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Manibalan Manoharan Senior Group Head

  • May 28, 2019
  • Roger Darashah

It Doesn’t Always Pay to Follow the Money

PR’s unique capabilities are proving more relevant than ever

The CMO is the new king/queen, paid is the new earned, analytics are the new media rounds . . . . the siren call of integrated communications is familiar and seductive.  The potential to evolve beyond the tactical towards the strategic, to access real budgets, and, most of all, to be granted an audience with the CMO. This would signal the down of PR’s renaissance, when PR firms would engage – and compete – with other marcoms disciplines as an equal.  All that was required was to ‘integrate’ the offering (alternatively known as ‘throw another planner at it . . .’) and untapped revenue would inevitably follow.

The marketing budget, you see, was the New Eldorado; ten times the size of traditional PR monies, uninhibited by convention, PR agencies could finally give free reign to their imagination, creativity and strategic thinking.

The idea was (is) compelling. But flawed.

The largest proponents of the so-called ‘planner multiplier’ are actually going backwards.  Clients are not ready, it seems, to handover large sums to PR firms to carry out what their advertising agencies are already doing.  This is simplistic.  Let me clarify by adding a caveat to the previous statement: unless the PR proposition is distinct and more valuable than the incumbent advertising offering. And here’s the issue; this caveat contains all the truth and explanation for the current state of affairs.

Unless the integrated PR offering is significantly distinct to that offered by traditional marketing or advertising agencies, it is a hard stretch for any CMO to switch. PR firms are not necessarily in denial, but many have tried to compete on their rivals’ turf; in effect, to ‘out advertise’ the advertisers. As their presence at Cannes, their high profile advertising recruitments, and obsession with advertising awards attests, many are simply trying to compete directly with their ATL rivals. The irony is that PR firms remain all at sea when competing against their advertising rivals for PR awards on the latter’s home turf!

As any first year MBA candidate would correctly surmise; this is corporate madness.  New market entrants don’t make a habit of competing with incumbent rivals on the latter’s terms; Uber’s model isn’t about replicating (or even, improving) the traditional licence taxi market, AirBnB isn’t investing in hotel real estate, and Amazon has long ceased to really complete with the high street.  Each of these examples illustrates new entrants playing to their particular strengths, creating a distinction and gradually redefining the marketplace accordingly.

Perhaps the PR industry’s eyes were blinded by the untapped budgets within their reach; if only they could recalibrate their offering away from the CCO towards the CMO.  Their default response being to imitate rather than innovate, to replicate their competitors rather than make a virtue of their differences.  

The consequences of such an approach were inevitable: to ‘out ad’ the advertisers, on the latter’s terrain, PR agencies would be obliged to recruit premier talent from the advertising sector (planners, creatives, buyers etc); and I don’t just mean great professionals, I mean the most outstanding practitioners of their generation, in order to beat their incumbent advertising rivals.  The analogy with Uber is telling; as if the latter’s attempts to compete with licenced taxis were based on hand picking the fastest licenced taxi drivers from incumbent operators!  No one would consider this a credible business model. Any competitive advantage gained from such an approach would be more than offset by the premium that Uber would have to pay to entice the Lewis Hamilton of cabs to join them.

Our industry is no different; competing with advertising incumbents on their terrain requires a distinct premium to be paid to ATL leaders to effectively take a chance and switch sectors. And then, to expect them to compete with established ATL firms in a pretty distinct environment, with different structures, skills and processes to deliver a product which is not only comparable with the incumbent alternative, but superior. It’s a long shot, to say the least.

The alternative is, of course, to ‘compete’ on PR’s terms, to play to our strengths as a discipline, and make a virtue of the same. Today’s business environments are defined by unprecedented levels of uncertainty, ambiguity and risk; audiences have never had a greater voice and greater access to resources to mobilise opinion. In many instances, such influence is disproportionate to the size of the following or the relevance of an issue to a business, but its impact remains.

These are circumstances in which – dare I say it – ‘traditional’ PR skills become invaluable. A capacity to interpret and anticipate opinion, to engage and build relationships with influencers, to navigate conflicting issues and interests and to find common ground. And – most of all – the ability to do all this in real time, every single day. These are the services that CEOs are currently is desperate need for; and the ones for which they will pay a premium. Such environments are not necessarily the territory of the CMO whose domain is usually dominated by planned events – launches, brand positioning, events, merchandising etc. The rough and tumble of the real world is usually reserved for the CCO.

Following the money may be a seductive strategy in the short term, but sticking to and building on our particular skills and relationships may prove a better bet for our industry in the long run.

Published by Roger Darashah

Roger Darashah brings close to 23 years of international communications experience with stints in the UK, France, Spain, India and Brazil. He is part of the senior management team at Adfactors PR, working in the capacity of Chief Operating Officer.