, with average growth of just less than 6 per cent. Those groups between them own eight of the 10 largest public relations firms in the world
·       The networks of independent public relations firms submitting numbers to the Holmes Report had together revenues of around $1 billion. In addition, at least $450 million in revenue comes from member firms that elected not to submit data to the Holmes Report

In all, the Holmes Report has identified a little more than $9.4 billion in worldwide public relations fee income.

“Given that there are literally thousands of smaller public relations listed in other rankings and directories and participating in trade associations around the world, we are confident that the public relations agency business is today at least a $10 billion business,” says Paul Holmes, Editor-in-Chief of The Holmes Report. “It is clear from this research that PR is a significant global business, and that it is growing faster than the world economy as a whole.”

Google-Good Relations creative PR tie-up

PR consultancies across the world will be in a position to fast-track adoption of advertising agencies’ creative practices if Google’s ‘experiment’ with Good Relations Group succeeds.

The Google-Good Relations three-month collaborative programme will enable the latter’s 15 employees team to develop “advertising agency style insights and creative ideas for clients, using tools that have previously been used primarily by creative and media shops”. The curriculum includes planning sessions, creativity workshops and the full array of Google’s ‘planning for insight’ products.

Amelia Torode, Head, Digital and Innovation, Good Relations, is among the participants. Torode, who has rich advertising experience, has been urging the PR industry to adopt advertising agencies best creative practices.

Google too is expected to benefit from the collaboration as it enables the company to showcase “the creative potential of its platforms and tools”.

Though the Google-Good Relations creative initiative is commendable, it should be remembered that creativity has been an integral part of all outstanding communications campaigns, and that several PR consultancies and PR professionals have been known for their creative contributions. Incidentally, this blogger had played a key role in setting the creative departments in two Indian PR consultancies....

However, as the Google-Good Relations experiment would enable a much larger canvass for creativity, if it succeeds, here is wishing them all the very best.

Dentsu’s global PR plans

Arun Sudhaman reports in The Holmes Report:

Dentsu has acquired US PR consultancy Mitchell Communications Group as the Japanese Group sets out to build a PR capability in Western markets. Mitchell’s clients include Walmart, Hilton Hotels and Tyson Foods.

Mitchell founder Elise Mitchell has taken charge of building Dentsu Network’s international PR offering.

PR and ethics

Sue Wolstenholme is launching an ‘only ethical approach’ campaign as the new President of the Chartered Institute of Public Relations (CIPR), a professional body in the United Kingdom for public relations practitioners.

“PR can be used for all kinds of things, whether it's starting wars or selling bars of soap,” according to Wolstenholme. “But when it is professionally done it usually changes something for the better. It is such a powerful tool it must be done ethically.”

Only 34 per cent of informed publics globally trust Indian companies: Edelman Trust Barometer

The 2013 Edelman Trust Barometer has revealed that companies from China and India are trusted by only 35 per cent and 34 per cent of informed publics globally.

The Barometer found multinational companies headquartered in developed markets consistently have higher trust levels than those in emerging markets (China, India and Mexico scored lowest).
Another significant finding is that less than one in five respondents believes a business or governmental leader will actually tell the truth when confronted with a difficult issue.

“We’re clearly experiencing a crisis in leadership,” said Richard Edelman, President and CEO, Edelman. “Business and governmental leaders must change their management approach and become more inclusive by seeking the input of employees, consumers, activists and experts such as academics, and adapting to their feedback. They must also pass the test of radical transparency.”
Other key findings from the 2013 Edelman Trust Barometer include:

  • Business leaders are trusted by less than 50 per cent in 16 of 26 markets, while government leaders are trusted by less than half in 21
  • Technology (77 per cent) and automotive (69 per cent) were again the two most trusted industry sectors
  • Germany saw the most significant increases in trust across all institutions. NGOs up 16 points, media up 19 points, business up 14 points and government up 15 points
  • Argentina experienced the greatest decline in trust among all institutions.
 Earlier Edelman Trust Barometer survey findings

MSLGROUP’s insight into Indian PR industry

MSLGROUP India, Publicis Groupe’s flagship PR consultancy in India, has released its annual state-of-the-industry report, ‘Public Relations in India: Inside the Industry’s Mind and the 2013 Outlook’.

Based on a third-party survey across the executive hierarchy in the PR industry in India, the report has concluded that talent crunch remained a top-of-mind issue for PR professionals. “A stringent selection process, followed by high investment in training, was the respondents’ top suggestion for dealing with this challenge,” according to the report.

The report feels that successful brands will be those that work collaboratively with communities, governments, customers and organizations to co-create solutions to the world’s toughest problems. Businesses will move from Corporate Social Responsibility to collaborative social innovation in 2013.

Here are the key findings of the survey:

• 51% of the respondents felt the industry would grow more than 20% over the next 12 months
• 63% of the respondents said their clients’ PR budgets are intact, while 33% said the budgets have in fact increased
• 48% of respondents identified digital media as the hottest vertical for 2013, followed by lifestyle and technology
• Knowledge-based PR emerged as a trend with 41% of respondents stressing the need for thought leadership initiatives.

Jaideep Shergill, CEO, MSLGROUP India, said: “The PR industry in India is witnessing a transformation. The industry is making an extra effort to be viewed as a strategic partner, and clients are acknowledging its value. With this study, we wanted to give the industry a voice. Having spoken to all stakeholders, from PR professionals to media to clients, I can say with certainty that a unified industry approach is the way ahead.”

Olivier Fleurot, CEO, MSLGROUP, said, “The report would have been incomplete without a survey of the way the media – a key stakeholder – perceives the PR industry. A qualitative survey of media persons conducted by MSLGROUP India offered a variety of suggestions – ranging from customized press releases to a better understanding of deadlines – for a mutually beneficial relationship with PR professionals. I would say that amongst the big companies keeping the PR aspect in focus, we are a strong leader. I am happy, and though our investment in Hanmer happened at a wrong time but investing in 20-20 has come at a right time. The industry trend is moving from media relations to strategic communications. We are here to help our clients build a business strategy which helps them reach their business goals. Our job is not the same as it was 10 years ago.”

Wednesday, January 26, 2011

Trust in business steady in India: Edelman Trust Barometer

Trust in business is holding steady in India and China, according to Edelman Trust Barometer study conducted by Edelman, the world’s biggest independent PR consultancy, in 23 countries across the world.

Richard Edelman, President & Chief Executive Officer of Edelman, writes in his blog, “The lead of the story must be that trust is transformed. In the wake of the financial market meltdown at the end of 2008, we have gone through a series of corporate crises during 2010 -- from oil spills to product recalls affecting the leading enterprises in five sectors to the near-bankruptcy of five nations in the EU. The result is an even more profound shift in the expectation of companies to operate with increased transparency and in a manner that delivers profit while improving society, captured by my client Indra Nooyi, CEO of Pepsico, in her phrase, ‘Performance with Purpose’.

“We also found unprecedented skepticism, a need to hear, see or watch news as many as 10 times before achieving belief, plus an increased reliance on those with credentials and expertise.”

The key findings of Edelman Trust Barometer study are:

State of trust

Trust in business — There are now three clear country groupings – the Trusters, the Neutrals and the Distrusters. The Trusters, notably Brazil, China, and India, withstood the financial crisis and had positive economic performance this year. There is evidence of rising trust in business over the past two years even in flat-lined economies such as France, the Netherlands and Italy. The key change in 2011 is the switch of Germany and the USA, with the former now in the Neutrals with Japan, while the USA moves to the Distrusters along with Russia and the UK. Business is as or more trusted than government in 19 of the 23 nations we surveyed this year.

Trust in government — There are fewer countries in the Truster category for government, including Brazil, China, Singapore and the UAE. The largest drops in trust in government were in Germany and the USA. Note that in general, trust in business and government is now in sync, a change in the past two years. Though there are exceptions, such as Germany, where rising trust in business is observed despite less confidence in government.

Trust in media — We note that trust in media continues to rise in the developing world and to slide in the developed economies. The most depressing findings for media were in the US and UK, respectively 27% and 22%, which we attribute to increased politicization, aggressive tone and scandals.

Trust in industries — Technology continues to wear the halo as the number one industry in both developed and developing economies (98% trusted in China). Banking and financial Services are now the least trusted industries of the 16 we review annually. The reputation of banks continues to plummet, especially in the US, UK and Ireland, down nearly 50 points in the US in the past three years to a new low of 25%. Automotive has made an amazing recovery, to rank as the #2 trusted industry in the world, attributable to the GM IPO, the launch of electric cars and the association with modernity in the developing world.

Trust in nationality — The companies headquartered in Canada, Germany and Sweden continue to enjoy a trust advantage, while the UK and Switzerland are closing the gap. American companies are much better regarded in the past two years, especially in Germany and Russia, while preserving a strong reputation in such key future markets as Brazil and China. The companies based in the BRIC nations saw rising trust scores in developing nations, but a decline in markets such as the USA.

Earning trust

What drives corporate reputation — The top four factors are: high quality products and services; Company I can trust; transparent business practices; treats employees well. The bottom two are: highly rated leadership and delivers consistent financial returns. This is the second year in a row that we see a reversal of constituent elements of reputation, suggesting a rebalancing of priorities for business.

Shareholder versus stakeholder — We asked specifically about Milton Friedman’s contention that the social responsibility of business is to generate profit; about 50% of respondents agreed. But, we also probed whether companies need to create shareholder value in a way that benefits society even if that causes a reduction in shareholder value; about 80% agreed with that point of view, from developed to developing economies. This indicates a desire for profit and purpose, a stakeholder approach to shared value.

Credible spokespeople — Given the uncertainty in the economy and plethora of sources of information, respondents said that they believe spokespeople with proven expertise, in order academics, technical experts from a company (for first time), financial analysts and chief executive officers. The recovery of the CEO in reputational terms is remarkable; this is the highest score we have seen in nine years, though in the UK and US that means only about one third believe a CEO is credible. We also found that in a crisis, the number one trusted source is the CEO, followed by an outside expert, followed by a technical expert from the company.

Information sources — More people go initially to search engines, then to online sources for information about a company. The brands most noted are the familiar mainstream media stalwarts such as the Financial Times, Wall Street Journal, BBC, Globo and CCTV. Blogs and social networks substantially lag the mainstream brands.

Benefits of trust — If you go into a crisis as a distrusted company, it takes only 1-2 negative stories for a person to believe negative news. If you go in as a trusted company, it takes only 1-2 positive stories for you to achieve belief. Trust is a protective agent, a facilitator of action. We find further evidence of desire to buy products, recommend products/services and buy shares in a trusted enterprise.

Trust is no longer a commodity that is acquired but rather a benefit that is bestowed, earned through action, reinforced by transparency and engagement. Business has the opportunity to build an enduring foundation of trust if its leaders commit to a strategy that brings value to both investors and society -- the What and the Why. However, today it must further explain as to how it makes money, a new level of transparency on business practices -- for instance, ingredients in products. Finally, it must build relationships across the entire stakeholder universe, the Where, by engaging audiences across the four leaf clover of media (Mainstream, New, Social, Owned) and joining the continuing conversation by adding value and learning from the critics.

Forbes expects global firms to redefine PR in India

Rohin Dharmakumar writes in Forbes India. His report:

A wave of international firms is sweeping over India’s shores. They see the potential to take the business of public relations to a more professional, systematic and pro-active level. They are trying to shake up a smug Indian industry used to treating PR as a minor cost centre focussed on managing a few journalists; and help it prepare for a more assertive and connected consumer base. In the process, PR is becoming a more strategic but expensive affair for companies…

Indian PR firms are at the middle of this change. Before time runs out, they must shape up to fight the onslaught or sell out to foreign brands. Many have indeed sold out — Genesis to Burson-Marstellar, IPAN to Hill & Knowlton, Hanmer & Partners and 20:20 Media to MS&L and Roger Pereira & Associates to Edelman. A few foreign agencies have started from scratch — Text100, Fleishman-Hillard, Waggener-Edstrom and APCO.

But a few Indian firms are holding out. “I don’t need someone to tell me how to compete,” says Madan Bahal, CEO of Adfactors, one of the leading PR firms in the country.

The public relations business in India is fairly young; most firms trace their origin to the years following economic reforms. Using just sheer doggedness in chasing down journalists, a growing bunch of entrepreneurs fueled a mini-boom. For them, public relations meant little more than media relations. “Everybody who spent a few years doing PR opened up their own mom-and-pop shops, selling media execution. They worried about which hotels to hold press conferences in or what gifts to give journalists,” recalls Rishi Seth, founder-CEO of Six Degrees PR who earlier headed multinational PR firm Text100 in India.

The business was soon commoditised. Most worked on wafer-thin retainers and even slighter profits. To control costs, they began hiring inexperienced and cheaper employees. For many, the profession degraded to ‘planting’ nice stories about their clients or blocking negative stories. Journalists they managed to befriend co-operated…

All that changed with the Internet and mobile phone. There are more than 500 million mobile users and about 80 million Internet users in India today. Nearly 70 percent of Web users are on some social network. Their trust in newspapers, TV news and yes, business magazines, is down sharply: 35-40 percent lesser than two years ago, according to a 2010 survey conducted by Edelman. But they’re connected, eager for information and willing to speak their mind.

“This is the age of radical transparency. If you’re a company behaving in an unethical way, then you will be found out and castigated very quickly. And you cannot hope that your relationships with journalists — however good they may be — will protect your reputation then,” says Arun Sudhaman, managing editor of The Holmes Report, a London-based PR trade publication.

The entire market for agency PR in India is estimated to be just around $100 million annually, says Sudhaman. That’s about 35 percent of just Edelman’s 2009 global revenue. Average monthly retainers still hover around the Rs. 100,000-150,000 figure, a pittance compared against companies’ marketing or advertising budgets. “In New York I wouldn’t consider retainers less than $20,000 a month,” says Robert Holdheim, Edelman’s India head…

International agencies bring a whole new way of doing PR in India. Unlike the local firms which follow ad-hoc methods, they work with data, templates and processes. They try to understand the business problems of the clients rather than just look at the marketing problems…

International firms have become ubiquitous on the PR scene in India. The only three exceptions are Vaishnavi Communications, Perfect Relations and Adfactors. Even they are under constant wooing by foreign firms looking for a toehold in India. Dilip Cherian, founder of Perfect Relations, says, “We are constantly courted and are consistently one of the first ports of call for an acquirer. And though we have always believed that any deal that enhances all-round shareholder value is good, we are not in a hurry to sell.”

Bahal of Adfactors, is categorical that he will not sell out to an international agency. He sees Indian agencies selling out as a sign of weakness and a lack of vision or ambition among entrepreneurs to take their firms to a higher level. Worse, most entrepreneurs have sold out for ‘peanuts’, he says. Bahal is open to partnerships ‘by the hundreds’ though.

The fact remains that the top Indian PR companies like Vaishnavi and Adfactors are still the revenue leaders; they are no weak competitors.

At the end of the day, the nationality of the PR agency doesn’t matter, but the quality and ethics behind their work do. As Hill & Knowlton India’s head Radhika Shapoorji says, “Consumers are getting more empowered. They know their rights and will not stand for nonsense. And in sectors like aviation, telecom and hospitality, due to the sheer number of customers and customer touch points, you can almost expect a crisis a day. Therefore companies must treat each complaint as an issue, before it becomes a crisis.”

(With additional reporting by Samar Srivastava)

Wednesday, June 23, 2010

Mumbai, Stockholm ahead in PR creativity: Global expert

Smaller countries – also emerging economies like India – are ahead in the PR creativity race, according to global experts.

Colin Byrne, CEO, Weber Shandwick Europe, says, “We tend to think that London and New York are the creative centres of PR, but it is increasingly places like Stockholm and Mumbai. It is a bit of a wake-up call for the industry. A lot of what I saw from the UK was pretty pedestrian.”

Byrne is on the Cannes Lions PR jury this year, where Gatorade’s Replay won the Grand Prix out of 571 entries to the Cannes Lions PR category.

Arun Sudhaman reports that 12 Gold Lions were handed out this year, with advertising agencies again proving more successful than their PR counterparts. Sweden’s Prime PR submitted a strong performance with two golds: for Carwinism on behalf of Audi Sweden, and Kraft Foods’ Save Christmas campaign.

“The other conventional PR agencies to win Gold Lions were Fleishman-Hillard, for a consumer campaign on behalf of the Papa John’s pizza chain in the US, and Italian firm Barabino & Partners, which scored two golds for Heineken’s Auditorium Football campaign,” Sudhaman reports.

The jury, which was rather disappointed with the performance of the more mature PR economies of the US and the UK, praised the work done in Sweden, Brazil, Australia and Spain. While the US won two golds and three silvers in addition to its Grand Prix, the UK bagged just four Silver Lions. The Asia-Pacific region won six silvers while Germany secured three golds and one silver.

“The small countries are giving the large countries a run for their money,” says Paul Taaffe, Jury President and Global Chairman and CEO, Hill & Knowlton. “Those markets have a tradition of risk-taking.”

As “the quality of entries was not enough” in categories like crisis communications, public affairs and internal communications, no awards had been given this year.

Dovetail PR into marketing: Jain

Archana Jain, Managing Director, PR Pundit, says that “norms rendering PR as distinct from marketing are no longer appropriate in this age of consumerism, in which consumers aggregate all messages in making a decision to interact with the brand or company”.

In an interview with Ashish Pratap Singh of exchange4media, she says, “Since marketing and communication is all about perceptions and not a battle of products, we believe in winning the battle of perceptions creatively. Thus, we pursue a systematic approach to gaining insights that drive ideas and creativity for effective, smart PR campaigns to build brand reputation. We strive to communicate brand promises in a fresh and relevant manner.”

Monday, May 31, 2010

PR boom in 2010 with accent on ethics: Shergill

Jaideep Shergill, CEO, Hanmer MS&L India, has taken the lead in addressing reputation issues associated with the PR industry.

“Current research supports a historical trend of associating public relations with all things unethical – lying, spin-doctoring, and even espionage,” he says in an exclusive interview to Pallavi Goorha Kashyup of exchange4media. “But today, there are concrete strides made in modern public relations toward becoming ethical advisors in management... A PR professional is in some ways a very important brand manager for a company, brand meaning in this case, a promise a company gives to a customer and keeping that promise. If a PR professional determines that a company is doing something against their promise, it is their role to speak out within the company and ask the company to address that issue. And this trend has been consistently increasing with PR consultancies becoming more structured and process driven.”

Shergill also urges PR professionals to revisit their obsession with media for message delivery. “Public relations has changed significantly over the last few years,” he says. “Even if you don’t buy into the idea that online communities and relationships are part of the public relations function, it’s hard to deny the rising importance of blogs, the gradual decline of traditional media and the impact that online conversations can have on brands.”

Considering the rapid changes in the industry, there is a need for public relations professionals to upgrade their skills while acquiring new ones. “PR pros still need the basic attributes and skills that they’ve always needed such as writing, communications skills, an eye for detail and pro-activeness, and of course, media relations,” he says. “But going forward, we will require talents and personality traits somewhat different from today. It is all about relationships. A PR person who approaches the market from a relationships standpoint will win. Decisions need to be based on data, not gut feelings. Listening and absorbing what the customers, media, influencers, analysts, employees, neighbours and community are saying is important. Professionals should have the ability to understand and design strategies based on the needs and perceptions of the target audience, and value truth and transparency above all.”

Shergill says that “recession has forced PR consultancies to get their houses in order, and evolve or they will be in deep trouble... The challenges the economy had posed for our profession in 2009 was quite bad. Clearly, revenues in our business dipped in 2009, but the news was not all bad. Generally speaking, public relations performed better than other communications disciplines in 2009.”

The Hanmer MS&L CEO is bullish about the Indian PR industry in 2010. “The size of India’s public relations industry is poised to be on a substantial growth curve due to increasing competition among companies to build brands,” he says. “The year has started well for everyone, but going forward, it is important to continue to create value beyond just providing media relations.”

Friday, May 07, 2010

Indian PR industry basks in glory

Today is probably a red-letter day for the Indian PR industry with the key media acknowledging the invaluable contributions made by the communications campaign leaders of the Ambani brothers in the big gas battle.

Perhaps this is one of the rare occasions when public relations professionals are being single out for praise as ‘key people’ and ‘top generals’. The Economic Times today wrote about both Niira Radia, Chairperson and Managing Director, Vaishnavi Corportate Communications Pvt Ltd whose subsidiary NeUcom Consulting manages PR for Mukesh Ambani’s Reliance Industries Limited, and Tony Jesudasan who heads the communications department of Reliance Anil Dhirubhai Ambani Group.

“The chairperson of Vaishnavi Corporate Communications is possibly the most successful public relations entrepreneur in India, as her company handles the PR business of two of India’s largest business conglomerates — the Tatas and RIL,” writes The Economic Times. “She has emerged as Mukesh Ambani’s key Delhi ally in the past two years.”

The paper continues, “Radia is known for her connections in the government and media and is reputed to be an astute barometer of political and media dynamics, apart from being a charming conversationalist. Her colleagues describe her as thorough, hands on and very demanding.”

“Chief troubleshooter and ace spinmaster of the Anil Ambani establishment, Tony Jesudasan manages the group’s media needs from his second-floor office on 6, Aurangazeb Road,” writes the paper. “His involvement goes back to the days of the undivided Reliance empire.”

Jesudasan has “the rare ability to think and function calmly under great pressure. Chose to join the younger sibling when the brothers split, and has since then remained Anil Ambani’s trusted lieutenant in Delhi as Group President, Corporate Affairs, R-ADAG.”