Will PR budgets increase in 2010?

The answer is of course that some will go up and some will come down.  But which will go up and which will fall?  Here are some answers:

The winners:

1.  It seems obvious to expect the businesses that are doing well to spend more on PR.  They might but it isn’t guaranteed.  Growing businesses will spend money on marketing that has a clear ROI.  If there is one thing this recession should have taught agencies it is to focus on ROI.  If don’t yet have a measure – get one.

2.  PR that directly links to product sales will do well in any economy.  The trick is making the connection.  That is easier said than done, especially when you are working with larger businesses that have comprehensive marketing programs.  In this situation everyoe wants to take the credit.  What is still surprising to me is how rarely PR people do some simple analysis that shows the results they generated on a graph that connects to sales a company has made.  It isn’t a perfect solution but in the absence of anything better…

3.  IPOs are set to bounce back in a big way in 2010.  Investor focussed PR will clearly be immense importance and value.  This isn’t a market you can just jump in to though.  Relationships with investment banks and law firms are critical.  If you are not connected to this world, don’t expect to see many opportunities.

4.  As governments around the world continue to try and drag their respective economies out of recession and fix the problems that got them into the situation, legislation will continue to be passed.  This legislation will affect businesses large and small.  Agencies that offer help to those businesses have a great opportunity in the next year.  If you don’t understand the world of public policy, now may be the time to do some reading.

5.  Efficiency, efficiency, efficiency.  Companies that got hit in the downturn but survived learned how to become more efficient.  The challenge is that they want to carry on finding new efficiencies.  This creates an opportunity for agencies able to offer clients a more comprehensive, global solution.  This is of course an area where agencies will make promises they can’t keep.  But clients want efficiencies, so efficiences will be offered.  The real winners will be those able to actually deliver on these efficiences.

The losers:

1.  Agencies that survived the recession may feel they are owed a future.  But if they didn’t learn anything from the recession then in reality they will continue to struggle.  Make a list now of the lessons you learned.  This should include the things you want to change and the things you believe you did right.

2.  Agencies that paid lip service to their staff during the downturn will pay a huge price as the recession ends.  Staff will be grateful that you gave them a job but if you aren’t offering a career don’t expect to keep them when the good times return.

3.  Digital is the obvious growth opportunity but it is also the area that successful agencies will invest in the most.  If you don’t focus on digital and invest the time and money they do, you will fall behind and that could ugly, fast.  Are you focusing on digital and making the necessary investments?

4.  Agencies have all taken on clients that they shouldn’t have.  During the recession, agencies justified taking on the less than perfect clients by telling themselves it is about survival.  But the reality is that in better times, better staff will leave to work on better clients.  They may not have had that choice in the recession.  In the months ahead that choice will return and they will leave.  Client makeovers are not easy but if you need one, start working on it now.

This isn’t an exhaustive list by any means but if you take one lesson away I hope it’s that we all need to learn from the recession we’ve just been through.  If we fail to learn, we’ll fail to improve.  If we fail to improve, we won’t just stand still, we’ll get overtaken.


Can Google beat Apple?

The launch of the Droid by Google and Motorola was notable for one reason: It effectively ignored RIM (Blackberry) as the competition and instead targeted would be Apple iPhone customers. When you think about that it’s quite amazing. The Blackberry defined the smartphone market and still holds a huge share of the market. Yet the marketing of the Droid shows that neither Motorola or Google views RIM as the long term competitor.

This begs the question: can Google beat Apple? It’s a Goliath versus Goliath marketing war. Apple is known to be an marketing machine, whereas Google isn’t. Ask yourself when you last saw a Google advert of any kind? When did Google sponsor a sporting event? Have you received an email from Google promoting a new product lately? You do see a lot of PR from Google. There’s rarely a day when they’re not in the news and of course when you’re the go to search engine you don’t need to run TV ads. Though I could imagine some funny ads where there’s a Google guy and a Yahoo! guy.

But given Google is so used to having much of its marketing done for it, can it beat Apple? It stands a chance because others such as Motorola and HTC really want to beat Apple and will throw a lot of $$$ at the problem. But this means Apple has no real rival. It has lots of minor rivals but they are also competing with each other. Apple must love that.

Of course the battle isn’t just a consumer marketing battle, it’s a software developer battle. This is where Google stands a real chance and where it has been active on the marketing front. When the Droid launched there were apps available but only a few hundred. That number is rising fast but then so is the number of iPhone apps. Ironically Apple is in the position Microsoft has long been with the PC and Google us where Apple has been with the Mac. For years people thought the Mac was dead but then they released a really great machine and the tide turned. Today the Mac is an amazing success story. Sure its sales are still less than that of all PCs but any single PC manufacturer would love the Mac volume and price point. In other words if Apple can succeed against the PC, Google can against the iPhone. It just takes a great product and some great marketing. Right now they have neither and they don’t have forever to get it right which of course they are smart enough to know.

2010 promises to be a fascinating battleground if Google does produce a great product. But for them to win they will have to really learn fast if they want to win a marketing war with Apple.


Is the PR industry still in recession?

PR people tend to be glass is half full people.  This means that when the recession started they tended to put a very brave face on it and were almost in a north African river (denial).  Indeed it was only when things had hit the bottom that many PR heads would really talk about how bad it had been.  But has the industry really started a recovery?  Here are some arguments for and against:

FOR:

1.  Clients have released project dollars that had otherwise been held on to

2.  Budgets cuts are no longer taking place and in some cases clients are modestly increasing their spend

3.  Staff are starting to get recruited as agencies feel more confident of their revenue streams

4.  Staff who are moving are starting to look at agency work rather than in-house.  In-house is often considered the safe place to be in a recession (relatively)

5.  New business opportunities have improved for agencies and the process has become more normal (number of agencies involved and budgets are back to normal)

AGAINST

1.  The release of project dollars is potentially just a year end phenomena.  Many clients have calendar fiscal years and so they are now starting to think about their budgets for 2010.  If they don’t spend their ’09 budgets they will have a challenge getting $$ in 2010.

2.  PR budgets are generally linked to the sales of companies.  Given sales are still sluggish, across the board rises in PR spend are unlikely for quite some time.

3.  While the new business environment is much improved it is still very tough relative to a non-recessionary environment.  Procurement departments have used the recession to sharpen their teeth and get better deals.  It will be some time before agencies can get back the concessions made during the recession – if ever

The above would suggest that as an industry we are still in the early stages of the recovery (assuming you are still a glass is half full person).  But what it really says to me is that we should not be looking at the recovery as a chance to get back to where we were but rather as a reminder that we need to innovate and come out of the recession offering a better solution to the one we did going in.  This is easier said than done and I suspect that many agencies will look at progress in social media and feel that they can tick the box called innovation.  I’d urge them to think again.  The shift towards digital is important but every part of the industry has embarked on that mission.  Real innovation is spotting the less obvious challenges and embracing them along with the obvious.  Good luck in that challenge.  Oh, and if you figure it out, do let me know!


Is Apple in control of its PR?

The Street.com wrote an interesting piece today on how almost all the news we digest about Apple comes from rumor sites rather from Apple itself.  Jason Schwarz, the article’s author, asks: “When was the last time you went to the Apple Website to find news about the company?”  He then answers for you: “probably never.”  His point is that Apple prides itself on its secrecy and its tight lippedness (if there is such a word) but in the process that encourages third parties to speculate on what Apple is doing.  This speculation means that in the short term the company’s fortunes can be over or underrated.  He is effectively warning investors that they should invest based on the long term fundamentals but be aware that the share price on any given day may have absolutely no connection to those fundamentals.  In other words they are a gamble.

This article got me thinking about the issue of whether a company that is so controlling when it comes to communication is really in control of its PR?  On the one hand Apple does control its message.  It is rarely reactive and is often seen refusing to comment. This means it only comments on news it is driving.  This SHOULD be good for control of the message as it means they are not helping give oxygen to stories they can’t control.  However, by saying so little they invite widespread speculation, which by its very nature they can’t control.  In many ways you could say Apple is like a celebrity that rarely talks to the press. We have all seen the tabloids speculate about celebrities being pregnant, getting divorced, having affairs etc.  And we all know that we tend to believe, or at least absorb, some of that content even though we know there is little chance of it being great journalism.

That said, by staying away from a great deal of this speculation, it is easier for people to tell what news has their blessing and what news is speculative.  In essence it comes down to a question of balance.   If a celebrity goes on Oprah’s couch and sets the record straight, then the speculation is either confirmed or dismissed.  That single appearance will then shape the speculation that will follow until the next time the celebrity sits down with someone in the media.  This is much how Apple’s PR works.  They make few major public appearances but when they do they make a big splash and make sure to set the record straight.  After that we all go back to the rumor sites to learn about the other Apple.  By starving us of real news they make us crave it all the more.  On balance I’d say Apple was in control.  At least for now.


Why don’t clients use the ideas that win pitches for their business?

I started looking back on pitches we’ve made over the years.  It’s amazing how they’ve evolved.  In my first pitches we used 35mm slides and a projector!  Not surprisingly these were pretty simple presentations.  One thing that hasn’t changed since those early pitches is how rarely the ideas in those pitches actually get used.  When you think about it, it’s quite amazing.  Agencies spend hours and hours brainstorming ideas for pitches, knowing full well these ideas have a 1% chance of being used.  Why aren’t they used?  Well there are good reasons:

1.  When you are pitching you don’t know the full situation – for example you may have some ideas on how to launch a company or product.  When you get appointed you often find out that, say, the product doesn’t quite work the way they implied in the brief.

2.  The resources to actually do the pitch ideas don’t really exist.  Oh yes, the budget just got ‘trimmed.’

3.  The clients have other more immediate priorities. ‘Launch that product?  We need to solve this crisis before we do anything.’

These are all good reasons but they still shouldn’t result in so few ideas actually being  used.  I think instead what this shows is that clients don’t for a minute believe they will use the ideas that come in pitches.  Instead they want to ‘see how we think.’  This is where things also get messy.  When agencies pitch they often use more than the proposed account teams in their brainstorms.  In other words what clients sometimes see is thinking that came from people not in the room.  Worse than that, they sometimes get thinking from people in the room that won’t actually be working on the business.  This creates the illusion that they are getting the right thinking, without them actually getting the right thinking.  It’s a tough problem to solve but as I said earlier in the week, I think the pitch process has been broken for a long time.

Perhaps PR Week could have an award for the best idea that was in actually in a pitch AND got used.  And maybe one for the best  idea that didn’t get used…


Should PR agencies have to pitch?

PR Week today announced that Chegg.com, an interesting startup, has hired Weber Shandwick for its PR.  According to the article they didn’t go through an RFP process.  Instead they were hired because they’d worked with the head of comms before at Match.com.  Some will argue that this is no way to make such an important decision.  Others will argue that the person who hired them knew what she was going to get and saved the company a lot of time and trouble.  She also, saved various agencies a lot of time as she clearly knew who she wanted.

Just about every agency head I know complains about the pitch process for the following reasons:

1.  Agencies have to invest a lot of time and money in pitches.  Indeed the cost of pitching can often wipe out the profits they’d make from an account for much of the first year.

2.  Agencies are forced to give away a lot of free ideas in the pitch process.  This is frustrating when those ideas get used by another agency that wins the account.

3.  Procurement departments are using pitch processes to drive a bargain and rarely are they focused on getting the best consultants to help a company.

4.  Every process is different so agencies have to reinvent the wheel each time.

5.  Some agencies don’t play fair.  In other words they make promises they have no intention of keeping – such as staffing

6.  Some clients don’t play fair.  They suggest they’ll be a great client and have a great budget.  They then reduce the budget and change the role of the agency.

7.  There are at least another three common complaints but I won’t bore you.

Given all these complaints should agencies have to pitch or should there just be a standard process by which agencies get hired?  While the latter would save everyone time, it’s sadly impractical.  Every client is different and has different needs.  A standard process denies agencies who really want to invest a pitch the opportunity to show how much they really want the business.  Also, some agencies use the current process to show innovation. Make the process standard and that chance goes away.

I for one would love to see the current process improved but I fully suspect I’ll hear the same complaints in five years that I hear today.  Instead, clients need to be reminded of the best way to handle the pitch process so they get the right agency without putting the agency world through the mill in the process.


Can PR turn around a business or a brand?

PR agencies will at some point find themselves faced with the opportunity to work with a company that at one point in its history was a great.  The brand in question was so well known that it was a household name.  Years later that brand has lost its way and some rival has eaten its proverbial lunch.  PR people, being the optimists they are, love the idea of making the once great business great again.  Of course, deep down even they know that their chances of success are tied to what the brand in question actually does.  If the client has finally start making a good product again, and started solving pricing and distribution problems, then PR can really step up and be a major part of the turnaround.

I recall being invited to try and help a once great Canadian business (there’s aren’t many Canadian tech businesses that were huge so you can probably guess who they are).  I met the CEO and we talked about how they could tell their story in a better way. I threw out a tag line that summed up this approach.  Following the meeting I heard that he loved the thinking that I and a colleague had given him.  We were excited to be a part of this future success story.  Then things went quiet and then, rather odly, we heard that our contact at the client had been asked to leave and then we heard that the tag line we’d given them was being used for all their adverts.  We were paid nothing for that tag line btw.  Indeed it seemed they’d used the meeting to get some free advice and were then acting on it.  Of course the free advice didn’t really save the company and it has now filed for bankruptcy.

I truly believed the advice we had given was great advice.  But at the end of the day the advice was about how they managed their communications and not about how they managed their business.  What they needed was a better business model, not a new tag line or better messaging.  When you realize that PR alone can’t really save a business it makes you (as a PRO) feel a little sad.  We’d all like to think that with our help the business can be turned around.  But unless the problems that got the business in to trouble in the first place have been solved, then PR will at best slow the process of decline.  So next time you are faced with an opportunity to turn around the image of a company, be sure to find out that that is all that is needed and that the business itself is taking the steps it needs to to fix its underlying business.  Otherwise you too could witness the death of a brand that has really sharp positioning but little else.


Don’t simply focus on a great answer to the question

White House press secretary Robert Gibbs got in a little fight with April Ryan of American Urban Radio today because in effect she was asking a series of tabloid questions about the recent state dinner (you can watch the exchange here).  Whether you think he was right or wrong for cutting her off in the way he did, you can’t help but realize that the questions a press corps asks will inevitably shape the stories we read.  If Robert Gibbs had indulged April Ryan and talked about the state dinner for a few minutes it would have edged out another question from another reporter.  It made me wonder if there should be a system by which we vote on which questions the media plan on asking at these meetings so we can be sure administrations are being asked the right questions.  Of course that would be stupid and open to all manner of abuse.  But it made me realize that in PR we tend to measure the outputs from questions and often assume the media will ask the right questions.  By only focusing on influencing the answers to questions, we are missing out an important part of the process. Getting the media (social or otherwise) to ask the questions we believe are most important is the where the other half of the battle should be fought.


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