Empirical Public Relations Survey: Penn Schoen Berland

EMPIRICAL PUBLIC RELATIONS A REPORT BY

WEEKLY ADVERTISING, MEDIA & MARKETING NEWS

INTRODUCTION

Ashw Ani s ingl A MD & Chief Executive, South Asia, Penn Schoen Berland

A

s communications professionals are acutely aware, great shifts in economic, social, political and technological behaviour are afoot, altering the fundamental project of Public Relations. India is at the locus of many of these changes. As one of the most dynamic economies, with one of the fastest-growing middle classes, with the world’s largest democracy, it is possible that these shifts, and their impact on the way companies communicate with consumers, are felt more profoundly here than in any other market.

The Indian communications industry requires nuanced understanding of the complex challenges and opportunities it faces. This study was conceived to facilitate such understanding; as such, we interviewed a wide variety of senior practitioners on the both the agency and client sides, including CMOs and practice managers, to incorporate

consensus on many key issues, but one conclusion was paramount: the industry must adopt Empirical Public Relations: communications strategies rooted in the science of public opinion.

77% of the professionals we talked to said that the primary factor making the industry more complex in the last few years is the ongoing shift from measuring coverage of a communications initiative to measuring its business impact.

Empirical Public Relations demonstrates how campaigns move the needle by creating and applying insights at each phase, working from baseline measurements of perception, through communications tested to maximize effectiveness, to tracking research to demonstrate ROI. Practitioners agree that applied insights result in impact than 89% of clients say they are more comfortable with research-based campaigns. However, a crucial gap currently prevents the industry from applying science to its practice: agencies are waiting for clients to demand measurement, while clients are waiting for agencies to propose it. Fortunately, we also found a bridge.

Clients say they are ready to pay the premium for insights-based campaigns – meaning that agencies must create a framework to address this opportunity.

This new model will be constructed on a foundation of expertise in the science of public opinion, which will require development of the communications industry’s human capital. Therefore, industry leaders must enhance their organizations’ applied science capabilitiesby upgrading their own skills, developing those of their employees and hiring new expertise into their teams. And much as Empirical Public Relations will change the way campaigns are priced and paid for, addressing the human capital challenge will require a revised model of compensation, investments in technology, both to communicate most effectively in an ever-accelerating, ever more-global digital world, as well as to improve As Public Relations engages in more and more projects with demonstrative bottom-line impact for clients, the industry will increasingly earn a place at the table with chief executives, a perspective which will lead to more business-impactful communications. This positive it is founded on Empirical Public Relations.

THE COMMUNICATIONS INDUSTRY IS BECOMING MORE COMPLEX:

EMPIRICAL PUBLIC RELATIONS: THE NEW MANTRA FOR THE INDUSTRY

I

A MORE COMPLEX ENVIRONMENT

MOREÊCOMPLEX

SAME

87%

87% of Indian communications professionals believe that the industry has become more complex in the last few years.

Of these respondents, 77% say that the shift from an emphasis on the measurement of coverage to an emphasis on the measurement of business impact has been the key factor.

The success or failure of a communications program is now understood in terms of the impact it has on a client’s bottom line – a development which has proven challenging.

To understand the new rules of engagement, Penn Schoen Berland (www.psbresearch.in) partnered with IMPACT magazine to conduct, for the second annual India Public Relations & Corporate Communications conference, a first-of-its-kind study amongst practicing public relations and communications professionals in India.

Other key issues leading to rising complexity include the rise of new media and a more informed audience (74%, respectively), increased competition in the marketplace (72%), the rise of social media (68%) and the increasingly global nature of issues and crises (63%).

1. Business impact is supplanting coverage as the most important success metric.

2. New media is becoming more important than traditional media.

3. Globalization: local stories no longer necessarily remain so.

4%

LESSÊCOMPLEX

n the aftermath of the global financial crisis, some have observed that the underlying principles of commerce have changed, and that we’re now operating in a “New Normal” – an era of persistently underwhelming economic progress, defined by higher unemployment and slower growth.

Concurrently, the Indian economy has risen in prominence – moving from the fringe of the empire towards the center of the universe.

Compounding these changes, rapidly adopted and quickly evolving new communications technologies have altered and accelerated the way information travels. Consequently, the brief of Indian communications professionals has fundamentally changed.

Our research identified a significant paradigm shift for the communications industry, defined by three broad changes:

9%

The growing need to demonstrate the business impacts created by communications programs is creating demand for strategies that implement scientific methodologies at each stage of the process – Empirical Public Relations.

How do you think the public relations/communications industry has changed in the past few years?

ASKED OF ALL RESPONDENTS

SHIFT IN EMPHASIS FROM COVERAGE TO BUSINESS IMPACT IS THE LEADING CHANGE FACTOR: 77% 74% 74% 72% 68% 63%

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SHIFTÊFROMÊCOVERAGEÊTOÊIMPACT NEWÊMEDIUMSÊOFÊCOMMUNICATIONS MOREÊINFORMEDÊAUDIENCES INCREASEDÊCOMPETITION SOCIALÊMEDIA GLOBALIZATION

What are the key paradigm shifts you have noticed in the ways the public relations/communications industry used to operate in past few years?

ASKED OF ALL RESPONDENTS

EMPIRICAL PUBLIC RELATIONS IS REQUIRED “Assessing media coverage is not enough,” says one client. Indeed, 89% of clients for communications services say that they would be more comfortable with researchbased campaigns. However, 62% of clients report that their agencies do not provide research insights in support of their initiatives.

This is true even though both agencies and clients agree that Empirical Public Relations are more effective and provide greater value than traditional, untested campaigns.

In practice, implementing insights-based communications techniques turns out to be a collective action problem: Agencies are waiting for clients to demonstrate willingness to pay for the services, while clients are waiting for agencies to demonstrate the capabilities – and to propose relevant work.

The question for the industry: who is going to break the vicious circle?

AGENCIES FAIL TO PROVIDE RESEARCH INSIGHTS TO SUPPORT THEIR INITIATIVES:

EMPIRICAL PUBLIC RELATIONS = VALUE In theory, the gap should be easy to bridge.

38% YES 62%

NO

Does your public relations/communication agency provide research insights to support their ideas or initiatives?

ASKED OF CLIENTS

DESPITE CLIENTS’ INCREASED COMFORT WITH RESEARCH-BASED CAMPAIGNS: 11%

YES NO 89%

Would you feel more comfortable with your public relations/ communications recommendations and ideas if research insights were provided to support the ideas or initiatives?

ASKED OF CLIENTS

“Public Relations companies do not propose measurement.” – CLIENT “Nobody is ready to pay for it.”

– PROVIDER

73% of clients say they are willing to offer an additional incentive to an agency that can demonstrate that their campaigns result in measurable business impacts, and 93% are willing to pay a premium for strategic counsel based on empirical evidence.

Meanwhile, 69% of agencies say that clients are willing to pay a premium for strategic counsel based on research, while 75% believe that clients will offer an additional incentive for measurable impacts.

One issue that may be impacting uptake rates is the question of capacity. More than one third of agencies (38%) report that they still lack any kind of formal process to measure the impact of their campaigns.

Before they can reap the value of Empirical Public Relations within client relationships, agencies will need to build the capacity to conduct measurement of program efficacy within their practices.

CLIENTS WILL PAY A PREMIUM FOR ADVICE BASED ON EMPIRICAL EVIDENCE: 7%

27% 93%

YES 73%

NO

Would you be willing to offer an additional incentive for demonstrated, measurable impact? // Would you be willing to pay a premium for strategic counsel based on empirical evidence? ASKED OF CLIENTS

AGENCIES ALSO BELIEVE THAT CLIENTS WILL PAY MORE FOR EMPIRICAL PR: 25%

31% 69%

YES 75%

NO

Do you think your client would be willing to pay a premium for strategic counsel based on research led insights provided by your firm? // Would your client be willing to offer an additional incentive to your firm for measurable impact? ASKED OF AGENCIES

HUMAN CAPITAL: A GROWING CONCERN Clients aren’t blind to these limitations. 70% say that upgrading current employees’ skills should be agencies’ top priority. 69% say that they do not believe that PR and communications agencies are generally geared to respond to the changes in the industry. Clients who express such skepticism also say that agencies must focus on attracting and maintaining appropriate talent (63%) and adding new skills and expertise (57%).

Agency professionals are aware that talent improvement must be a major focus of the industry.

As Public Relations adopts more complex methodologies to respond to more complicated situations, building teams capable of strategic, insights-based advisement, not just process implementation, is increasingly key. Team continuity is also a concern.

Agencies are taking steps to meet these challenges. 77% say they are planning to upgrade the skills of their existing staff, 62% will add new skills or expertise to their team, while 46% plan to increase the size of their team.

91% of agency respondents say that their clients’ expectations have changed over the last year – perhaps the best possible indication of the transition the PR and communications industry is undergoing to adapt to the New Normal, and certainly a good reason for agencies to focus on building capacity and expertise.

31% YES NO 69%

AGENCIES

Do you think public relations/communication agencies 77% in general are geared to deal with paradigm shifts in the industry? ASKED OF CLIENTS 62%

CLIENTS AGREE WITH AGENCIES 46% THAT UPGRADING SKILLS OF EXISTING STAFF IS TOP PRIORITY: 0 10 20 30 40 50 60 AGENCIES

63%

46%

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40

57%

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70

ADDÊNEWÊSKILLS/EXPERTISE INCREASEÊTEAMÊSIZE

70%

ATTRACTÊ&ÊRETAINÊTALENT

What talent management steps should public 63% relations/communications agencies take to meet the needs and expectations of clients ? ASKED OF ALL RESPONDENTS, SHOWING TOP FIVE 57% RESPONSES 10

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80

UPGRADEÊSKILLSÊOFÊEXISTINGÊSTAFF

CLIENTS

0

80

70%

62%

10

70

CLIENTS 77%

0

Communications professionals identify a range of threats to the growth and improvement of the industry. One major challenge is talent acquisition, management and retention.

NEW EXPERTISE FOR NEW EXPECTATIONS

CLIENTS ARE SKEPTICAL OF AGENCIES’ ABILITY TO ADAPT TO THE NEW NORMAL:

60

70

80

UPGRADEÊSKILLSÊOFÊEXISTINGÊSTAFF “There’s a huge team to service my ADDÊNEWÊSKILLS/EXPERTISE account, but of these ten people, INCREASEÊTEAMÊSIZE hardly anyone ATTRACTÊ&ÊRETAINÊTALENT would be doing the thinking work.” – CLIENT

“New people lack patience and quickly move on to the client side, or to new jobs.” - PROVIDER

Client expectations are evolving toward higher-value services. Clients still work with communications partners for media relations – though strategic media relations, with an eye to business impacts, are increasingly preferable – but the mixture of services is becoming increasingly diverse. Corporate Social Responsibility, Digital Marketing, Thought Leadership and Internal Communications advisement round out the top five services sought by Public Relations clients – all of which can benefit from an Empirical Public Relations approach.

While shifting expectations represent a challenge to Indian communications professionals, they also represent a significant opportunity: as clients increasingly associate Public Relations with more sophisticated, business-critical projects, the industry will naturally move up the services value chain.

AGENCIES BELIEVE CLIENT EXPECTATIONS ARE CHANGING: 9%

YES NO 91%

Do you think that your clients’ expectations from your firm have changed over the last year? ASKED OF AGENCIES

CLIENTS SEEK MORE THAN JUST MEDIA RELATIONS FROM THEIR PARTNERS: 88% 88% 78% 75% 66%

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MEDIAÊRELATIONS CSR DIGITALÊMARKETING THOUGHTÊLEADERSHIP INTERNALÊCOMMUNICATIONS What are the various public relations or communication services you seek? ASKED OF CLIENTS, SHOWING TOP FIVE RESPONSES

MEASUREMENT: THE HOLY GRAIL OF PUBLIC RELATIONS While communications professionals articulate clear desire to implement scientific approaches, there’s still work to do. Just 45% of clients say they have implemented formal processes to understand the impact of their campaigns. And for many, media measurement remains the primary (and in many cases, sole) methodology for measuring program effectiveness.

However, an increasing number are looking beyond media: 62% say they gauge their success at least partially through stakeholder research, while 46% monitor reactions on the Internet.

MORE THAN HALF OF CLIENT RESPONDENTS LACK FORMAL PR IMPACT ASSESSMENT PROCESS:

45% YES NO 55%

Do you have any formal process of measuring impact or effectiveness of your public relations or communications programs? ASKED OF CLIENTS

MEDIA MEASUREMENT REMAINS CLIENTS’ DOMINANT MODE OF PR PROGRAM ASSESSMENT: 92%

While Empirical Public Relations has yet to be fully adopted, much progress has been made. And the introduction of more effective methods of media measurement will further its development.

85% 62% 62% 48% 0

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80

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MEDIAÊMEASUREMENT MEDIAÊEXPOSURE STAKEHOLDERÊRESEARCH INTERNALÊFEEDBACK

FINDING SUCCESS IN THE NEW NORMAL

AGENCIES MUST INVEST IN RESEARCH AND TECHNOLOGY TO MEET CLIENT EXPECTATIONS:

Inevitably, the New Normal landscape will benefit some competitors, while others are left behind. Our research suggests several action items for success going forward: 1. Communications firms must continue to strive to implement the established science of Public Relations - both to show clients their Return on Investment, and to create actionable insights to leverage in campaigns.

2. Firms must build human capital by making investments in the knowledge and skills of current employees, and continue to attract new talent who can expand the industry’s range of expertise.

3. Firms must embrace technology, not just from a new media perspective but also to drive operational and process efficiencies.

Barely half (52%) of agency respondents believe that agencies in general are prepared to deal with the issues presented by the ongoing paradigm shift – but 83% say that their own agency is prepared.

In some cases, the emperor will be revealed to be naked. Indian communicators must begin to adapt themselves to the new context – or face a brutal reality check.

70%

63% 57%

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RESEARCHÊFORÊROI RESEARCHÊFORÊINSIGHTS TECHNOLOGY/TOOLS

What should public relations/communications agencies make technological investments in to meet the needs and expectations of clients like you? ASKED OF AGENCIES

AGENCIES SKEPTICAL OF PEERS’ PREPAREDNESS FOR THE NEW NORMAL, BUT THEY’RE CONFIDENT OF THEIR OWN: 17%

YES

48% 52%

83%

NO

Do you think public relations/communication agencies in general are geared up to deal with the changes/paradigm shifts in the industry? // Do you think your agency is geared up to deal with the changes/paradigm shifts in the industry? ASKED OF AGENCIES

INTERNETÊACTIVITY How do you measure the effectiveness of your public relations or communications programs? ASKED OF CLIENTS

FOR MORE INFORMATION: S. Khanna, Director, Marketing; skhanna@ps-b.com; M: +971 111 8615; www.psbresearch.in ABOUT THIS REPORT: Penn Schoen Berland conducted 9 qualitative in-depth interviews (both in-person and over the phone) and 80 online quantitative interviews between February 22 and March 17, 2011. Sample size makes the results indicative.

AUDIENCE DEFINITIONS: Clients - Chief marketing officers, heads of communications in organizations; Agencies - Public relation professionals (manager and above); Media - Journalists and production professionals (managers and above).