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University of Southern California Dissertations and Theses
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Are public relations firms ready to lead in the new communication normal? the changing agency landscape and PR’s shifting roles
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Are public relations firms ready to lead in the new communication normal? the changing agency landscape and PR’s shifting roles
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1
ARE PUBLIC RELATIONS FIRMS READY TO LEAD IN THE NEW COMMUNICATION NORMAL?
THE CHANGING AGENCY LANDSCAPE AND PR’S SHIFTING ROLES
by
Ran Xu
A Thesis Presented to the
FACULTY OF THE USC GRADUATE
SCHOOL UNIVERSITY OF SOUTHERN
CALIFORNIA
In Partial Fulfillment
of the Requirements
for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)
May 2015
Copyright 2015 Ran Xu
2
Dedication
The following work is dedicated to the M.A. in Strategic Public Relations degree
program that has reinforced my passion for the public relations profession and taught me
quintessential strategic thinking skills from which I would benefit for a life time. The thesis is
also in honor of the many devoted PR veterans and zealous PR neophytes who have generously
invested time and wisdom into making the industry more prosperous than ever.
3
Acknowledgements
As a student with little real-world industry experience, attempting to write a big-picture,
trend-looking white paper is both an ambition and an arguable challenge. I could not have pulled
through without the encouragement and help from my thesis committee.
I would like to firstly thank my thesis chair—Jerry Swerling—for the invaluable
guidance and critique he has provided. I would also like to thank Brenda Lynch for her patience
and enthusiasm along the way and Burghardt Tenderich for his professionalism and
thoughtfulness as my thesis reader.
Finally, I’d like to offer a special thanks to my interviewees for their kindness and
generosity in taking the time and sharing their knowledge.
4
Table of Contents
Dedication ................................................................................................................................... 2
Acknowledgements ..................................................................................................................... 3
Preface ......................................................................................................................................... 6
Research Methodology ............................................................................................................ 6
Roles and Positions ................................................................................................................. 6
Introduction ................................................................................................................................. 7
Chapter One: Marketing Evolves to Talk the PR Language ..................................................... 10
From Campaigns to Conversations ....................................................................................... 11
Reputation Speaks Louder Than Brand Voice ...................................................................... 13
Brand Journalism Is the New Advertising ............................................................................. 14
Building Brands by Running Newsrooms ............................................................................. 16
Chapter Two: Agencies Jumping on the Earned Media Bandwagon ........................................ 18
Mergers and Acquisitions of PR Firms ................................................................................. 19
New Approach and Thinking to Campaign Development .................................................... 20
In-House Earned Media Capabilities ..................................................................................... 22
Talent Recruitment/Training ................................................................................................. 24
Chapter Three: Deep Dive into the Agency Land Grab ............................................................ 27
Social Media .......................................................................................................................... 28
Influencer Marketing ............................................................................................................. 34
Content Marketing ................................................................................................................. 38
PR Firms’ Foray into Non-Traditional Areas ........................................................................ 44
Chapter Four: Conundrums Faced by the PR Industry .............................................................. 48
Is the Name PR a Disservice? ............................................................................................... 48
PR as Brand Strategy Lead .................................................................................................... 50
Creativity and PR .................................................................................................................. 55
Access to Marketing Budgets ................................................................................................ 58
Chapter Five: What Do Agencies of the Future Look Like? ..................................................... 62
Full-Service versus Specialist ................................................................................................ 63
The Rise of In-House Agencies ............................................................................................. 67
The Collaborative Agency ..................................................................................................... 71
Chapter Six: Finding the Sweet Spots ....................................................................................... 75
Media Relations in the Internet Age ...................................................................................... 75
PR and the Bottom Line ........................................................................................................ 78
5
The Channel-Agnostic Agency ............................................................................................. 81
Chapter Seven: Recommendations ............................................................................................ 85
Conclusion ............................................................................................................................. 87
Bibliography .............................................................................................................................. 89
Appendix: Industry Interviews ................................................................................................ 102
Industry Interview: Hank Wasiak ........................................................................................ 102
Industry Interview: Daryl McCullough ............................................................................... 104
Industry Interview: Jeff Sweat ............................................................................................. 106
Industry Interview: Alexandra Bruell .................................................................................. 108
6
Preface
Research Methodology
The findings in this paper were drawn from both secondary and primary research.
Secondary research included thorough review of news stories in major trade media outlets,
studies and reports from prominent consultancies and research bodies, white papers from
established companies, and professional organization websites.
Following secondary research, the author conducted in-depth, one-on-one interviews with
three executive-level industry veterans and one specialized reporter covering agency news.
Roles and Positions
The rise of social media and content marketing has given rise to a plethora of novel titles
and positions, therefore it’s worth clarifying here their respective job descriptions. A content
creator is someone dedicated to producing various forms of content—from photography to blogs,
from videos to infographics. A typical ad agency art designer and copywriter, a freelance writer, a
videographer, or a vendor like NewsCred can all become content partners of brands and their
agencies. Usually, a social media community manager, who is responsible for day-to-day post
updates and fan interactions on brands’ social media accounts, should also be capable of basic
video and photo editing, as well as developing text-based content like short stories and how-to
guides. When it comes to earned media specialists, they are the ones who ensure that these
content get shared, mentioned, and recommended voluntarily by online entities. As such, they not
only devise content strategy from an editorial standpoint, but also content distribution strategy in
terms of channel selection and the interplay between earned, owned, and paid media. Inevitably, a
good earned media expert will work well with search engine specialists, digital media planners,
and ad buyers to optimize earned media amplification. Earned media specialists are also expected
to be cognizant of working with influencers to negotiate partnerships or online endorsements.
7
Introduction
On November 8, 2007, The Economist ran an article titled “Conversational Marketing:
Word of Mouse” asking whether social networking sites like Facebook will transform all aspects
of marketing communication based on Mark Zuckerberg’s vision: “For the last hundred years
media has been pushed out to people, but now marketers are going to be a part of the
conversation, . . . because people influence people.”
1
The answer today is an axiomatic yes. What the past seven years have witnessed is more
than just the proliferation of social and digital technologies, which can be quickly replaced by
new innovations that surface on a daily basis; it is the emancipating power of digital and social
media that is redefining marketing, probably forever. No longer the passive recipients of brand
messages, digital-savvy customers actively seek, evaluate, and critique the information dispersed
around the Internet about brands and the companies behind them. Often, these same consumers
belong to online groups where they exchange ideas, look for advice, and essentially form a shared
social identity with like-minded people. According to Experian Marketing Services, Americans
devote almost a third of their time online to social activities.
2
The underlying cause of social
media’s prevalence is that it significantly augments the physical social circles and human
interactions around which people structure their lives. As envisioned by Mr. Zuckerberg, the only
way for brands to “persuade” prospects today is to become the invited members of the
conversations that people voluntarily choose to partake in.
This whole notion of two-way communication and value exchange—that is, a company
delivering business outcomes by fulfilling the practical, emotional, and societal needs of its
1
“Conversational Marketing: Word of Mouse,” The Economist 385, no. 8554 (Nov 10, 2007): 93,
http://search.proquest.com/docview/223993858?accountid=14749.
2
Matt Tatham, “For Every Hour Online Americans Spend 16 Minutes on Social Networks,”
Experian, April 18, 2013, http://www.experian.com/blogs/marketing-forward/2013/04/18/for-every-hour-
online-americans-spend-16-minutes-on-social-networks/.
8
customers—is quite contrary to traditional marketing’s top-down, one-way method of building
brands. However, fostering positive relationships among different parties through conversations
and mutual understanding has long been the central tenet of the public relations discipline. Brian
Solis, world-renowned analyst and keynote speaker on digital transformation, dedicates his
newest e-book “What if PR Stood for People and Relationships” to illustrate how “relationships
are the pillars that define your (Public Relations) work, your brand and your legacy.”
3
The marketing and advertising world has taken heed of Public Relation’s increasing
significance, as evidenced by the American Association of Advertising Agencies’ 2014 PR
Forum; the Association of National Advertisers’ Insight Brief on Public Relations; McKinsey’s
“Beyond Paid Media: Marketing's New Vocabulary”; Boston Consulting Group’s “Harnessing
the Power of Advocacy Marketing”; the 2009 launch of PR category at The Cannes Lions
International Festival of Creativity; and a PR stunt being the first-ever campaign to sweep three
top Cannes Lions
4
. As is said in the ANA Insight Brief: “Marketing organizations and leaders
must recognize the way digital and social technologies have transformed the role of PR. Public
relations specialists can play a valuable role as the corporate storyteller, in addition to monitoring
social channels, mitigating a brewing crisis through social listening, and disseminating content.
They can also be used to influence a target audience at any stage in the consumer decision
journey.”
5
On the one hand, these trends suggest that PR is moving front and center of modern
brand marketing. On the other hand, they cast a warning sign that the golden opportunity
presented to the industry might be taken advantage of by its advertising counterparts who are
3
Brian Conlin, “What If PR Stood for People and Relationships? Insights from Brian Solis!,”
Cision, October 2, 2014, http://www.cision.com/us/2014/10/what-if-pr-stood-for-people-and-relationships/.
4
Laurel Wentz, “Cannes Swept by PR, Integrated, Internet Winners,” Advertising Age, June 29,
2009, http://adage.com/article/special-report-cannes-2009/cannes-ad-festival-swept-pr-integrated-internet-
winners/137630/.
5
Ken Beaulieu, “Public Relations: Beyond the Press Release,” Association of National Advertisers,
June 19, 2014, http://www.ana.net/miccontent/show/id/ib-updated-public-relations.
9
quickly adopting PR thinking and skill sets.
At the Council of Public Relations Firms’ Critical Issues Forum, Marc Pritchard, Chief
Marketing Office of Proctor & Gamble and long-time proponent of PR value, cautioned the
attendees: “You have never had more potential to be fully baked in to the marketing mix or to
lead brand-building effort. . . . You have to step up and make clear what your capabilities are.”
6
Though building connections is right down PR’s alley, reaching today’s media-overloaded
consumers can take as many as 75 different paths determined by varying sources of information,
media channels and digital devices that require a set of expertise beyond the scope of traditional
public relations.
7
Moreover, marketers can no longer afford to approach their marketing activities
from a channel-focused perspective when consumers today don’t make any distinctions between
types of brand interactions, whether they’re through a billboard advertisement, a blog post, an
online review, or a video commercial shared by a friend. In fact, the heightened imperative for
integrated marketing has given rise to an intriguing phenomenon gradually taking hold of the
agency landscape—different types of marketing service agencies traditionally defined by their
core competencies are borrowing from one another’s expertise areas, and the distinction among
agencies has been increasingly blurred by the fact that similar, if not same, digital services are
provided by all of them.
The intensifying discipline cross-over or the digital “land grab” means that PR agencies’
competitors are not limited to their fellow PR firms anymore; increasingly, they have to compete
for assignments with creative shops, media agencies, digital firms, and a plethora of new players
in the field. More importantly, as marketing clients steadily adapt their organizational structures
6
Michael Bush, “P&G's Marc Pritchard Touts Value of PR,” Advertising Age, October 27, 2010,
http://adage.com/article/news/p-g-s-marc-pritchard-touts-pr/146749/.
7
Rebecca Lieb and Jeremiah Owyang, “The Converged Media Imperative: How Brands Will
Combine Paid, Owned and Earned Media,” Altimeter Group, July 19, 2912,
http://www.slideshare.net/Altimeter/the-converged-media-imperative.
10
and agency partner roster in the changing marketing landscape, agencies accordingly are
navigating to find their new value propositions and positions of strengths.
It is thus this paper’s aim to explore how PR agencies have thus far fared as compared to
other types of service providers in terms of both establishing non-traditional capabilities and
developing core digital marketing offerings. Particularly, the thesis attempts to explore whether
marketing world’s growing acknowledgement of public relations has translated into PR agencies’
rising status as brand partners—and, if not, what the challenges and obstacles are. By looking into
what the client side demands and what the agency side has offered, the author will finally present
recommendations on PR firms’ new points of differentiations amid the reshuffling of agency
business brought about by the ongoing digital and social paradigm shift.
Chapter One: Marketing Evolves to Talk the PR Language
The popularity of Internet starting in the late 1990s has changed the face of marketing by
propelling marketers to adopt digital tools, build websites and gradually recognize the power of
earned media. Yet to a large degree, the change had been merely a digital extension of offline
marketing—print and TV advertising made into online banner ads, brochures made into web
pages, and so forth. It wasn’t until the proliferation of social media in the past five years that
marketing approaches were completely disrupted. This is because social media has distilled the
essential benefits of Internet: freedom of conversation, heightened connectivity and increased
transparency. Marketers used to brush off consumers’ conversations scattered across blogs and
online forums, but now they have no choice but to carefully monitor social chatters which can
potentially be escalated into massive social sharing. Social media has become an integral part of
people’s lives, from chit chatting to gathering information, from expressing opinions to forming
communities. According to analysts at the Boston Consulting Group, “the watchwords of the new
11
marketing environment are transparency, authenticity, and engagement,”
8
yet these keywords
have been familiar to the PR world for decades. In the era of consumer control, a fifth “P,”
standing for People, has been added to the traditional 4Ps of marketing: Price, Promotion, Product
and Place.
From Campaigns to Conversations
As early as 2005, when Facebook had just launched and Twitter was nowhere to be
found, “marketing as conversation” was identified as one of the key trends in a study jointly
conducted by the Association of National Advertisers (ANA), the Interactive Advertising Bureau
(IAB), and the American Association of Advertising Agencies (AAAA).
9
TV advertising
campaigns were marketing magic bullets at a time when direct-to-consumer communication was
limited and television was the single most effective medium for reaching a vast audience. The
past ten years have witnessed the burgeoning of digital technologies and social platforms that
enable marketers to connect first-hand with an unlimited number of people at unprecedented
levels of interactivity. In fact, brands that utilize more social media channels with greater
sophistication outperform their peers in financial growth, according to a study that looks into the
social media engagement level of the 100 most valuable brands ranked by Interbrand.
10
The
recognition for engaging consumers through conversations is reflected in Forrester’s “U.S.
Interactive Marketing Forecast, 2011 to 2016,” which shows that social media is the fastest-
8
Ed Busby et al., “The CMO’s Imperative: Tackling New Digital Realities,” The Boston
Consulting Group, November 2010,https://www.bcgperspectives.com/Images/BCG_The_CMOs_
Imperative_Nov_2010_tcm80-66995.pdf.
9
Edward Landry, Carolyn Ude, and Christopher Vollmer, “HD Marketing 2010: Sharpening the
Conversation,” Booz Allen Hamilton, accessed November 30, 2014, http://www.boozallen.com/media/file/
HD_Marketing_2010.pdf.
10
“The world’s most valuable brands. Who’s most engaged?” ENGAGEMENTdb, July 2009,
http://www.pwb.com/blogpics/socialreport.pdf.
12
growing category in digital marketing spending.
11
Repeatedly broadcasting sales-inducing brand messages is losing its relevance in the two-
way communications age when increasingly, audience attention is gained by listening to,
following, and participating in social chatter. According to Nielsen’s Global Trust in Advertising
report, an overwhelming 92% of the 28,000 consumers surveyed trust word-of-mouth
recommendations, and 70% of them trust online reviews, yet a mere 24% of them trust online
ads.
12
In fact, advocacy is deemed more important than awareness by the majority of over 250
marketers surveyed in a study on marketing transformation jointly conducted by ANA, AAAA,
the IAB, and consulting firm Booz & Company. Dave Morgan, former executive vice president
of AOL, echoes: “Marketing will be about leveraging and activating consumer groups—turning
consumers into prosumers.”
13
Successful brands have indeed been leveraging the power of positive online brand
mentions and conversations. Take Chipotle, the idiosyncratic brand known for dispelling ad
agency help. The company describes its marketing strategy this way: “Chipotle was built on
word-of-mouth marketing. We’re focused on reigniting word-of-mouth marketing, rather than big
advertising campaigns.”
14
Boston Consulting Group’s research on advocacy marketing
demonstrates that favorable word-of-mouth impressions, when compared to other forms of brand
11
Shar VanBoskirk, Christine Spivey Overby, and Sarah Takvorian, “U.S. Interactive Marketing
Forecast, 2011 to 2016,” Forrester, August 24, 2011, https://www forrestercom.libproxy.usc.edu/
US+Interactive+Marketing+Forecast+2011+To+2016/fulltext/-/E-res59379.
12
“Global Trust in Advertising and Brand Messages,” Nielsen, April 2012,
http://www.nielsen.com /content/dam/corporate/us/en/reports-downloads/2012-Reports/global-trust-in-
advertising-2012.pdf.
13
Landry, Ude, and Vollmer, “HD Marketing 2010.”
14
Natalie Zmuda, “Why Chipotle Ditched Ad Agencies,” Advertising Age, September 29, 2010,
http://adage.com/article/news/advertising-chipotle-ditched-ad-agencies/146181/.
13
marketing performances, correlate twice as highly with sales growth.
15
Reputation Speaks Louder Than Brand Voice
Digital and social media can significantly amplify positive word of mouth, yet the
disruptive power they have granted to negative word of mouth is far more profound; damages to a
brand can be made almost overnight and spread without regard to geographical boundaries. As it
was tersely put by executive chairman of Google, Eric Schmidt, “Bad product reviews trump
clever marketing.”
16
However, it’s not just disgruntled customers who can cast shadows on a brand’s image.
From food preparation procedures to treatment of employees and ingredient sources to senior
executives’ conduct, information about almost every facet of a brand’s company operations is
readily available via the Internet and social sharing. According to the Authentic Brands 2014
Study by Cohn & Wolfe, honest communications and sustainable practices are the two most
important brand factors to the 12,000 consumers surveyed, outweighing product attributes and
brand attractiveness.
17
Moreover, if product claims and brand promises are found to be
incongruent with consumers’ own discoveries, the company will bear the more detrimental
consequence of being regarded as dishonest and untrustworthy.
The online environment has created such levels of transparency that a damaged
reputation is perceived to be the biggest risk by over 300 C-suite executives, surpassing other
15
Pedro Esquivias et al., “Fueling Growth through Word of Mouth: Introducing the Brand
Advocacy Index,” The Boston Consulting Group, December 2013, https://www.bcgperspectives.com
/Images/BCG_ Fueling_Growth_Through_Word_of_Mouth_Dec_2013_tcm80-150593.pdf.
16
Will Yakowicz, “Five Things Eric Schmidt Learned From Running Google,” Inc., October 14,
2014, http://www.inc.com/will-yakowicz/5-things-eric-schmidt-learned-from-google.html.
17
“Brand Integrity More Important than Innovation in Consumer Purchasing,” Cohn & Wolfe,
accessed December 10, 2014, http://www.cohnwolfe.com/en/news/brand-integrity-more-important-
innovation-consumer-purchasing.
14
strategic business areas such as revenue models, economic environment, and competitive
threats.
18
Sir Martin Sorrell, CEO of the global agency holding company WPP Group, once
remarked: “Digital and social media make communication more challenging. You can lose
reputation that has taken many decades to build, in a simple click. This should put good PR at the
center of things.”
19
Accordingly, major brands such as P&G, Unilever, Nissan, and VISA have
recently merged their corporate communications and marketing departments—two departments
which have traditionally been separate and often isolated from each other. In fact, “growing
impact of reputation on consumers’ buying decisions” is identified to be the chief reason behind a
closer relationship between PR and marketing departments, according to a survey by Makovsy
Group.
20
The implications are clear: reputation management—the cornerstone of the public
relations discipline—is bound to play a central role in modern brand marketing.
Brand Journalism Is the New Advertising
In 2013, Tara Walpert Levy, managing director of ads marketing at Google, said this:
“Ads as content… Brands as publishers… 2013 is when we began talking about this. 2014 is
when we began acting on them as an industry.”
21
Various forms of content—from news stories to
blogs, from videos to infographics—take up more than half of people’s time spent online, and
18
“Exploring Strategic Risk: A Global Survey,” Deloitte, accessed December 21, 2014,
http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Governance-Risk- Compliance
/dttl-grc-exploring-strategic-risk.pdf.
19
Danny Rogers, “Sir Martin Sorrell on PR's Place in the New Wave of Integration,” PR Week,
last modified October 09, 2014, http://www.prweek.com/article/1316396/sir-martin-sorrell-prs-place-new-
wave -integration?HAYILC=RELATED.
20
“CMOs and CCOs Battle over the Web,” Makovsky, accessed November 15, 2014,
http://www.makovsky.com/insights/articles/cmos-and-ccos-battle-over-the-web.
21
“2014 IAB MIXX Conference Day One Highlights,” The Interactive Advertising Bureau,
accessed October 20, 2013, http://www.iab.net/events_training/mixx14/day.
15
content-sharing platforms like social media and email consume an additional 30%.
22
However,
attracting today’s media-overloaded online users to consume content has become increasingly
challenging. Countless pieces of content are generated on a daily basis—on one count, a typical
social consumer receives nearly 300 bits of content every day
23
—while the average online
attention span has reduced to a fleeting eight seconds.
24
The intensifying competition for audience attention has forced brands to think like
journalists and editors. McDonald’s was the first brand to broach the idea of “brand journalism”
back in 2004 for the purpose of rejuvenating the long-standing brand through dynamic
storytelling. Larry Light, former global CMO of McDonald’s, has since spoken at multiple
marketing conferences and written opinion pieces that brand journalism is more relevant than
ever and has become a “modern marketing imperative.”
25
In fact, the most successful and iconic
brands have already established their media footprints. Food & Family, the 18-year-old Kraft
Foods publication, enjoys a circulation figure higher than established magazines such as Food &
Wine even though it’s a paid subscription.
26
Brand journalism as a marketing approach also
explains the success of brands that rarely use advertising. Take Red Bull; this powerful brand has
a dedicated media house responsible for producing and distributing quality content. The shift
towards brand publishing is perhaps best demonstrated by the coveted brand Coca Cola, who has
22
Rob Medich, Kristin Kovner, and Jon Stewart, “Content is the Fuel of the Social Web,” AOL
Inc., http://advertising.aol.com/ContentFuelsSocial.
23
“Fun Facts,” IACP Center for Social Media, accessed December 10, 2014,
http://www.iacpsocialmedia.org/Resources/FunFacts.aspx.
24
“Attention Span Statistics,” Statistics Brain, accessed December 12, 2014,
http://www.statisticbrain.com/attention-span-statistics/
25
Larry Light, “Brand Journalism is a Modern Marketing Imperative,” Advertising Age, July 21,
2014, http://adage.com/article/guest-columnists/brand-journalism-a-modern-marketing-imperative/294206/.
26
Jack Neff, “Kraft Says It Gets Four Times Better ROI from Content than Ads,” Advertising Age,
September 10, 2014, http://adage.com/article/best-practices/kraft-content-drive-broader-marketing-
effort/294892/.
16
publicly announced that its marketing strategy to fulfill its 2020 sales goal is a transformation
from “creative excellence” to “content excellence.”
27
To make this transition, Coca Cola has
reshuffled its marketing function by enlisting former journalists and writers; “We're looking for
that journalism background for the team now and going forward,” said Ashley Brown, former
director of digital communication and social media.
28
Moreover, Coca Cola has revamped its
corporate website into a digital content hub called Journey; its design layout and content
organization resemble those of a typical online media outlet.
Journalistic storytelling is arguably a challenge for traditional marketers who are trained
and experienced in creating stories that impress rather than inform the audience. In contrast, a
firm grasp of news senses and storytelling is intrinsic to fundamental PR skills. As General Mills
CMO Mark Addicks said, “Now, we are really seeing PR and social media skills come to the
forefront. What is a great news story? What is a great way for us to develop relevant content
people can engage in? These questions are about relevancy and that has always been in the
wheelhouse of PR.”
29
Building Brands by Running Newsrooms
Brand images used to be created by wave-after-wave advertising campaigns, yet the
campaign development process, which requires a lengthy procedure of ideation, concept testing,
and production, is rendered ineffective for conversation marketing that demands real-time
response. In fact, the Future of Advertising Project by Warton School of Business has found a
27
Joe Pulizzi, “Coca-Cola Bets the Farm on Content Marketing: Content 2020,” Content
Marketing Institute, January 4, 2012, http://contentmarketinginstitute.com/2012/01/coca-cola-content-
marketing-20-20/.
28
Natalie Zmuda, “Solving the Content Creation Conundrum,” Advertising Age, January 14, 2013,
http://adage.com/article/news/marketers-solve-content-creation/239149/.
29
Chris Daniels, “Integrated Execution,” PRweek 16, no. 2 (02, 2013): 32-33,
http://search.proquest.com/docview/1542668084?accountid=14749.
17
consensus among industry leaders that the “campaign-based model of advertising, perfected over
decades of one-way mass media, is headed for extinction.”
30
As discussed in the previous
sections, marketers need to be in tune with customers’ conversation flows in order to get noticed
and leverage word-of-mouth advantage. Yet the imminent challenge faced by marketers is that
today’s digital-savvy, always-on consumers are fairly fickle and have very short attention spans.
Trends shift so fast in the digital age that by the time a traditional campaign launches, the
consumer insight discovered several months ago to support the campaign has already become
irrelevant. In order to capture and tap into buzz topics on the fly, forward-thinking brands like
General Mills, Coca Cola, and Red Bull have established newsrooms within their marketing
teams to constantly monitor the social sphere and develop fast-response content.
In addition to setting up physical newsrooms, marketers have also come to embrace a
newsroom mentality in their branding approaches. Ron Faris, former head of brand marketing at
Virgin Mobile USA, said, “You get more bang for your buck if you spend your money on good
copywriters and designers who have a newsroom sense of urgency than a huge, million-dollar
production.”
31
In 2009, research firm Forrester introduced the concept of “adaptive brand
marketing,”
32
an approach where marketers respond rapidly to address customer needs in a way
that fulfills branding objectives. This novel method has shown to be effective, at least for P&G,
who managed to ride the social chatter wave, securing the second most trending topic on Twitter
and galvanizing social sharing through the operation of “Tide Newsdesk.”
33
Unlike advertising
30
Baba Shetty and Jerry Wind, “Advertisers Should Act More like Newsrooms,” Harvard
Business Review, https://hbr.org/2013/02/advertisers-need-to-act-more-like-newsrooms.
31
Saya Weissman, “Being Real Time Takes Planning,” Digiday, February 6, 2013,
http://digiday.com/brands/being-real-time-takes-planning/.
32
Lisa Bradner, Christine Spivey Overby, and Jennifer Wise, “Adaptive Brand Marketing,”
Forrester, October 9, 2009, https://www.forrester.com/Adaptive+Brand+Marketing/fulltext/-/E-res55526.
18
campaigns that have start and end dates, marketing today is a nonstop battle—after all,
conversations happen 24/7 and wait for no one.
The imperative for brand marketers to be equipped with newsroom spirits is also driven
by the fact that consumers are hungry for constant flows of engaging and refreshing content. Just
like the news industry competes for first-break news and exclusive content, brands have to
constantly be on the hunt for original and exciting stories to inform and entertain their audience.
This creates a somewhat steep learning curve for marketers whose thought processes are deeply
ingrained in salesmanship. Conversely, the way public relations approaches marketing has always
been about uncovering the newsworthiness about aspects of the brands and building stories that
serve the benefits of readers and customers.
Chapter Two: Agencies Jumping on the Earned Media Bandwagon
As marketing undergoes the paradigm shift from buying to earning customer interests,
agencies built around traditional advertising are gradually reinventing themselves to remain
relevant. Earned media, the term historically used in the public relations industry to describe
media relations, where press coverage is achieved by pitching journalists to stories to be run in
media outlets as opposed to ad placements, has expanded to encompass online word-of-mouth in
the digital age. In as early as 2005, Ad Age ran a feature on how agencies were stepping up their
games to address marketers’ growing demand for word-of-mouth marketing. Not surprisingly, PR
agencies were at the forefront in such initiatives, and ad agency executives were quoted saying,
“This is more like PR” when explaining why they fell behind.
34
Faced with diminishing
33
Jack Neff, “How Marketing at P&G Takes Cues from an Election Campaign,” Advertising Age,
October 11, 2012, http://adage.com/article/special-report-ana-annual-meeting-2012/marketing-p-g-takes-
cues-election-campaign/237702/.
34
Matthew Creamer, “In Era of Consumer Control, Marketers Crave the Potency of Word-of-
Mouth,” Advertising Age, November 28, 2005, http://adage.com/article/news/era-consumer-control-
marketers-crave-potency-word-mouth/105364/.
19
advertising viewership, declining return on ad investment, and most importantly the unstoppable
trend of consumer control, agencies now have no choice but to expand into the earned media
territory once exclusively owned by the PR industry.
Mergers and Acquisitions of PR Firms
PR firms have become such popular acquisition targets for the advertising world that
Stuart Elliott, the highly respected and recently retired advertising and media columnist at The
New York Times, wrote a piece in 2010 titled “Growing Appreciation for P.R. on Madison
Avenue.” Elliott opined that MDC Partners’ acquisition of PR firm Kwittken & Company, the
third consecutive deal of its kind after the holding company purchased majority shares in Sloan &
Company and Allison & Partners, was “at it again,” an indication that marketers were recognizing
PR’s power to engage consumers.
35
Similarly in 2013, Ad Age ran a feature titled “PR Acquisitions are Red Hot,” reporting
how independent PR firms have become popular targets because of the growing value in owned
and earned media.
36
According to subject matter experts, such acquisition activities used to be
dominated by holding companies, but buyers these days are more diverse as marketing service
providers look to diversify their portfolios with PR offerings. For instance, Tim Andree,
executive chairman of the Dentsu Aegis Network, explained the rationale behind the group’s
acquisition of private PR firm Mitchell Communications: “Our clients have been asking for PR
and strategic communications and capabilities and we haven't been able to provide it.”
37
Likewise, independent advertising firm Olson acquired Chicago-based PR firm Dig
35
Stuart Elliot, “Growing Appreciation for P.R. on Madison Avenue,” The New York Times,
September 8, 2010, http://www.nytimes.com/2010/09/09/business/media/09adco.html?_r=0.
36
Alexandra Bruell, “PR Acquisitions Are Red Hot—Who Could Be Next?,” Advertising Age,
January 22, 2013, http://adage.com/article/media/pr-acquisitions-red-hot/239291/.
37
Ibid.
20
Communications in a bid to “build the agency of the future,” which will see PR driving 20% of
its overall revenue.
38
When asked what non-PR agencies have done so far to obtain PR capabilities, Alexandra
Bruell, lead agency reporter at Ad Age and one of the interviewees for this paper, observed that
the primary method is through “a lot of M&A activities.”
39
Though surveys about the extent of
such M&A moves are not yet available, Bruell’s observation and the press coverage so far
suggest that acquiring PR firms is indeed a noticeable trend among the advertising world.
New Approach and Thinking to Campaign Development
The first and most prevalent change brought about by earned media’s increasing
importance can be seen in the way campaign objectives are defined and results are measured.
Traditional metrics like impressions, cost-per-thousand, and cost-per-click have increasingly been
replaced by social sharing metrics like retweets, shares, and brand mentions. Acclaimed
advertising campaigns of recent years almost all heavily index on social measures; major awards
in the ad industry, including Cannes, have all defined advertising effectiveness by campaigns’
social influence. The new catchphrase in advertising is that “an idea that doesn't generate more
content isn't a very good idea,”
40
said Edward Boches, former chief creative officer at Mullen,
who started his career in public relations. Therefore, the pursuit for creative prowess in campaign
planning is being gradually eclipsed by the need for generating earned media.
Yet the change has created enormous pressure for creative personnel—“This is the first
time where creative directors themselves feel like their personal necks are on the line as far as
38
Ibid.
39
Alexandra Bruell, interview by Ran Xu, December 18, 2014, appendix of industry interviews.
40
Brian Morrissey, “Traditional Ads Yield Social Traction,” Adweek, May 17, 2010,
http://www.adweek.com/news/technology/traditional-ads-yield-social-traction-102346?page=2
21
distribution,” commented Dan Greenberg, CEO of video distribution firm Sharethrough.
41
It is
thus not surprising to find that many PR agencies have been called on to help creative agencies
build campaigns’ social traction. For instance, Edelman won the 2014 Cannes Grand Prix award
because it was responsible for the earned media amplification portion of the winning campaign—
Chipotle’s Scarecrow.
42
While some agencies have complemented their lack of earned media skills by partnering
with outside PR agencies, more progressive organizations have internalized this new capability
by upgrading their business approaches and operations. “Earned media for traditional campaigns
is a key component of every conversation with every client,” said Brian Stoller, managing
director of digital strategy at Mindshare North America. “I can't stress enough how huge this area
has become for us.”
43
For edgy, creative shops, shareability and virality have become deeply
ingrained in their creative thinking. At Crispin Porter + Bogusky, for instance, they “look at
earned media as the second part of [their] media plan,” said Bryant King, VP and director of
message planning. “If all we did was our paid media, we've failed.”
44
In order to fully integrate earned media into the campaign planning process, instead of it
being an add-on or an afterthought, advertising professionals need to start building PR thinking
into their mindsets. This has led Jeff Sweat, communications director at 72andSunny and one of
the interviewees for this paper, to give a talk named “Everything You Do Is PR: 7 Rules for
Today's PR Driven World” at one of the events hosted by American Marketing Association’s Los
Angeles chapter. Sweat offered a profoundly simple definition of PR for attendees, who were
41
Michael Learmonth, “Beyond TV, Marketers Look to ‘Earn’ Love for Video Ads,” Advertising
Age, May 16, 2011, http://adage.com/article/digital/tv-marketers-earn-love-video-ads/227513/.
42
Richard Edelman, “The Cannes Lion for PR Is Home at Last,” Edelman, June 16, 2014,
http://www.edelman.com/p/6-a-m/cannes-lion-pr-home-last/.
43
Morrissey, “Ads Yield Social.”
44
Ibid.
22
mostly marketing professionals—“Get people to talk good things about you.”
45
Though this
somewhat superficial explanation would undoubtedly raise some PR-professional eyebrows, it
speaks to the desire in the ad world to learn from public relations. In Sweat’s former role as VP of
communications at Deutsch LA, he counseled clients such as Activision and CKE Restaurants on
campaign PR strategies. However, full integration of earned media is a work in progress, and the
goal for Sweat is that “ideally, we as communications people at ad agencies will be a part of the
conversations from the start.”
46
This brings us to the next section’s discussions about the role of
agencies’ in-house PR or earned media departments.
In-House Earned Media Capabilities
Back in the “Mad Men” era, major advertising agencies were one-stop shops that housed
media, public relations, production, and essentially every other part of marketing services. This
legacy structure still exists today in big advertising firms where one would find public relations
functions ranging from a communications unit to a single dedicated PR director. However, these
departments generally do not actually perform public relations activities for agency clients; their
primary role is corporate communications for the agency itself in the areas of trade press relations,
industry awards, etc. As Hank Wasiak, former chairman of McCann Erikson and one of the
interviewees, put it, “They don’t really do anything.”
47
As discussed in the previous section, some
PR personnel at ad agencies like Jeff Sweat’s team at 72andSunny have taken on a new role in
contributing earned media strategies. The question remains: is this a common trend among ad
agencies that have PR functions?
The 4A’s Client Public Relations Survey seems to offer some answers. Since 2004, the
45
Jeff Sweat, “Everything You Do Is PR: 7 Rules for Today's PR Driven World” (presentation,
AMA Los Angeles, Santa Monica, CA, August, 27, 2014).
46
Ibid.
47
Hank Wasiak, interview by Ran Xu, October 20, 2014, appendix of industry interviews.
23
4A’s Client Public Relations Committee has been conducting this quadrennial survey among over
100 of its agencies with the goal of “improving understanding and appreciation of the value of
public relations among agency peers and clients to enhancing the seamless integration of PR as a
core strategic discipline.”
48
The survey asks about the number of agencies offering PR services,
revenue attribution of these PR offerings, integration of the PR department within the agency, and
the impact of social media business. According to the most recent 2012 survey, a surprising 98%
of agencies say their PR team members are “always or sometimes involved in the development of
general marketing campaign strategy.”
49
What’s not surprising is that when it comes to social
media, PR is the most likely department to be involved and lead clients’ social media
assignments.
50
However, social mentions and sharings about ad campaigns themselves is generally quite
different, in content and intent, from general word of mouth about the brand and the products
featured in those advertisements. As marketers increasingly demand solid PR skills like securing
third-party endorsements and consumer advocacy, have ad agencies modernized their PR
departments to live up to the new challenges? Amidst the trend of ad agencies going back to the
full-service model, which will be discussed later in chapter five, big names like BBH and Droga5
have expanded their PR offerings. According to Ad Week, Droga5 extended service offerings into
areas of analytics, public relations, and strategic consulting to scale their growing business.
51
In
fact, BBH strategy director Ben Shaw once said that the reintegration of marketing service
48
Greg Stewart, “4A’s Client Public Relations Survey” (4A’s Members-Only Content, American
Association of Advertising Agencies, 2013), 1.
49
Ibid., 4.
50
Ibid., 2.
51
Gabriel Beltrone, “Droga’s Delicious World,” Adweek, December 10, 2012,
http://www.adweek.com/news/advertising-branding/drogas-delicious-world-145813.
24
offerings under the same roof relies on the addition of public relations.
52
Intriguingly, Ad Age has
reported that BBH added PR capabilities after winning the Rubbermaid account, for which the
agency is in charge of creative, media, and—counterintuitively—PR.
53
Talent Recruitment/Training
The growing importance of earned media is creating a plethora of new agency positions
dedicated to social engagement. These titles range from VP of Emerging Media or Director of
Social Strategy to, most notably, Earned Media Director. In his opinion piece “Why Every
Agency Needs an Earned Media Director” in Ad Age,
54
Dan Greenberg, CEO of Sharethrough,
discussed how earned media directors are increasingly being hired to help media agencies pick
the best platforms for content distribution and to help creative agencies instill social elements
throughout the campaign process. In terms of their specific job functions, Craig Batzofin, former
earned media director and executive producer of Evolution Bureau—the agency that created the
viral “tweet with mittens” stunt during the 2014 Super Bowl for client JCPenney—was quoted
saying, “It's about strategically planning and executing integrated brand content programs that
seamlessly tie together shareable content, PR, and paid media to get our content seen and
socialized.”
55
For digital agencies that originated in website building and later expanded into online
advertising and creative developments, one approach to bridging the earned media skill gap is to
hire outside experts. Though there are no surveys available to back up this trend on a quantitative
52
“Has Advertising Come Full Circle?,” Little Black Book, accessed December 12, 2014,
http://lbbonline.com/news/has-advertising-come-full-circle/.
53
Shareen Pathak, “Agencies Adapt as Work Goes from ‘Tentpoles to Tadpoles,’” Advertising
Age, http://adage.com/article/digital/agencies-adapt-work-tentpoles-tadpoles/292890/.
54
Dan Greenberg, “Why Every Agency Needs an Earned Media Director,” Advertising Age,
November 23, 2011, http://adage.com/article/digitalnext/agency-earned-media-director/231182/.
55
Ibid.
25
level, Ad Week ran a feature article in 2010 titled “Digital Dips Toes into PR Waters.” According
to the author, digital shops like The Barbarian Group, EVB, and Mekanism are “hiring PR
veterans in an effort to establish primacy in the fast-growing but unsettled area of social media.”
56
Not only are these earned media specialists called in to help make campaigns go viral, they are
also tasked with new service areas like influencer marketing. Razorfish, for instance, has tapped
Cristina Lawrence, former senior vice president of Digital at FleishmanHillard, and other
professionals with similar backgrounds to staff the firm’s social media team covering blogger
relations and community management.
57
This hiring trend has been experienced first-hand by PR
firm Shift Communications; President Todd Defren acknowledged that the digital shops which
had been outsourcing Shift for PR services were beginning to bring PR in-house by hiring their
own talents.
58
As discussed in chapter one, harnessing earned media requires brands to become like
publishers, producing informing and entertaining content. Therefore it comes as no surprise that
former journalists and writers are finding new opportunities in the advertising world. According
to Amy Hoover, president of recruiting firm Talent Zoo, positions like “content marketer” or
“content manager”—those often filled by journalists—are the trendiest titles in the advertising
industry right now.
59
This has posed an existential threat to traditional copywriters, who make a
living out of creating advertising tag lines. Alan Schulman, VP of global digital marking & brand
content at SapientNitro, raised his concern about the relevancy of copywriters: “As we move
56
Brian Morrissey, “Digital Dips Toes into PR Waters,” Adweek, May 24, 2010,
http://www.adweek.com/news/technology/digital-dips-toes-pr-waters-102438.
57
Ibid.
58
Scott Van Camp, “Want Digital? Choice Between PR Agency and Pure-Play Digital Shop Is
Anything But Clear,” PR News Online, June 12, 2012, http://www.prnewsonline.com/featured/2012/06/18/
want-digital-choice-between-pr-agency-and-pure-play-digital-shop-is-anything-but-clear/.
59
Nathalie Tadena, “Agencies Model Newsrooms for Real-Time Marketing,” The Wall Street
Journal, April 16, 2014, http://blogs.wsj.com/cmo/2014/04/16/agencies-model-newsrooms-for-real-time-
marketing/.
26
toward writing more native types of advertising, copywriters will need to understand how to place
their copy within the context of news feeds and make that copy more journalistic; hiring
copywriters out of portfolio school who don’t have a journalistic background would give us
pause.”
60
Particularly for agencies that are building “newsrooms” for clients, a trend that will be
discussed in chapter three, a journalist’s deep-rooted news sense and ability to write fast-response
stories are extremely valuable. “We know as journalists that we can teach to the advertising
agencies the need to move that much faster,” says Caitlin Francke, a former journalist who
transformed into senior vice president and director of social strategy at Publicis Kaplan Thaler.
61
For other agencies, the solution is to invest in training existing copywriters rather than
making new hires—“We want to train our teams to think more like an editorial newsroom,”
62
said
Atit Shah, executive creative director at DigitasLBi New York. According to Shira Bogart, group
creative director at AKQA’s San Francisco Office, “Many agencies will pay for classes that teach
short-story techniques, character development and editorial writing to expand the role of
copywriters.”
63
In AKQA’s case, outside specialists are invited to hold workshops, mentor
programs, and writing practices to help staff develop competency in penning longer-form content.
For the more ambitious 360i, training has extended beyond copywriters to include all staff who
do not possess a journalism background so that everyone can be equipped with basic news
principles.
64
60
Karen Grimaldos, “Five Tips for Copywriters Who Want to Stay Relevant,” Digiday,
http://digiday.com/agencies/tips-copywriters-journalism/.
61
Tadena, “Agencies Model Newsrooms.”
62
Ricardo Bilton, “In Content-Marketing Era, Agencies Tap Publishers For Expertise,” Digiday,
July 3, 2014, http://digiday.com/agencies/buzzfeed-digitaslbi/.
63
Grimaldos, “Five Tips for Copywriters.”
64
Tadena, “Agencies Model Newsrooms.”
27
Chapter Three: Deep Dive into the Agency Land Grab
The world of marketing services agencies used to have clearly delineated boundaries set
by different disciplines—brand creative, media planning and buying, PR, direct marketing,
design, and so on. Though the categorizations still exist, they can no longer accurately capture the
offerings of agencies who have transformed in the digital and social era. As marketers’ demand
for digital marketing grows, different types of agencies have actively begun to provide classic
digital services, like site building and app development, as well as digital marketing activities like
online advertising and social media. In 2013, digital work accounted for 35.3% of US ad agency
revenue, up from 32.5% in 2012, according to Ad Age DataCenter.
65
Agencies’ digital
conversions have given rise to the increasing disappearance of agency service boundaries, as
everyone is vying for the same piece of pie.
Some PR agencies were quick to recognize the opportunities in social media, content
marketing, and influencer relations that spoke to their natural strengths. By proactively enhancing
their digital capabilities and modernizing their service offerings, PR agencies hope to secure
leading positions in these new fields of growth. However, borrowing the words of Richard
Edelman, “public relations has the power to build genuine trust between a company and its
customers. It can mend wounded brands and help them establish legitimate, honest credibility.
Unfortunately, PR professionals aren’t the only ones offering answers.”
66
Advertising firms,
media agencies, digital shops, and boutique social media and content marketing agencies are all
vying for the same businesses. Though Sir Martin Sorrell, CEO of WPP Group, has spoken the
65
Bradley Johnson, “Revenue, Staffing, Stocks and Digital Show Growth for Agencies in 2014
Report,” Advertising Age, April 27, 2014, http://adage.com/article/agency-news/2014-agency-report-
revenue-staffing-stocks-digital/292849/.
66
Jason Woodward, “Richard Edelman: Public Relations Must Evolve, Or Get Left Behind,” The
Public Relations Society of America, July 1, 2011, http://www.prsa.org/Intelligence/Tactics/Articles/view/
9262/1032/Richard_Edelman_Public_relations_must_evolve_or_ge#.VP6M0Z3F-Wn.
28
truth that “ad agencies do say they can do this stuff, but they can’t,”
67
the reality is that PR firms
have not yet staged a clear win. According to 2010 US Interactive Marketing Online Executive
Panel Survey, PR agencies achieve barely one-fourth of the digital marketing pie,
68
and “nearly
one out of three [clients] is working with a PR agency specifically for social media.”
69
Agencies
surveyed in the 2014 World PR Report by the Holmes Report have expressed the pressure they
face—more than a quarter of them cited competition from other marketing disciplines, a figure
which has steadily increased since 2012, as a major obstacle to growth.
70
This chapter will
explore how different agencies are performing in the spaces of social media, content marketing,
and influencer marketing—areas where PR professionals possess natural advantages.
Social Media
PR agencies claim to have been the early birds in the social media game. According to
private investment firm Veronis Suhler Stevenson (VSS), which has been publishing the US
Communications Industry Forecast for more than 25 years, fastest growth during the 2011–15
period is expected to be in the Public Relations and Word-of-Mouth Marketing segments.
71
John
Suhler, co-founder and president of VSS, attributed this boom to clients’ increasing demand for
social media.
72
Similarly, the 2014 Agency Report by Ad Age concludes that staffing at PR
67
Rogers, “Martin Sorrell on PR.”
68
Sean Corcoran, “How to Optimize Your Interactive Agency Roster,” Forrester, May 27, 2011,
https://www-forrester com.libproxy.usc.edu/How+To+Optimize+Your+Interactive+Agency+Roster/
fulltext/-/E-RES58796.
69
Sean Corcoran, “When to Hire a Social Media Boutique Agency,” Forrester, November 14,
2011, https://www-forrester-com.libproxy.usc.edu/When+To+Hire+A+Social+Media+Boutique+Agency/
fulltext/-/E-RES60282.
70
“Talent Top Challenge as Digital and Tech Drive Growth,” Holmes Report, last modified July
15, 2014, http://worldreport.holmesreport.com/opportunities-challenges#sthash.RJdnbl8X.dpuf.
71
“New VSS Forecast Mid-Term Update,” Veronis Suhler Stevenson, last modified April 12, 2012,
http://www.vss.com/NewsDetails.aspx?ID=266.
29
agencies across the US is “on track to break a record,” which shows that the discipline is
vehemently “finding new revenue and growth through social media.”
73
“More and more it's being taken for granted by marketers that social media and digital
falls in the PR space,”
74
said Harris Diamond, former CEO of Interpublic’s Constituency
Management Group (which houses Interpublic's PR agencies, including Weber Shandwick, Golin
Harris, and MWW Group) and now CEO of Interpublic’s lead advertising agency, McCann
Worldgroup. Diamond’s remarks might seem a bit self-righteous—a simple glance through recent
account win news would provide the much bigger picture that creative, digital, and boutique
social media agencies are also handling social media works. Indeed, each discipline does have its
own unique skillset to bring to the social media table. Social media can be as simple as setting up
a Facebook page and sending out posts, but sophisticated social media marketing entails a whole
range of capabilities including audience insights, creative development, real-time response, social
media advertising, and more.
For media planning and buying agencies, social is considered a part of the integrated
media mix. “Media agencies are best positioned to be the social quarterback,” Ben Winkler, chief
digital officer at media agency OMD, said. “We have the consumer-insight data that the other
groups do not have. In the end, the part that’s most compelling is that by having social strategy
integrated into media strategy, you’re amplifying all of your media.”
75
As social media
advertising is increasingly utilized in large-scale campaigns to reach granularly targeted
72
Michael Bush, “How Social Media Is Helping Public-Relations Sector Not Just Survive, but
Thrive,” Advertising Age, August 23, 2010, http://adage.com/article/news/social-media-helping-public-
relations-sector-thrive/145507/.
73
Johnson, “Revenue, Staffing, Stocks and Digital.”
74
Bush, “How Social Media Is Helping.”
75
John McDermott, “#Shotsfired: The Agency Land Grab for Social Budgets,” Digiday, March 19,
2014, http://digiday.com/agencies/social-media-strife-agency-landgrab-social/.
30
audiences, media agencies’ innate abilities in analytics-driven planning and buying could prove
more valuable. Social media is arguably one of the fastest-growing segments of the online ad
market; according to data analysis from eMarketer, social media advertising spending on display
ads alone is expected to rise 18% this year to $3.3 billion.
76
However, media agencies might be
facing a perception issue. As expressed by Maxus global CEO Lindsay Pattison, “There’s nothing
I hate more than a client referring to us as media buyers. Media agencies now plan really
intensively with huge amounts of authoritative insights and huge amounts of data that help us
plan our campaigns and track our consumers and audience better, execute and optimize.”
77
Most media agencies are still primarily tasked with social media tracking and
performance measurement, while more aggressive agencies like VivaKi and Universal McCann
have been highlighted on the Wall Street Journal for their moves to launch dedicated social
media units that also cover campaign developments.
78
According to Bant Breen—former
president of Worldwide Digital Communications at Initiative who launched its social media
division, Prophesee, in 2010—the creation of full-blown social media units is a natural evolution
from media agencies’ research and analytics capabilities. “Over time the value of that information
has increased. . . . And it impacts very quickly on specific messages that should or shouldn't be
highlighted and on other elements like choice of celebrities for ads, appropriate channels and
even how companies should handle certain customer services.”
79
As media channels and
76
“US Social Media Ad Spending, by Type, 2014-2019,” eMarketer, accessed December 5, 2014,
http://totalaccess.emarketer.com.libproxy.usc.edu/Chart.aspx?dsNav=Nr:P_ID:162242.
77
Jessica Davies, “Havas Media and Maxus Chiefs Debate Why Media Agencies Have A
‘Perception Problem’ And Why Programmatic Marketing Triggers Advertiser Paranoia,” The Drum,
August 4, 2014, http://www.thedrum.com/news/2014/08/04/havas-media-and-maxus-chiefs-debate-why-
media-agencies-have-perception-problem-and.
78
Suzanne Vranica, “Social Media Draws a Crowd,” The Wall Street Journal, July 18, 2010,
http://www.wsj.com/articles/SB10001424052748703722804575369132582357888.
79
Steve Mcclellan, “Initiative Looks Ahead with Prophesee,” Adweek, February 8, 2010,
http://www.adweek.com/news/television/initiative-looks-ahead-prophesee-101527.
31
consumer touch points continue to evolve and fragment, Marshall McLuhan’s idea that the
“medium is the message” seems to be more relevant than ever for brand marketers trying to target
the right audience at the right time via the right platforms. That’s why discussions about bringing
media back into creative shops, where media planning and buying agencies traditionally spun off,
and fostering stronger collaboration between the two have been cropping up in the advertising
sphere.
For advertising agencies that have long been the brand creative lead, social media is an
extended arena for campaign rollout. In order to maintain the consistency of brand message,
marketers demand consistent and coherent brand messages, visuals, and tonality across all
platforms and channels where they have exposure. This results in the organic outcome of creative
agencies who help define the central brand strategy cross-selling ancillary social media services.
For instance, UGG expanded its cooperation with M&C Saatchi to include community
management after having been pleased with their creative work for two years.
80
Given the
public’s insatiable craving for social media stories told through pictures and videos rather than
text, the unparalleled creative aptitude of advertising agencies proves valuable. FCB Worldwide
CEO Carter Murray once remarked, “The volume of creative work in social media that clients
want produced these days is much greater than the volume of content designed for television.”
81
According to Forrester’s August 2011 North American Agency Landscape Online Survey, 86%
of the 98 agency respondents were hired to perform digital creative as well as social strategy and
execution.
82
Following this logic, it might not be surprising that the Social Media Survey jointly
80
“M&C Saatchi LA Wins UGG Australia Global Social Media Business,” Business Wire, last
modified April 21, 2014, http://www.businesswire.com/news/home/20140421005176/en/MC-Saatchi-LA-
Wins-UGG-Australia-Global#.VP6qN53F-Wk.
81
Pathak, “Agencies Adapt.”
82
Chris Stutzman, “The Digitization Of All Agencies,” Forrester, January 10, 2012, https://www-
forrester-com.libproxy.usc.edu/The+Digitization+Of+All+Agencies/quickscan/-/E-res60321.
32
conducted by MSL Group and PRWeek found that when clients search for social media partners,
more think of ad agencies than they do PR or media agencies.
83
Ad agencies might not be well equipped to handle the day-to-day community
management on social media, but they surely have a place in developing social media-centric
campaigns or online commercials. As mentioned in chapter two, progressive advertising shops
have proactively adapted their creative processes to address the unique challenges of running
campaigns on social media. Take Wieden + Kennedy, the wildly acclaimed agency in the social
era; their team of copywriters, producers, and social strategists were able to glean actionable
audience insights in real time and turn them into the most viral Old Spice series yet, and this was
all achieved with a turnaround time of less than 24 hours for each video.
84
Agencies of all sizes
have been following W+K’s footsteps by sharpening their creative acuteness in hopes of creating
the next viral hit, but more aggressive agencies are not satisfied with owning just the creative
campaign portion of the pie. McCann Erikson, one of the biggest advertising agency networks in
the world, has caught national attention by launching a dedicated social media division called
McCann Always On that also covers community management.
85
Then there are boutique social media agencies that strive to benefit from the very fact that
social media does not belong to any discipline. For shops that have genuine expertise in social
media, their highly specialized skills and nimble structures can be very desirable for clients. For
instance, Domino's Pizza Inc. enlisted New Media Strategies, a word-of-mouth marketing firm, as
83
“Marketers Listening More to Social Media, but Taking Little Action,” MSL Group, accessed
November 15, 2014, http://mslgroup.com/news/2010/20100914-marketers-are-listening-more-to-social-
media.aspx.
84
Brian Morrissey, “How Old Spice Ruled the Real-Time Web,” Adweek, July 14, 2010,
http://www.adweek.com/news/technology/how-old-spice-ruled-real-time-web-102823?page=1.
85
Stuart Elliott, “A Top Agency Expands Its Social Footprint,” The New York Times, March 26,
2013, http://www.nytimes.com/2013/03/27/business/media/mccann-always-on-renames-and-expands-
agencys-social-media-unit.html?_r=2&.
33
its agency of record for social media.
86
When explaining why they chose a boutique firm over
bigger agencies, Chris Brandon, a spokesman for the pizza chain, said, “A lot of companies right
now that specialize in PR or advertising are trying to do this on the side and the thing we liked in
NMS is they specialize in social media.”
87
However, social agencies in general are often lamented for their lack of perspective
beyond the social aspect as well as their scale and resources, not to mention the imminent danger
of being subsumed by a larger firm that’s ramping up its social capabilities. As Aki Spicer,
director of digital planning and content strategy at TBWA\Chiat\Day, commented, “A couple
years ago, it was a bit of a meme amongst clients to have a social agency with a funny name.
Social agencies have been disintermediated from the conversation pretty quickly in general.”
88
To
exacerbate the situation, trade publications and industry analysts have observed the demise of the
“social media agency of record.” Nonetheless, Jeremy Owyang, social media analyst at the
research firm Altimeter Group, has offered an interesting perspective based on social agencies’
future. Whether marketers choose to work with a social agency or not depends on how
experienced they are with social media themselves: the better-versed ones tend to work with
boutiques, while amateurs would depend on ad or PR agencies to help guide the way.
89
The practice of social media is still up for grabs, and many types of organizations can
find a plausible argument for at least partial ownership. Though Boston Consulting Group has
advised marketers to choose PR agencies because “these agencies are skilled at crafting messages
for public consumption, responding to outside inquiries, protecting a brand’s reputation, and
86
Vranica, “Social Media Draws a Crowd.”
87
Ibid.
88
McDermott, “Agency Land Grab for Social Budgets.”
89
Jeremiah Owyang, “Trend: How Social Media Boutiques are Winning Deals Over Traditional
Digital Agencies,” Web-Strategist, December 21, 2010, http://www.web-strategist.com/blog/2010/
12/21/trend-how-social-media-boutiques-are-winning-deals-over-traditional-digital-agencies/.
34
avoiding legal risks,”
90
social media entails much more than “crafting messages.” Sean Corcoran,
Marketing Analyst at Forrester, has perfectly summed up the situation, which he believes will
continue: “While many different types of agencies are still battling for the overall strategy, many
are now falling into place in their core skill sets—PR agencies tend to manage word of mouth and
crises, interactive agencies tend to build strategy and applications, traditional creative and media
agencies leverage social to complement campaigns, etc.”
91
His observation is echoed by Alexandra Bruell, Ad Age agency reporter and one of the
interviewees, who added that direct competition among agencies is actually in specific areas of
social media, such as real-time analytics, content creation, and social media advertising.
92
Clients
also bring different factors to the table that may explain why different types of agencies are
partaking in different shares of social media. Social media is still a pretty novel marketing
discipline, and marketers are figuring out their own distinctive ways of incorporating social into
their overall marketing plan. Therefore, approaches to social media have natural variances, as put
by Rob Norman, global chief digital officer at GroupM: “Social media strategy depends on what
they mean by it.”
93
It shouldn’t be overlooked that marketers have a tendency to work with
multiple agencies who can help navigate the whole spectrum of social media by contributing their
unique skillsets.
Influencer Marketing
Social media is undoubtedly a powerful tool for brands to build direct conversations with
90
Ed Busby et al., “The CMO’s Imperative,” 27.
91
Sean Corcoran, “2011 Agency Predictions,” Forrester, January 24, 2011,
http://blogs.forrester.com/sean_corcoran/11-01-24-2011_agency_predictions.
92
Alexandra Bruell, interview by Ran Xu, December 18, 2014, appendix of industry interviews.
93
Steve Mcclellan, “VivaKi Looks to Create New Unit,” Adweek, September 12, 2010,
http://www.adweek.com/news/television/vivaki-looks-create-new-unit-103267?page=2.
35
millions of consumers in the online space, yet trying to target and influence each and every one of
those consumers would be an arduous task. That’s why more and more marketers are turning to
online influencers—the lead voices behind social chatters. According to Forrester’s Peer
Influencer Analysis, people in the US generate 500 billion online impressions regarding products
and services, and 80% of these impressions are from 16% of the online consumers.
94
Social media
has not only made each individual a medium, but has also created hundreds of Internet celebrities
whose online followings rival that of popular media outlets. As such, investing in influencer
marketing could yield much better return on investment than traditional paid media, as consumers
increasingly look to thought leaders for entertaining content and earnest advice. According to
Technorati’s 2013 Digital Influence Report, 65% of brands have incorporated influencers into
their marketing strategies to help execute broader marketing programs.
95
Data from Augure
shows that 76% of brands use influencer strategies to impact product launch, 57% to help
amplifying custom content, and 50% to promote webinars.
96
Identifying, building relationships with, and brokering cooperation with influencers fit
squarely into the PR realm of expertise. More than 6,000 social media influencers surveyed by
Technorati have revealed that their brand partnership opportunities come primarily from PR
agencies’ outreach.
97
However, the fact that today’s influencers are no longer limited to
professional journalists means that they can be reached by anyone. Len Kendall, director of social
marketing at Havas Worldwide, once remarked: “Media agencies really need to extend in to
94
Josh Bernoff and Augie Ray, “Peer Influence Analysis – A Social Computing Report,”
Forrester, April 20, 2010, https://www.forrester.com/Peer+Influence+Analysis/fulltext/-/E-
RES56766?docid=56766.
95
“2013 Digital Influence Report,” Technorati, accessed October 15, 2014,
http://technorati.com/wp-content/uploads/2013/06/tm2013DIR1.pdf.
96
“The 2014 Influencer Marketing Status Report,” Augure, February 26, 2014,
http://www.augure.com/wp-content/uploads/2014/02/Influencers-marketing-Report-2014-Augure.pdf.
97
“2013 Digital Influence Report,” Technorati.
36
influencer marketing and consider influencers as another marketing channel—almost as if they
were to liken themselves to PR shops. Then the point of differentiation will be which media
agency has the best relationships.”
98
For advertising agencies, influencer marketing is about
leveraging online influencers to help launch campaigns and spread the word among their fans.
Apart from crafting influencer marketing campaigns for clients, another area of agency
competition is the development of proprietary tools for influencer targeting and database
management. Novel social networks and platforms are mushrooming at an unfathomable speed,
and it’s increasingly bewildering to tease out legitimate influencers and profile the interests of
their respective fan groups. That’s why agencies are standing on the shoulders of advanced
technology to help automate and scale their influencer strategies. Major PR firms like Edelman,
99
Waggener Edstrom,
100
and MS&L
101
have all established their respective methodologies in
accurately measuring the influence of online personalities across various channels. Mid-sized
firms like Hotwire PR
102
and Cone Communications
103
have also joined the game. For digital
agencies that have deep-rooted expertise in technology innovation, influencer marketing is about
98
Andy Plesser, “(VIDEO) How Media Agencies Will Be Forced to Change,” Huffington Post,
November 3, 2014, http://www.huffingtonpost.com/andy-plesser/video-how-media-
agencies_b_6095646.html.
99
“Edelman Launches BlogLevel and TweetLevel Tools for Navigating Influence,” Edelman, July
14, 2011, http://www.edelman.com/news/edelman-launches-bloglevel-and-tweetlevel-tools-for-navigating-
influence/.
100
“Wagg Ed Launches Social Media Measurement System,” Holmes Report, May 14, 2011,
http://www.holmesreport.com/sponsored/article/2011/05/14/wagg-ed-launches-social-media-measurement-
system.
101
“MSLGROUP Pilots Influencer Relationship Management Product in North America,” MSL
Group, March 13, 2013, http://mslgroup.com/news/2013/20130313-sxsw-irm.aspx.
102
Patrick Coffee, “Data Is the Future of PR: Why We Built the ‘Listening Post’ Influencer
Analytics Platform,” PRNewser, May 12, 2013, http://www.adweek.com/prnewser/data-is-the-future-of-pr-
why-we-built-the-listening-post-influencer-analytics-platform/60769.
103
“Cone Communications Launches New Influencer Identification Platform,” PR Newswire,
August 7, 2013, http://www.prnewswire.com/news-releases/cone-communications-launches-new-
influencer-identification-platform-218704931.html.
37
creating revolutionary platforms that help brands beat the curve. 360i, for instance, has created an
influencer management system called 360iRMS
TM
that purportedly aggregates profiles of 10,000
influencers and crawls their social content in real time.
104
The success of influencer marketing networks—including the likes of Speakr, Instabrand,
and HelloSociety—is perhaps the most prominent phenomenon. Somewhat like talent agencies,
these networks scout for and contract online celebrities who are then paired with brands based on
these personalities’ interests, social followings, and fit with the brand image. These social media
influencers then receive commissions based on the blog posts, pictures, and other types of content
they create for the brand and related products. The popularity of such networks lies not only in
the fact that marketers can reach thousands if not millions of consumers without actually buying
media, it also points to a trend that’s shaping content marketing—brands are increasingly utilizing
user-generated and co-created content. As put by Chris Perry, president of digital at Weber
Shandwick, “This new landscape demands understanding and building relationships with highly
influential creative sources, giving them access to production and storytelling opportunities that
they can capture and share in their own authentic way.”
105
Though it seems that technology companies are gaining relevance by developing
platforms and software that help marketers manage influencer rosters and automate content
production, PR agencies are still in the lead when it comes to influencer campaigns. Nick Hayes,
founder and principal of Influencer50 Inc. and chair of the 1000-member LinkedIn influencer
marketing group, has written about his observations that vendors mostly outsource influencer
104
“360i Launches Influencer Marketing Technology to Fuel Next Generation of Online PR,” 360i,
April 15, 2013, http://www.360i.com/about/press/360i-launches-influencer-marketing-technology-fuel-
generation-online/.
105
“Weber Shandwick Partners with Niche to Engage World's Leading Social Content Creators,”
PR Newswire, November 13, 2014, http://www.prnewswire.com/news-releases/weber-shandwick-partners-
with-niche-to-engage-worlds-leading-social-content-creators-282604691.html.
38
marketing programs to PR agencies.
106
As put by Laurent Faracci, CMO of Reckitt Benckiser,
public relations provides great opportunities for brands to find and engage with brand
evangelists.
107
Weber Shandwick, as reported by The Wall Street Journal, enlists online
influencers in about one-fifth of its PR campaigns, and influencer programs are growing fastest
for their CPG clients.
108
By building in-house systems or partnering with innovative technology
providers, PR agencies are poised to reap more benefits from the growing influencer marketing
share.
Content Marketing
Content marketing is perhaps the hottest marketing topic in recent years and is largely
driven by brands that yield control to consumers. Seth Godin, marketing futurist and thought
leader, envisioned back in 2008 that “content marketing is the all the marketing that’s left.”
109
As
defined by Joe Pulizzi, one of the first contenders for content marketing and the founder of
Content Marketing Institute, “The purpose of content marketing is to attract and retain customers
by consistently creating and curating relevant and valuable content with the intention of changing
or enhancing consumer behavior.”
110
However, content marketing is highly resource consuming
and demands multidisciplinary skills: not only does it require the creation of a variety of content
106
Nick Hayes, “Why Are Vendors’ Influencer Marketing Programs So Often Farmed Out To
Their PR Companies?,” The Buyers-Side Journey (blog), May 9, 2014, http://thebuyersidejourney.com/
2014/05/09/why-are-vendors-influencer-marketing-programs-so-often-farmed-out-to-their-pr-companies/.
107
Lindsay Stein, “CMO Q&A: Laurent Faracci, Reckitt Benckiser,” PRWeek, June 1, 2013,
http://www.prweek.com/article/1275606/cmo-q-a-laurent-faracci-reckitt-benckiser.
108
Nathalie Tadena, “Weber Shandwick Partners with Niche to Tap Social Media Celebrities,”
The Wall Street Journal, November 13, 2014, http://blogs.wsj.com/cmo/2014/11/13/weber-shandwick-
partners-with-niche-to-tap-social-media-celebrities/.
109
Joe Pulizzi, “Seth Godin: ‘Content Marketing is the Only Marketing Left’ and Ten New
Marketing Lessons,” Content Marketing Institute, January 14, 2008,
http://contentmarketinginstitute.com/2008/01/seth-godin-cont/.
110
Joe Pulizzi, “Hey WSJ – Content Marketing Is NOT Native Advertising,” Content Marketing
Institute, November 6, 2014, http://contentmarketinginstitute.com/2014/11/wsj-content-marketing-not-
native/.
39
types such as editorial articles, short films, photography, and webisodes, it also entails a keen
understanding of how content can be strategically distributed through a mix of owned, paid, and
earned media channels.
The shift to content marketing has led a large number of agencies to set up their own
content strategy and execution studios, complete with dedicated executives. Ad Age ran a feature
on how digital agencies including Huge, Deep Focus, Digitas, Rosetta, and Possible have all
established content practices to produce original content for clients; this content ranges from
opinion pieces and blogs to entertainment videos and real-time social media posts.
111
Creative
agencies are arguably more adept at content creation, since they can take advantage of their
existing production studios and in-house talents. However, quite a few of them—Kirshenbaum
Bond Senecal & Partners, Barbarian Group and Martin Agency, for instance—have also
appointed senior executives directing content strategy.
112
This is partly because they’re vying for
the same content marketing budget that other agencies are targeting; but more importantly, it’s
because the content creation process is a huge departure from how commercials are produced.
The nature of these newly created content studios is mostly real-time to address the
challenge of staying relevant to social buzz points and responsive to audience needs. That is why
Madison Avenue has been witnessing operations like “newsdesks” or “newsrooms” being
adopted by agencies like BBDO and Publicis to not only monitor and analyze real-time data, but
also distribute and buy media on the spot.
113
This is a trend that’s been pollinating the PR
industry, with almost all publicly owned agencies offering such service to clients. It is important
111
John McDermott, “Digital Agency 'Newsrooms' Brand Oil Spills and Cat Videos,” Advertising
Age, April 29, 2013, http://adage.com/article/agency-news/digital-agency-newsrooms-brand-oil-spills-cat-
videos/241086/.
112
Maureen Morrison, “KBS&P Hires Jonah Bloom to Lead Content Strategy,” Advertising Age,
April 29, 2011, http://adage.com/article/agency-news/kbs-p-hires-jonah-bloom-lead-content-
strategy/227305/.
113
Tadena, “Agencies Model Newsrooms.”
40
to note that while the majority of independent PR agencies now provide social media analytics
and reporting, they have yet to subscribe to the newsroom business model, which requires heavy
investments—with the exception of Edelman. Edelman has already spent more than $4 million on
newsroom talent alone, hiring executives with experience in media buying and journalism, said
Mark Hass, former president and CEO of Edelman U.S.
114
Priding themselves on their long-term experience working with publishers and media
companies, media agencies seem to be fairly competitive in the branded content game. With the
media landscape becoming increasingly fragmented in the digital era, the idea that “the medium
is the message” is growing in its importance; clients now depend on media agencies’ finest
judgment on content distribution. Omnicom’s Content Collective group, for instance, will host
hackathon-like programs with emerging digital startups and platforms to incubate the next
Facebook.
115
This has led some creative agencies to rethink bringing back media in-house to help
creative developments fit better into different media channels. “In some ways, media shops have
a bigger stake in the content game, since their core strength is distribution. Media agencies have a
greater ability to come up with a creative idea that will work in various media settings and then
measure the impact,” said Mike Wiese, head of entertainment and programming at JWT.
116
Indeed, while previously shut out of the creative consultancy part of client work, media
agencies are now able to offer content advice, thanks to their strategic alliances with popular
media outlets. For example, Mindshare is the first agency to access BuzzFeed’s proprietary
analytics system, which would allow the agency and its clients to know the trendiest stories
114
Natalie Zmuda and Alexandra Bruell, “Everyone Wants In on Content, But What's the Best
Approach?,” Advertising Age, September 24, 2013, http://adage.com/article/media/agencies-talent-houses-
marketers-content/244264/.
115
Ibid.
116
Ibid.
41
across the web, the topics of these pieces, and their hosting sites on a real-time basis.
117
Media
agencies’ partnerships with BuzzFeed have gone a step further—the content marketing maven is
populating a program called “BuzzFeed in Residence” among media agencies to teach them how
to create web content as viral as that found on BuzzFeed.
118
The area where media agencies have really scored big is branded entertainment. Almost
all major media firms have established entertainment divisions, but in the content marketing era,
these functions have gone beyond just striking sponsorship deals with media companies. Ad Age
ran a feature titled “Media Agencies Make Mark as Content Creator” that reported how MEC
Entertainment, Mindshare Entertainment, and OMD’s Greenroom Entertainment all created new
content, including an original TV program, a comedic web series, and a content-creation reality
contest.
119
In addition to news-centric and journalistic content, branded entertainment is arguably
another big chunk of the content marketing pie. Edelman set up a virtual entertainment
production house named Edelman Studios in 2008 to round up budding creative talent.
120
Creative agencies like Ogilvy and JWT also have their dedicated entertainment divisions.
Mike Wiese, head of entertainment and programming at JWT, explains that agencies
must begin to think more like Hollywood studios: “Produce a story that resonates with consumers
and creates an emotional connection to the brand. Work with premium talent and production
partners that will reach the desired audience. Distribute the content via paid, earned and owned
117
Michael Sebastian, BuzzFeed Deepens Ties With Media Agencies, Partners With Mindshare,”
Advertising Age, March 26, 2014, http://adage.com/article/agency-news/buzzfeed-partners-mindshare-
deepens-agency-ties/292320/.
118
Michael Sebastian, “BuzzFeed Starts Program to Train Agencies in the BuzzFeed Way,”
Advertising Age, May 9, 2013, http://adage.com/article/media/buzzfeed-starts-program-train-
agencies/241395/.
119
Steve McClellan, “Media Agencies Make Mark as Content Creators,” Advertising Age, April
25, 2011, http://adage.com/article/media/media-agencies-make-mark-content-creators/227163/.
120
Rupal Parekh, “PR Giant Edelman Ventures Into Branded Content,” Advertising Age, April 24,
2008, http://adage.com/article/madisonvine-news/pr-giant-edelman-ventures-branded-content/126629/.
42
media, integrating the story and character into traditional marketing. And build programs that
extend the story through merchandise and technology.”
121
As such, the demand for screenwriters,
producers, and directors is as strong as that for journalists and writers. In fact, a lot of the content
studios mentioned earlier are staffed with a mix of specialists steeped in the fields of
entertainment, digital, and news reporting.
What is quite unique about the content marketing scenario is that agencies’ greatest
competitors may be from the media world rather than the agency world. A concerning figure
suggests that while the content marketing budget is steadily increasing, “The biggest recipient of
outsourcing is publishing firms, which got 36% of that spending, up from 32% last
year,” according to Ad Week. “Design firms and ad agencies saw their shares shrink. PR and
marketing firms’ share rose slightly, and interactive firms’ share was flat.”
122
Examples abound
where brands solicit help directly from publishers for content creations: Citibank worked with
eHow in developing a video series targeting young couples who are fraught with financial
challenges; BuzzFeed and Cracked.com produced sponsored content for Virgin Mobile.
123
What’s
more staggering is how a plethora of creative service studios owned by media outlets have
cropped up that are very much like advertising agencies. CND Studios, the creative group of
Conde Nast, created online video series as well as digital ads that ran on Facebook and YouTube
for its client Kenneth Cole.
124
Based on this trend, Ad Age ran a feature report detailing how
media companies like Rolling Stone, Vogue, Maxim, Time Warner, and NBC Universal have all
121
Cynthia B. Meyers, “Branded Entertainment Reshapes Media Ecosystem,” Carsey-Wolf Center,
June 27, 2014, http://www.carseywolf.ucsb.edu/mip/article/branded-entertainment-reshapes-media-
ecosystem.
122
Lucia Moses, “Where Branded Content Dollars Are Going,” Adweek, December 3, 2013,
http://www.adweek.com/news/advertising-branding/where-branded-content-dollars-are-going-154272.
123
Giselle Abramovich, “In Content Era, What’s the Role of Agencies?,” Digiday, May 7, 2013,
http://digiday.com/brands/in-content-era-whats-the-role-of-agencies/.
124
Edmund Lee, “Conde Nast: Let Us Be Your Creative Agency,” Advertising Age, April 21,
2010, http://adage.com/article/media/conde-nast-make-ads-run-facebook-youtube/143415/.
43
set up agency-like in-house practices to help clients with promotional strategies.
125
Some might argue that these publisher-owned agencies skew advertisement creation more
than content creation, but as the rise of native advertising continues to blur that line, brands are
expected to seek more help from publishers who are also original content producers. As Digiday
reports, creative teams these days are content-oriented—“Today, it’s the ability to create a whole
world of content around a passion point that ties to a brand. And that world of content includes
events, writing tweets, blog posts, releasing a video, all within an online or mobile destination,”
said Spencer Baim, chief strategic officer at Vice Media and former head of the publisher’s in-
house agency, Virtue.
126
Moreover, giant publishing houses like Hearst and Meredith Corporation have acquired
digital marketing agencies in recent years, jumping into the competition for digital assignments.
Hearst acquired the search marketing agency iCrossing in 2010 and transformed it into a content
marketing agency by setting up a Live Media Studio that produces infographics, videos,
interviews, and how-to pieces for brands.
127
Meredith’s Xcelerated Marketing agency has locked
in impressive revenue from its digital marketing, word-of-mouth, and customer relationship
management services and has won big accounts like Chrysler's AOR in CRM and social media.
128
In fact, the Association of National Advertisers has run a case study on Meredith Xcelerated
125
Brian Steinberg, “What Is Conde Nast Doing Making Kenneth Cole's YouTube Ads?,”
Advertising Age, April 26, 2010, http://adage.com/article/agency-news/conde-nast-making-kenneth-cole-s-
youtube-ads/143491/.
126
Josh Sternberg, “The New World of Creative Services,” Digiday, February 27, 2013,
http://digiday.com/publishers/the-new-world-of-creative-services/.
127
Kunur Patel, “After Hearst Acquisition, iCrossing Moves Into Branded Content,” Advertising
Age, May 31, 2011, http://adage.com/article/agency-news/acquisition-icrossing-moves-branded-
content/227840/.
128
Steinberg, “New World of Creative Services.”
44
Marketing, heralding the new agency model.
129
While the agency operations of media companies are likely to be forceful players in the
content marketing race, another pattern has simultaneously emerged where agencies form
reciprocal relationships with publishers—such as Leo Burnett with Huffington Post and 360i with
Mashable.
130
In these partnerships, publishers benefit from agencies’ client resources and
budgeting control; at the same time, agencies gain exclusive access to media outlets’ backend
data and content opportunities. This trend reflects the bigger picture that’s shaping the industry in
which different parties are increasingly “frenemies” with each other, as observed by Sir Marin
Sorrell, CEO of WPP Group.
131
Essentially, it’s the cutthroat agency competition that led to the
various forms of strategic alliances between seemingly conflicting parties. As put by Randall
Rothenberg, IAB president and CEO, “It [agencies’ co-creation with publishers] has mostly been
driven by the media agencies looking for new sources of revenue. But now we see it happening
on the creative agency side as well. It’s really all about the battle within the advertising industry
within the creative and media agencies over the increasingly margin-pressured services.”
132
PR Firms’ Foray into Non-Traditional Areas
As forecasted by Forrester, more than 80% of digital marketing will remain ad buys in
the areas of display, online video, social, or mobile, despite the increasingly important roles
129
Keith Sedlak, “New Agency Model: Media Company as Agency” (presentation, ANA Agency
Relations Committee, New York, NY, December 11, 2011).
130
Lucia Moses, “The Huffington Post Offers Agencies Content Lessons,” Digiday, October 13,
2014, http://digiday.com/publishers/huffington-post-teams-leo-burnett/.
131
Stephen Lepitak, “Age Of Disruption: WPP Boss Sir Martin Sorrell On How Technology Is
Changing The Marketing Agency Landscape,” The Drum, June 26, 2014, http://www.thedrum.com/news/
2014/06/26/age-disruption-wpp-boss-sir-martin-sorrell-how-technology-changing-marketing-agency.
132
Lucia Moses, “The Huffington Post Offers Agencies Content Lessons,” Digiday, October 13,
2014, http://digiday.com/publishers/huffington-post-teams-leo-burnett/.
45
played by earned impressions and engagements.
133
This is partly because paid media allows for
fast and scalable impact, whereas earned media requires time to show its effects. Therefore, in
order to win a bigger digital marketing budget, PR agencies—whether big or small, private or
public—are aggressively establishing and developing non-traditional capabilities such as media
planning and buying, creative development, and so forth. The progress is most plainly shown by
agencies’ growth figure breakdowns. According to PRWeek editor Steve Barrett, only three out of
the 12 highest-grossing agencies in 2013 saw organic revenue growth, meaning that the majority
of firms are diversifying their businesses, either by extending new service offerings to existing
clients or acquiring new practices.
134
Similarly, the 2014 World Report by the Holmes Report
showed that 69% of the surveyed firms listed social media community management in their top
three growth areas, with 37% citing multimedia content creation and 26% crediting digital build
and production.
135
In 2012, Ad Age reported how publicly owned PR firms raised their media-buying games
to “new heights”: in 2011, Fleishman spent $100 million in ad buys for a total of 25 of their
clients, compared to MSL’s figure of $55 million; likewise, the media-buying volume of Weber
Shandwick quadrupled from 2009 to 2011.
136
For privately owned PR firms, such numbers are
difficult to attain, but their self-described service offerings may offer a glimpse into their
expanded skillsets. Around 85% of the top 100 PR firms ranked by O'Dwyer’s in 2014 clearly list
“media planning and buying” as one of their service areas.
Mergers and acquisitions are another approach used by PR firms of a certain scale to
133
Stutzman, “The Digitization of Agencies.”
134
Steve Barrett, “Tough Challenges For H+K's New Leadership,” PRWeek, July 25, 2014,
http://www.prweek.com/article/1305395/tough-challenges-h+ks-new-leadership.
135
“Talent Top Challenge,” Holmes Report.
136
Alexandra Bruell, “PR Agency Media Buys Rising to New Heights,” Advertising Age 83, no.
18 (Apr 30, 2012): 8, http://search.proquest.com/docview/1010768849?accountid=14749.
46
boost their advertising and paid media offerings. Publicly owned PR agencies certainly have the
financial muscle and support from their parent groups to lock down deals, but large, independent
firms have also actively sought for expansions. APCO Worldwide, the second biggest private PR
network behind Edelman, made headlines on The Wall Street Journal by acquiring New York-
based ad agency StrawberryFrog. “We invested in an advertising agency because as
communications disciplines converge we need to be in all areas,” said Margery Kraus, APCO's
founder and chief executive.
137
Up-and-comer Lewis PR has frequently made headlines in recent
years due to its aggressive global expansions. According to the firm’s official blog, the rollout of
its ambitious digital hub—Lewis Pulse—was achieved through acquiring digital marketing shops,
and more investments like these are underway.
138
In addition to advertising-focused acquisition
targets, the growing content business has propelled PR firms to look for support from content
specialty firms and content publishing studios, with H+K Strategies buying digital content firm
Group SJR
139
and Next Fifteen Communications acquiring Republic Publishing
140
.
As far as staffing is concerned, media buyers and planners are highly sought after by PR
firms in an attempt to bridge the skill gap. Edelman, for instance, has attracted major headlines by
hiring former executives at big media agencies such as Cassel Kroll from Mindshare and Chris
Paul from VivaKi; both will be helping Edelman solidify its buying power through staff
137
Suzanne Vranica, “Washington PR Firm Buys Advertising Agency,” The Wall Street Journal,
February 15, 2012, http://www.wsj.com/articles/SB10001424052970204792404577225492642029720.
138
“LEWIS Acquires Digital Marketing Agency Purestone,” Lewis PR, May 6, 2014,
http://blog.lewispr.com/2014/05/lewis-acquires-digital-marketing-agency-purestone.html.
139
Brittaney Kiefer, “H+K Strategies Acquires Digital Firm Group SJR,” PRweek, June 25, 2013,
http://www.prweek.com/article/1275383/h+k-strategies-acquires-digital-firm-group-sjr.
140
Daniel Farey-Jones, “Next Fifteen Plans to Build around First Content Marketing Acquisition,”
PRweek, April 8, 2014, http://www.prweek.com/article/1289414/next-fifteen-plans-build-around-first-
content-marketing-acquisition.
47
developments, new media buying procedures, and investments in ad tech.
141
For the more
ambitious Ketchum, newly hired specialists have formed a dedicated digital-media buy unit
called “Agile Amplification” that is busy negotiating contracts and partnerships with ad tech
firms just like any pure-play media agency.
142
As visual storytelling becomes increasingly important in digital content creation, creative
hires are also the norm within the PR industry. According to Josh Rose, former creative director
at Deutsch LA and now chief creative officer at Weber Shandwick, “There are a number of
people here from ad agencies. There’s a cross-pollination happening these days.”
143
Likewise,
Richard Edelman has said that about 20% of the roughly 600 employees in his firm's digital
practice have come from the advertising business.
144
The Wall Street Journal has noted that
“many PR firms have hired Madison Avenue creative executives and some firms have built out
strong creative divisions within their companies.”
145
Indeed, Edelman has launched a brand
creative boutique called Ruth that has all the structures and talents of a typical creative shop.
146
Essentially, the variety of content types and distribution channels required by digital marketing
has led to talent diversification at PR firms. Jason Wellcome, former executive VP of Weber
Digital and now global head of Mediaco, said that the formation of its content marketing unit,
141
Alexandra Bruell, “Edelman Creeps into Paid Media with Appointment of Vivaki's Chris Paul,”
Advertising Age, November 20, 2013, http://adage.com/article/agency-news/edelman-creeps-paid-media-
chris-paul-appointment/245343/.
142
Alexandra Bruell, “Ketchum Launches Digital Media Buying Group,” Advertising Age,
February 28, 2014, http://adage.com/article/agency-news/ketchum-launches-digital-media-buying-
group/291905/.
143
Alexandra Bruell, “Creatives out of Their Comfort Zone: Josh Rose,” Advertising Age, August
17, 2011, http://adage.com/article/agency-news/ad-creative-jumps-deutsch-pr-shop-weber-
shandwick/229294/.
144
Vranica, “Washington PR Firm.”
145
Ibid.
146
Michael Bush, “PR Giant Edelman Gets a Boutique Look with Ruth,” Advertising Age,
October 4, 2014, http://adage.com/article/agency-news/advertising-edelman-back-ruth-full-service-ad-
offerings/146246/.
48
Mediaco, has required new kinds of talent, such as brand planners, editors, user experience
designers, writers, SEO experts, media planners, and producers.
147
Chapter Four: Conundrums Faced by the PR Industry
Is the Name PR a Disservice?
The definition of public relations is a perennial problem plaguing the industry—most
people, including quite a few marketers, still reduce PR to publicity and media placements.
Industry advocates, scholars, and trade associations have been campaigning above and beyond to
change the public’s perception about the public relations profession. Just like other professions,
PR has undergone considerable changes in the age of the Internet and a vastly changing media
landscape. That is why the Public Relations Society of America (PRSA) has substituted the old
definition it adopted in 1982—“Public relations helps an organization and its publics adapt
mutually to each other”—with a modern one: “Public relations is a strategic communication
process that builds mutually beneficial relationships between organizations and their publics.”
148
It is yet to be seen whether the new definition will have any positive impact on PR agencies
acquiring new businesses; nonetheless, agencies themselves seem to have found ways to release
the “definitional burden” on their reputation and revenue growth.
Dave Senay, chair of the Council of Public Relations Firms (CPRF) in 2013-2014, has
noticed a declining rate of self-identification as public relations among member agencies.
According to Senay, a 2013 survey showed that less than half of the member firms referred to
147
Alexandra Bruell, “Weber Shandwick Sets up New Unit to Capitalize on Content Marketing
Craze,” Advertising Age, March 27, 2013, http://adage.com/article/agency-news/weber-shandwick-sets-
unit-capitalize-content-marketing-craze/240564/.
148
“What is Public Relations? PRSA’s Widely Accepted Definition,” Public Relations Society of
America, accessed November 28, 2014, http://www.prsa.org/aboutprsa/publicrelationsdefined/#.VP_Dc
PzF_h4.
49
themselves as pure PR agencies, which is a considerable drop from the 2010 survey result of
69%. When it comes to actual title descriptions, very few firms would use the term “PR.” In
2013, only 13 out of the 110 CPRF member agencies used “PR”; even in 2003 when the council
had 99 members, only 18 of them used the term.
149
Jack O’Dwyer also added that there are only
two firms left among O’Dwyer’s Top 50 List that still adopt the “PR” name.
150
As PR agencies
take on so many new roles beyond “press agents,” the label PR is not only an undue
representation of their service offerings but also an obstacle when competing directly with other
types of agencies.
In 2012, PRWeek ran a feature on how a host of PR agencies have rebranded themselves
to reflect their newly established capabilities and business philosophies.
151
Publicly owned
agencies like FleishmanHillard, Weber Shandwick, and Burson-Marsteller have made slight
changes in their logos and adopted new taglines—“The Power of True,” “Engage, Always,” and
“Being More,” respectively—to demonstrate their enhanced abilities to solve clients’ problems
across all channels, platforms, and consumer touch points. Independent firms such as PadillaCRT,
Peppercomm, and Horn have also made similar moves to prove their all-around skills in
marketing and communications. It is yet to be seen whether these rebranding efforts will
contribute to agencies receiving pitch invitations that would otherwise be sent only to creative or
digital agencies. Forrester analysts seem to suggest that the homogenization of agency service
offerings in digital and social would lead to the eventual triumph of know-it-all agencies; Mullen
149
Jack O’Dwyer, “Council of PR Firms Needs a New Name,” O’Dwyer’s 27, no.12 (Dec 2013):
6, accessed November 27, 2014, http://www.odwyerpr.com/magazine/odwyers-magazine-december-
2013.pdf.
150
Ibid.
151
Lindsay Stein, “Agency Rebrandings Reflect Changing Marketing World,” PRWeeek, October
5, 2012, http://www.prweek.com/article/1277907/agency-rebrandings-reflect-changing-marketing-world.
50
was chosen by JetBlue Airways and Zappos.com because of its “hyper-bundled approach.”
152
For others, scrapping the “PR” name completely is giving up agencies’ legacy expertise
in traditional PR. As put by Dalton Dorné , former CMO of Havas PR, “Everybody is obsessed
with saying they can do everything and they can be all things for all people. We’ve said we are
great at social media, but we are really good at what defines PR at the beginning.” She adds, “We
are excellent at media relations and we get a lot of buzz.”
153
Regarding the definition or naming
issue facing PR agencies, the author contends that they should focus on building their portfolios
instead of fixating on labels. Above all, public relations is a concept and philosophy that can be
embraced by anybody who believes in such thinking—as was discussed in earlier chapters, ad
agencies can take on PR ideas without actually setting up PR departments. As all types of
agencies have undergone transformations in the digital era, PR firms are not the only group that’s
been experiencing an identity crisis. Lindsay Pattison, global CEO of Maxus, has lamented how
clients “lag behind” in their perception of what media agencies can now offer: “There is so much
more that a media agency can do than buying spots and spaces.”
154
In the midst of this great,
ongoing paradigm shift for both marketers and agencies, the best thing that “PR agencies” can do
is to quickly identify core value propositions and establish a renewed reputation.
PR as Brand Strategy Lead
In addition to this definitional problem, the PR industry has also been afflicted with the
secondary position to advertising creative agencies when it comes to owning brand strategy.
Though ad men would self-righteously assert that it’s because they’re more creative when it
comes to big brand ideas, the root of this matter goes back to a historical issue of legacy.
152
Stutzman, “The Digitization of Agencies.”
153
Stein, “Agency Rebranding.”
154
Davies, “Havas Media and Maxus Chiefs.”
51
Advertising agencies have been the go-to counselors for marketing departments when defining
brand positioning and strategy. In contrast, PR agencies generally work with corporate
communications departments that manage stakeholder relationships.
This exclusion of PR from the branding table has deprived PR agencies of the
opportunities that ad agencies have to deepen understanding of the client business as well as
develop a formal brand-planning process and rigorous research capabilities. Account planning is
the common research and analytics procedure among ad agencies to uncover “consumer
insight”—the defining factor influencing consumers’ choice of brands, which forms the
cornerstone of marketing and advertising strategy. On the contrary, public relations research is
“the systematic effort before, during, and after a communication activity aimed at discovering and
collecting the facts or opinions pertaining to an identified issue, need, or question,” according to
the widely referenced guidebook A Practitioner’s Guide to Public Relations Research,
Measurement, and Evaluation.
155
While brand planners immerse themselves in market research
and consumer surveys to discover new opportunities in the consumer decision journey, PR
campaign planning is based on the communication life cycle. Marian Salzman, CEO of Havas PR
North America, said that “there's an opportunity for the PR industry to develop an insights
process that yields more than tactics,”
156
in response to PR agencies’ failing at Cannes’ PR
Category.
The lack of insight-mining processes at PR agencies is largely due to the fact that until
very recently, PR primarily targeted third parties like reporters and thought leaders instead of
mass consumers directly. Moreover, because of their long-standing relationship with CMOs and
155
Don W. Stacks and Donald K. Wright, A Practitioner’s Guide to Public Relations Research,
Measurement, and Evaluation (New York: Business Expert Press, 2010), 203.
156
Matthew Creamer, “JWT Snares PR Grand Prix for Banco Popular, Puerto Rico,” Advertising
Age, June 18, 2012, http://adage.com/article/special-report-cannes-2012/jwt-snares-pr-grand-prix-banco-
popular-puerto-rico/235450/.
52
marketing teams, advertising agencies generally have a much bigger budget to fund intensive
research. On the staffing and structural level, PR agencies traditionally do not divide staff among
specialized areas like creative, planning, and account services; layering another task of brand
planning to PR account executives is not a feasible solution. Nonetheless, strategic planning,
though not in the same form as that of ad agencies, has been a crucial part of PR campaign
development. Some agencies have established research departments and practices to poll public
opinion and gauge brand perceptions. But it’s essentially the opportunity to engage consumers
directly in the digital era that has spurred PR agencies to strengthen their research capabilities and
emphasize consumer intelligence. Hill + Knowlton Strategies, for instance, launched their
Research + Data Insight division in 2012.
157
Ogilvy Public Relations developed an Insights &
Strategy group comprised of senior and up-and-coming agency talents who will receive training
and assistance in developing insight-driven strategies for clients’ businesses.
158
Furthermore, there is an interesting trend where former brand planners at advertising
agencies are getting hired at PR agencies—as in the case of Edelman hiring a former
TBWA/CHIAT/DAY strategy director
159
and FleishmanHillard snagging Leo Burnett’s strategy
and planning veteran
160
. Independent firm Taylor has been featured on Harvard Business Review
and rated Consumer Agency of the Decade by Holmes Report because of its superior approach to
157
“Hill+Knowlton Strategies Launches Research+Data Insights,” H+K Strategies, February 12,
2014, http://www.hkstrategies.com/news/hillknowlton-strategies-launches-researchdata-insights.
158
“Ogilvy Public Relations Launches Insight & Strategy in North America,” Ogilvy Public
Relations, February 6, 2014, http://www.ogilvypr.com/en/press/ogilvy-public-relations-launches-insight-
strategy-north-america.
159
“Edelman Hires Catherine Heath to Senior Planning Role,” Holmes Report, January 8, 2015,
http://www.holmesreport.com/latest/article/edelman-hires-catherine-heath-to-senior-planning-role.
160
Danielle Drolet, “Dale Joins Fleishman As Director, Strategic Account Planning,” PRweek,
October 4, 2011, http://www.prweek.com/article/1263125/dale-joins-fleishman-director-strategic-account-
planning.
53
brand strategy planning.
161
In an unorthodox arrangement for a PR agency and in similar fashion
to an ad agency or consultancy, each client of Taylor is serviced by a dedicated planner who leads
the creative development from ideation to execution. According to Taylor’s own website, their
Brand Planning Group is composed of account-planning veterans from big name legacy agencies
such as Ogilvy, DraftFCB, Saatchi & Saatchi, and JWT as well as renowned management
consultancy firms. Paul Holmes, publisher of The Holmes Report, once commented, “The public
relations industry is undergoing an incredible transformation, playing a more central role in brand
and business-building for its clients, and Taylor is at the forefront of that revolution.”
162
While PR agencies strive to be the next powerhouse for big brand ideas, a somewhat
conflicting trend has been developing in the marketing and advertising world as a result of the
digital transformation: “The big idea is dead,” said Kevin Roberts, executive chairman of Saatchi
& Saatchi Worldwide.
163
He further urged creative people to develop “lots and lots of small
ideas,” because small ideas touch and build emotional connections with people who can then
transform these small interactions into big social sensations. Other advertising executives have
expressed similar concerns about the irrelevancy of big ideas. For instance, Tom Murphy, co-
chief creative director at McCann Erikson, has talked about the “long idea” that underpins a
“constantly evolving dialogue” with consumers.
164
Sophie Kelly, CEO of The Barbarian Group,
concluded that storytelling does not have to be led by “big ideas” and that there are a multitude of
creative solutions. Indeed, new marketing philosophies—like content marketing—advocate for a
161
Michael Rovner, “Solutions Built Differently,” Adweek, August 19 2011,
http://www.adweek.com/sa-article/solutions-built-differently-134260.
162
“Taylor Celebrating 30 Years,” Street & Smith's SportsBusiness Journal 16, no. 46 (March 17 -
23, 2014): 6A, http://taylorstrategy.com/wp-content/uploads/Taylor30_Mar17_fullproof12.pdf.
163
Richard Draycott, “ ‘Marketing Is Dead’ Says Saatchi & Saatchi CEO,” The Drum, April 25,
2012, http://www.thedrum.com/news/2012/04/25/marketing-dead-says-saatchi-saatchi-ceo.
164
Elliott, “A Top Agency.”
54
constant, always-on campaign that delivers content in streams and in real time.
165
This new reality undoubtedly casts a shadow over planners who are accustomed to a
meticulous and drawn-out research process that derives insights from past consumer data. In her
Adweek opinion piece, Maria Tender, director of brand planning at DDB New York, pointed out
that “the ability to craft an impeccable, four-month research plan” is less valued in a tumultuous
marketing situation than the ability to draw real-time insights.
166
From the perspective of Mark
Earls, expert and published author on brand planning, the reason why the “big idea” no long
works as effectively is that consumer interests and behaviors are in a continuous flux, and betting
creative campaigns on a single concept is risky.
167
Coca-Cola global content director David
Campbell has gone so far as to claim that “execution should shape strategy in real time,” since a
“big idea” can be conceived through testing out multiple smaller ideas and grasping the
moments.
168
Another challenge for traditional ad planners comes from the fact that digital and social
media have democratized consumer research by allowing virtually anyone to access the abundant
consumer data scattered across the Internet. This means that any type of agency, once equipped
with adequate analytics capabilities, can potentially come up with mind-blowing consumer
insights. Client-side marketers have reportedly said that they don’t care where great ideas come
165
Jack Marshall, “Meet the New Agency Creative Team,” Digiday, February 13, 2014,
http://digiday.com/agencies/pulsepointes-the-new-agency-creative-team/.
166
Maria Tender, “Strategic Planning Builds Brands Through Real-Time Multitasking,” Adweek,
May 13, 2014, http://www.adweek.com/news/advertising-branding/strategic-planning-builds-brands-
through-real-time-multitasking-157561.
167
Hoag Levins, “Is 'The Big Idea' Such a Good Idea for Social Marketing?,” Advertising Age,
August 11, 2009, http://adage.com/article/video/big-idea-a-good-idea-social-marketing/138394/.
168
Antony Young, “Mindshare's Antony Young on Cannes: Smart Brands Find Ways to Plan
Campaigns Less,” Advertising Age, June 25, 2013, http://adage.com/article/special-report-cannes-
2013/mindshare-s-antony-young-cannes-brands-plan/242840/.
55
from; PepsiCo, for example, briefs all partner agencies at the same time to pick the best idea.
169
PR agencies have been taking advantage of this opportunity to elevate their roles as brand
counselors. Harris Diamond, chairman and CEO of McCann Worldgroup and former head of
IPG’s Constituency Management Group, has observed that “more and more, we’re becoming the
brand stewards rather than the brand tactical executors. Our people are being asked to drive the
programs, whereas in the past the creative or direct guys were driving.”
170
In order for PR
agencies to attain core competencies in brand strategy and planning, the industry needs to
continue applying the same rigor as marketing does towards analytics. As Michael Frohlich, CEO
of Ogilvy PR UK, pointed out, there is plenty of creative talent in the PR world, but “they need to
get better at the data and listening and the insight process. That’s where we’re poorer as an
industry versus media and ad agencies.”
171
Creativity and PR
Hand in hand with the issue of PR agencies seldom taking the brand strategy lead is the
widely held belief that the industry lacks creativity. Especially after Cannes Lions International
Festival of Creativity opened the PR category in 2009, there are often heated discussions about
why the PR industry rarely gets recognized for their creative ingenuity. Even in cases where PR
agencies do snatch awards, the winning campaigns are usually joint projects with an ad or media
agency; PR agencies are not the generators of the creative ideas. For instance, Edelman’s
contributions to the Cannes PR Grand Prix-winning campaign Chipotle’s Scarecrow were
169
Ben Malbon and Greg Andersen, “How Marketers Might Change to Deliver ‘Adaptive
Branding,’” Advertising Age, October 20, 2009, http://adage.com/article/cmo-strategy/marketers-change-
deliver-adaptive-branding/139789/.
170
Michael Bush, “Weber Shandwick Is No. 9 on Ad Age's Agency A-List,” Advertising Age,
January 25, 2010, http://adage.com/article/special-report-agency-alist-2009/weber-shandwick-9-ad-age-s-
agency-a-list-2009/141694/.
171
Arun Sudhaman, “Cannes 2014: PR’s Battle For Marketing Relevance,” Holmes Report, June
30, 2014, http://www.holmesreport.com/long-reads/article/cannes-2014-pr's-battle-for-marketing-relevance.
56
traditional earned media efforts like getting press coverage and amplifying campaign exposure.
Given how the marketing paradigm shift points directly at PR’s core competencies in storytelling
and relationship building, one can’t help but wonder if PR agencies have not seized the golden
opportunities available. Richard Edelman has emphatically pointed out that in order for PR-
driven marketing to work, agencies have to “insist on superb creative work because it excites and
drives people.”
172
It goes back to the historic issue—while effective communication in PR has traditionally
been delivered through text-based messaging, advertising has always been about visual impact.
As PR modernizes itself in the digital marketing era, one inevitable disadvantage is the lack of
ability to tell graphical stories. Paul Taaffe, former chairman and CEO at Hill & Knowlton, once
noted, “Quite often, that activation is visual and not that many PR firms have those kinds of
creative capabilities.”
173
If PR agencies aim to take charge of more creative campaigns, they have
to hold themselves to the creative standards set by their advertising counterparts. PR agencies
have indeed been actively hiring former art directors, graphic designers, and visual developers to
fill this talent gap. According to the 2014 Creativity in PR study (annual research begun in 2012
by Holmes Report to examine the industry’s creativity progress), 42% of respondents had a
creative director in place. Moreover, creative development had been made into a formal process
in 72% of responding agencies, showing a steady year-on-year increase from 2012.
174
However, the encouraging figure might have covered a deeper problem—these creative
initiatives are add-ons in nature and have not been translated into enhanced creative prowess.
172
Richard Edelman, “Communications Marketing,” Edelman, September 23, 2014,
http://www.edelman.com/p/6-a-m/communications-marketing/.
173
Chris Daniels, “PR Firms Still Seek Creative Edge in Social Media Efforts,” PRweek 13, no. 9
(09, 2010): 18, http://search.proquest.com/docview/759011619?accountid=14749.
174
Arun Sudhaman, “Creativity In PR 2014: Is The Industry Investing Enough?,” Holmes Report,
December 11, 2014, http://www.holmesreport.com/latest/article/creativity-in-pr-2014-is-the-industry-
investing-enough.
57
Less than one-fifth of the client respondents in the 2013 Creativity in PR survey were constantly
pleased with the level of creativity presented by their PR partners, and the same result held true in
2014. Most worryingly, many more than half of surveyed clients rated the creative quality of PR
agencies’ ideas as bland or even worse.
175
Editor in chief of the Holmes Report, Arun Sudhaman,
has asserted that “nowhere is the talent shortage more pressing, furthermore, than in the PR
industry’s creative ranks.”
176
It comes as no surprise that PR agencies trail advertising and digital
agencies in brand marketers’ creative scoring card.
As discussed earlier in chapter two, edgy creative agencies have smoothly adopted PR
thinking, and some of them have successfully transformed that methodology into full-blown
campaigns. At the 2011 PRSA Leadership Rally, Richard Edelman showcased several advertising
campaigns he deemed as PR idea-driven and lamented how campaigns like them “should have
been us.”
177
His observation explains why most of Cannes PR-winning campaigns are developed
by advertising agencies. As much as the PR industry would like to grumble about ad guys
poaching PR’s skills and techniques—Heather Mitchell, head of global PR for Unilever Hair
Care, has grieved that “all the awards are all about the work that we do, yet we’re not getting
credit for it”
178
—the lost Cannes awards should awaken them to the fact that the PR industry is
not as open-minded about embracing creativity.
In this hyper-converged communications landscape, genuinely creative ideas come from
a holistic view of marketing that takes into account all approaches and channels. That’s why an
175
Arun Sudhaman, “2014 Study: Creativity in PR on the Rise despite Client Concerns,” Holmes
Report, December 11, 2014, http://www.holmesreport.com/research/article/2014-study-creativity-in-pr-on-
the-rise-despite-client-concerns.
176
Arun Sudhaman, “PR Industry Opportunity is Plain for All to See at Cannes,” Holmes Report,
June 20, 2014, http://cannes.holmesreport.com/latest/pr-industry-opportunity-is-plain-for-all-to-see-at-
cannes.
177
Woodward, “Richard Edelman.”
178
Sudhaman, “Cannes 2014: PR’s Battle.”
58
ad agency could enter the PR category and 80% of the media category awards went to agencies
that were not media-centric.
179
As Steve Barre, PRWeek editor in chief, wrote, “One big takeaway
for me, as I sat in the auditorium watching the PR, Direct, and Promo & Activation Lions being
awarded, was that there were many entries that could have won in any of the discipline
sections.”
180
Although PR agencies have aggressively branched out to other disciplines, they may
have been constrained by the compulsion to think inside the PR box. Renee Wilson, chief client
officer of MSLGroup and president of the 2014 Cannes PR Lions Jury Committee, has urged PR
agencies to get rid of the PR label and release their full potential by championing non-PR
categories at Cannes.
181
When asked how the PR industry can enhance creativity, Marc Pritchard,
CMO of P&G and a famous advocate for PR, thinks the problem is not that PR ideas aren’t big
ideas, but rather that the industry is not pushing itself hard enough for creative ideation.
182
Indeed,
Holmes Report editor in chief Arun Sudhaman has concluded that “ad agencies are getting better
at PR faster than PR firms are getting better at creative.”
183
Access to Marketing Budgets
As mentioned earlier, part of the blame for the PR industry’s lack of creativity and
strategy input goes to insufficient budget resources from the client—historically the
communications department, which wields much less influence than its marketing counterpart,
which enjoys a whopping budget. According to Stuart Smith, Global CEO of Ogilvy PR, the
budget for public relations is only 15% of what marketing spends. He further claims that “PR can
179
Steve Barrett, “PR Shouldn't Beat Itself Up about Cannes,” PRweek, June 19, 2012,
http://www.prweek.com/article/1278930/pr-shouldnt-beat-itself-cannes.
180
Ibid.
181
Renee Wilson, “Rethinking the PR Rhythm at Cannes,” PRweek, June 1, 2014,
http://www.prweek.com/article/1296400/cannes-view-top.
182
“‘The PR industry needs to come up with big ideas,’” Holmes Report, October 11, 2012,
http://www.holmesreport.com/long-reads/article/-the-pr-industry-needs-to-come-up-with-big-ideas-.
183
Sudhaman, “PR Industry Opportunity.”
59
have an idea, but the comms client doesn't have the money for it—so the idea goes to
marketing.”
184
As PR agencies increasingly demonstrate their competencies in key marketing
concern areas like social media and content creation, budgets have been gradually shifting to
favor the PR industry. Chad Latz, president and global digital practice leader at Cohn & Wolfe,
once said that his social media clients used to be corporate communications folks, but now CMOs
are taking the lead.
185
Kathy Cripps, president of the Council of Public Relations Firms, has also
stated in an interview that CMOs are indeed the primary clients for member firms.
186
However,
it’s hard to pin down whether PR agencies’ growing capabilities in digital areas would lead to a
closer relationship with marketing decision makers, because each organization has very different
division of labor when it comes to new activities like social media and digital marketing. Despite
this perplexing situation, Bonin Bough, VP of global media and consumer engagement at
Mondelez, has advised PR agencies that impressing the “paid media” side of clients is critical to
their influence in brand marketing.
187
Another trend that’s slowly affecting client-side marketers also paints a mixed picture for
PR agencies that want to earn more weight at the strategy table—a dozen organizations have
merged their PR and marketing teams. Apart from the demand for integrated marketing programs,
this trend is also driven by the increasing overlapping of digital marketing duties between PR and
marketing teams; the combination of the two will improve efficiency, cut costs, and deliver
184
Ibid.
185
Chris Daniels, “PR Firms Still Seek Creative Edge In Social Media Efforts,” PRweek,
September 1, 2010, http://www.prweek.com/article/1266531/pr-firms-seek-creative-edge-social-media-
efforts.
186
Norman Sherman, “Exclusive Interview with Kathy Cripps, President of the Council of Public
Relations Firms,” The Troyanos Group, October 23, 2014, http://troyanosgroup.com/uncategorized/
exclusive-interview-with-kathy-cripps-president-of-the-council-of-public-relations-firms/.
187
Arun Sudhamanm “Bonin Bough: Paid Media Critical to PR Firm Relevance among Brand
Marketers,” Holmes Report, June 20, 2014, http://cannes.holmesreport.com/latest/bonin-bough-paid-media-
critical-to-pr-firm-relevance-among-brand-marketers.
60
higher return on marketing investment.
Two forms of integration have been observed so far: first, communications units oversee
marketing or communications leaders take charge of the merged marketing communications
division. Ad Age ran a feature report on how big-name companies like IBM, Intuit, and American
Airlines put a chief communication officer (CCO) in charge of directing marketing strategies.
188
This is undoubtedly exciting news for the PR industry, which has long been the underdog of
marketing. According to Harry Pforzheimer, former CCO at Intuit, the communications budget
has been steadily growing year to year because of PR’s demonstrated ability to drive the
company’s growth. Indeed, with CCOs at the helm, there are more opportunities to bring PR
ideas into fruition and to build processes that measure PR’s ROI contributions.
189
According to
The Rising CCO,
190
a global tracking study of chief communications officers conducted by Weber
Shandwick and Spencer Stuart, the rate of CCOs with marketing oversight increased from 26% in
2012 to 35% in 2014. However, this integration pattern is more likely to happen at business-to-
business companies because, as editor in chief of the Holmes Report Arun Sudhaman presumes,
consumer-facing companies tend to assign leadership to marketing people who bring with them a
fuller budget.
191
The other form of integration occurs when CMOs assume the leading role in the merged
marketing communications function, a method that’s been adopted by giant brands like Virgin
188
Michael Bush, “How PR Chiefs Have Shifted toward Center of Marketing Departments,”
Advertising Age, September 21, 2009, http://adage.com/article/cmo-strategy/pr-chiefs-shift-center-
marketing-departments/139140/.
189
Ibid.
190
“Convergence Ahead: The Integration of Communications & Marketing,” Weber Shandwick,
accessed December 10, 2014, http://www.webershandwick.com/uploads/news/files/convergence-ahead-
the-integration-of-communications-and-marketing.pdf.
191
Arun Sudhaman, “Does P&G’s Restructuring Mean Progress For PR?,” Holmes Report, May
25, 2012, http://www.holmesreport.com/latest/article/does-p-g-s-restructuring-mean-progress-for-pr-.
61
America, Visa, Unilever, and P&G. Some in the PR industry worry that this structure subsumes
PR’s role under marketing because marketing folks look at PR as one of the marketing programs
instead of valuing it as a strategic marketing concept. Moreover, PRWeek has reported on
industry experts’ concerns that marketing is simply not capable of handling other communication
tasks within the purview of PR, such as issue management, investor relations, and government
affairs.
192
However, chief marketing and communications officers (CMCOs) claim otherwise. Chris
Loncto, director of marketing communications at Visa, says, “Before, it was ‘Let’s get everything
done, and then we'll think about PR.’ Now we think about PR in the planning process.”
193
Simon
Sproule, former head of the merged marcomms unit at Nissan, also noted, “This is about bringing
together people, not destroying anything; if anything, the PR and marketing teams are going to
have a more unified and stronger voice within the company.”
194
Even Richard Edelman has
enthusiastically stated how “this is the biggest home run ever” and further explains, “First of all,
it means that PR is now working across both marketing and communications, therefore the
budgets are available. And, you can get programs that suit both.”
195
Incorporating PR in the mix
is arguably beneficial for agencies—talking directly to CMOs about not only communications
solutions but also marketing strategies, finally allowing PR a “seat at the table.”
196
For companies that have not formalized the integration of PR and marketing, the
192
Alec Mattinson, “Renault-Nissan Comms and Marketing Merger Concerns Experts,” PRweek,
September 23, 2010, http://www.prweek.com/article/1030011/renault-nissan-comms-marketing-merger-
concerns-experts.
193
Lindsay Stein, “Marcomms Integrations Put Spotlight On PR,” PRweek, April 26, 2013,
http://www.prweek.com/article/1275979/marcomms-integrations-put-spotlight-pr.
194
Alec Mattinson, “Nissan's Sproule Says ‘We’ll Do More, Better, For Less,’” PRweek,
September 23, 2010, http://www.prweek.com/article/1030012/nissans-sproule-says-well-more-better-less.
195
Stein, “Marcomms Integrations.”
196
Ibid.
62
changing roles of CMOs signal how PR is growingly on their radar. According to a survey
conducted by The CMO Club and Hill & Knowlton in 2010, 66% of the 129 CMO respondents
were exclusively responsible for media relations, followed by 55% for blogger relations and 52%
for crisis issues.
197
Paul Holmes wrote an opinion piece titled “Are CCOs Becoming Endangered
Species?” in response to this trend of CMOs rethinking their marketing approaches and
shouldering non-traditional duties. He summarized the issue in this way: “Marketers are being
forced to think about a wide range of issues that have historically been the domain of corporate
communications.”
198
Chapter Five: What Do Agencies of the Future Look Like?
The motivation behind agencies of all disciplines branching out to new areas of expertise
is not just the competition for the marketing budget; as digital and social continue to permeate all
media types, successful marketing requires the previously disparate channel executions to work
together. Even in the case of earned media—now the most sought-after media type—it “often
requires a paid spark,” says Grant Owens, head of account planning at Razorfish. “We have
empirical evidence that a kick-start from paid media is often the difference between a cultural
juggernaut and complete silence.”
199
Despite agencies’ aspirations to master skillsets across the
whole media spectrum, attempting to build new businesses over an old model rooted in channel
expertise is undoubtedly challenging. As pointed out by Altimeter Group’s The Converged Media
report, most agencies are built on a business model that’s dependent on only one part of the paid,
197
“Many Companies Missing Mark in Aligning Marketing and Public Relations,” WPP,
September 14, 2010, http://www.wpp.com/wpp/press/2010/sep/14/many-companies-missing-mark-in-
aligning-marketing?p=1.
198
Paul Holmes, “Is The CCO An Endangered Species?,” Holmes Report, July 1, 2013,
http://www.holmesreport.com/long-reads/article/is-the-cco-an-endangered-species-.
199
Lauren Drell, “How Social Media Is Changing Paid, Earned & Owned Media,” Mashable, June
23, 2011, http://mashable.com/2011/06/23/paid-earned-owned-media/.
63
owned, and earned media mix.
200
For digital agencies grown in the Internet era, their revenue
model is also based on the separation of a multitude of digital expertise areas such as search,
email, online video, etc. According to Forrester’s August 2011 North American Agency
Landscape Online Survey, agencies unanimously agreed that they must reinvent their business
models.
201
This chapter is dedicated to exploring the key debates and discussions about the
various forms that agencies may take in the future.
Full-Service versus Specialist
Judging from the trend of aggressive service diversification, the agency world seems to
have agreed that a brighter future lies in being as close to the one-stop shop model as possible. At
the 2013 World Federation of Advertisers’ Media Forum, media agencies attendees have
expressed the consensus on the “return to the full-service model.”
202
Steve Farella, former CEO
of TargetCast and now chairman at MDC Partners, asserted in an interview with Ad Age that he
has no doubt that the future for media agencies is a full-service model spanning across the whole
marketing spectrum.
203
For advertising agencies—where discipline-specific agencies were once
spun off—discussions about re-bundling services have also emerged. “We must stop obsessing
about individual companies and silo P&Ls and begin obsessing about collective genius and
teamwork ingenuity,” Nick Brien, former CEO of McCann Group, was quoted saying in Ad Age.
“No individual or specialist business has all the answers, regardless of their pitch.”
204
The same
200
Lieb and Owyang, “The Converged Media Imperative.”
201
Stutzman, “The Digitization of Agencies.”
202
“Future of Media Agencies,” World Federation of Advertisers, November 26, 2013,
http://www.wfanet.org/en/global-news/future-of-media-agencies?p=16.
203
Michael Bush, “What the Media Agency of the Future Will Look Like,” Advertising Age,
September 27, 2010, http://adage.com/article/media/advertising-media-agency-future/146115/.
204
Michael Bush, “McCann Talk Hints at Bringing Media, Creative Closer,” Advertising Age,
August 9, 2010, http://adage.com/article/agency-news/mccann-talk-hints-bringing-media-creative-
closer/145300/.
64
Ad Age article also suggested that all ad executives inherently desire to house capabilities from all
specialist shops, like media and PR, especially since they are now competing directly with them.
For digital agencies, diversification is a natural defense to the threat of all agencies appropriating
digital skills. As put by Razorfish former CEO Bob Lord, “My competition is those bigger
agencies that have full-service suites.”
205
When it comes to PR agencies, the integration imperative is already evidenced in this
frenzy of agencies’ embracing non-traditional communications programs. Donna Imperato, CEO
of Cohn &Wolfe, envisions this trend continuing: “All of the marketing disciplines will come
together to create a new kind of communications agency; we might not even call it PR anymore,
but we’ll continue our storytelling albeit in a more fully integrated fashion—across a blend of
paid, owned, and earned channels.”
206
Moreover, as clients begin to merge their previously
separate marketing and communications teams, agencies that have a more integrated offering will
make for better partners for these newly structured clients. However, it’s yet to be seen whether
agencies’ remodeling initiatives will contribute to new business acquisitions. According to the
2014 Agency-Marketer Business Report by RSW/US, agencies who have won more specific
assignments—such as social or content—than full-service accounts only outnumber those who
have witnessed the reverse trend by eight.
207
This seems to suggest that agencies should vanguard
their specialty areas while steadily emulating a full-blown integration model.
The definition of full-service model needs to be clarified here, since variations of the
model will lead to different agency operations and structures. There are two ways in which
205
Kunur Patel, “Does the Industry Need Big Digital Agencies Anymore?,” Advertising Age,
November 16, 2009, http://adage.com/article/agency-news/industry-big-digital-agencies-anymore/140549/.
206
“What Will a PR Agency Look Like in 15 Years?,” PRweek 16, no. 11 (11, 2013): 33,
http://search.proquest.com/docview/1470422801?accountid=14749.
207
“2014 RSW/US Agency-Marketer Business Report,” RSW/US, accessed October 30, 2014,
http://www.rswus.com/images_and_uploads/2014-RSWUS-Agency-Client-New-Business-Report1.pdf.
65
agencies can deliver full-scale services: one is to physically incorporate all functions and
executions in-house, and the other is to build a satellite of specialist agencies who offer the whole
spectrum of services in cooperation with each other. In this increasingly fragmented and complex
digital landscape where new channels and platforms pop up every day, it is almost impossible to
grasp all the pieces, let alone execute them all.
As Forrester analysts foresee, full-service agencies in coming days will embrace the
Hollywood model, like the agency co:collective, which formed partnerships with 50 other
specialist agencies, consultants, and gurus in order to assemble a team on the fly for any given
project.
208
These types of full-service agencies are full-service in the sense that they have solid
knowledge of the whole marketing communications spectrum and understand how to deploy and
integrate individual pieces to clients’ advantages. Former Y&R chief digital officer Tarik Sedky
has suggested that agencies of the future might be more like a talent managers who coordinate the
efforts of many specialists.
209
In fact, a large majority of marketers surveyed in the 2014 RSW/US
Agency-Client Survey has expressed willingness to work with agencies that rely on partners to
provide specialist services.
210
The biggest independent PR agency, Edelman, is indeed taking this route, albeit with
much bigger ambition. “The essence of what we're trying to create is the first real PR-centered
holding company,” said Richard Edelman. “Around PR can be these adjacent services.
Historically it's always around advertising, but I think the world has changed sufficiently to make
this a viable approach.”
211
In contrast, the full-service model adopted by other PR agencies like
208
Stutzman, “The Digitization of Agencies.”
209
“Reading List: The Agency of the Future,” Digiday, last modified November 11, 2011,
http://digiday.com/social/reading-list-the-agency-of-the-future/.
210
“2014 RSW/US Report.”
66
FleishmanHillard and Golin is more akin to a one-stop shop, an approach that’s openly opposed
by Richard Edelman, who dubbed it “as much an ad agency as PR firm.”
212
He claims that the
industry should leverage the competitive advantage of being the PR specialist rather than
reducing PR to one of the many communications mechanisms. In this flurry of agency reforming
and rebranding, “Some will opt for the FH play of becoming a full-service provider. Others, like
Edelman, will expand the definition of PR.”
213
On the client side, there hasn’t yet been a clear preference for either the full-service or
specialist model—different surveys seem to suggest contrasting trends. According to “The CMO
Challenge,”
214
a study conducted in 2011 by Horn Group and Kelton Research, two-thirds of
CMOs prefer working with smaller firms, and 80% think integrated services will become more
important over the next five years. The 2014 Society of Digital Agency Report shows that clients
are enlisting a mix of full-service and highly specialized digital agencies.
215
According to the
Association of National Advertisers’ survey, the percentage of respondents who think the
“agency of the future” will be more akin to a full-service model far outweigh those who believe
in the specialized model.
216
Still, there is the concern that full-service agencies will have staff that don’t have the
211
Alexandra Bruell, “Edelman Maps Out Holding Company Strategy,” Advertising Age, March
12, 2012, http://adage.com/article/agency-news/edelman-maps-holding-company-strategy/233248/.
212
Richard Edelman, “The New Look of Public Relations — a Dissenting View,” Edelman, April
30, 2013, http://www.edelman.com/p/6-a-m/the-new-look-of-public-relations-a-dissenting-view/.
213
Ibid.
214
Tonya Garcia, “Research: CMOs Looking for Integration, Will Work with Fewer Firms,”
PRNewser, April 3, 2011, http://www.adweek.com/prnewser/cmo-challenge-kelton-research-horn-
group/26230?red=pr.
215
“The SoDA Report 2014,” SoDA, April 16, 2014, http://www.slideshare.net/sodaspeaks/the-
soda-report-volume-1-2014.
216
“2012 Evolution of the CMO and Marketing Team Survey Results,” Association of National
Advertisers, October 12, 2012, http://www.ana.net/miccontent/show/id/rr_2012_cmo_survey.
67
same level of proficiency as specialists, especially experts in novel platforms and channels. But
managing a roster of specialized agencies exacerbates two challenges already on marketers’
minds: budget and integration. Marketers have always emphasized the importance of return on
investment, and basic economy-of-scale theory will point to the financial benefits of appointing
full-service agencies. “Those media dollars are more efficient when they’re spent closely to the
content publishing,” said Deep Focus CEO Ian Schaffer.
217
Waggener Edstrom's Jennifer Moede
echoes that sentiment: “With the emergence of social and mobile, integrated campaigns are a
must-have. We're working to get the clients who are behind the curve up to speed with gusto, so
they get the most out of their communications dollar.”
218
Senior agency executives like Ogilvy &
Mather’s Chicago president and McCann Erikson’s chief digital director have noticed the
reducing number of clients “separating the work” and “passing the baton around.”
219
In fact, the
general hiring trend among the agency world is to scout for multi-disciplinary talents or T-shaped
talents—people who have deep expertise in a particular discipline as well as a broad
understanding of all other disciplines, because highly specialized experts will one day become
obsolete due to technology developments. Maurice Lé vy, CEO of Publicis Groupe, has stated that
the most important skill required of today’s agencies is “liquid talent—to be able to navigate from
one area to another.”
220
The Rise of In-House Agencies
As marketers navigate through an increasingly complex landscape and scramble to
217
McDermott, “Agency Land Grab for Social Budgets.”
218
Heather Whaling, “Five Trends Affecting Agency Budgets,” Mashable, August 9, 2012,
http://mashable.com/2012/08/09/trends-agency-budgets/.
219
Mary E. Morrison, “Line Between Traditional Ad Agencies, Digital Upstarts Blurs,” Crain’s
Chicago Business, July 21, 2012, http://www.chicagobusiness.com/article/20120721/ISSUE02/
307219997/line-between-traditional-ad-agencies-digital-upstarts-blurs.
220
Brian Morrissey, “Do Agencies Need Chief Digital Officers?,” Digiday, May 9, 2012,
http://digiday.com/agencies/do-agencies-need-chief-digital-officers/.
68
identify the right partnerships, a growing number of them have turned to the simpler and cheaper
solution—an in-house agency wholly owned by the brand company. According to the Association
of National Advertisers, only 32% of its 203 member marketers did not own an in-house agency
in 2013. This is a considerable decrease from 2008, when in-house agencies were nonexistent
with half of those marketers.
221
Although these in-house teams have not yet formed an imminent
threat to the external agency world, some emerging trends from recent years deserve attention.
First, brands are starting to take more ownership of digital marketing initiatives.
According to ANA, more than half of those marketers who own an in-house agency have
assigned tasks in areas of digital, social, and mobile to their own teams instead of external
partners.
222
In fact, ANA’s 2013 “The Rise of the In-House Agency” report showed that 53% of
respondents handled social media creative services in-house and 28% of them handled the social
media portion of the media planning and buying services.
223
These results somewhat corroborate
a 2012 study conducted by The CMO Council about internal marketing teams’ hiring trend—
enhancing social media capabilities continued to be at the top of list for over 550 clients.
224
As
the stakes of social media become increasingly higher for brands’ reputation—and the fact that
real-time marketing requires swift decision making on the go—the ultimate winner of the social
media turf battle seems to be brands themselves. Boston Consultancy Group has advised that
“because of the strategic importance of social media, management of these capabilities should be
ultimately brought in-house.”
225
Indeed, brands like Ford, Nike, and Campbell Soup have all
221
“The Rise of the In-House Agency,” Association of National Advertisers, August 31, 2013,
http://www.ana.net/miccontent/show/id/rr-2013-in-house-agency.
222
Ibid.
223
Ibid.
224
“Marketers Planning Agency Shake-Up,” Warc, December 6, 2012,
http://www.warc.com/Content/News/N30730_Marketers_planning_agency_shakeup.content?PUB=Warc%
20News&CID=N30730&ID=f4a7859f-2b87-486c-ba59-c85a0cdaa435&q=social+media+agency&qr=.
69
taken their social media marketing in-house.
226
A second trend is that brands are taking charge of their strategy direction instead of
having it defined by outside parties. In fact, though cost saving is still the primary rational for
brands turning to in-house agencies, “brand expertise” and “institutional knowledge” are starting
to drive this shift, according to the ANA In-House Agency survey.
227
The study also found that a
staggering 40% of respondents have moved their creative strategy assignments in-house—
assignments which were once delegated to external agencies.
228
Bob Liodice, president and CEO
of the ANA, observed, “What marketers are now finding is they can reach out directly to
Facebook, Google or NBC, and get insights. And we’re seeing sometimes they are going directly
to them for ideas and innovation and creativity.”
229
Owning brand strategy not only gives marketers more control but also more flexibility,
which is increasingly required in the new marketing landscape. Forrester analysts have advised
brand marketers to “favor creativity over durability in partnerships”
230
—restricting brands’
options to the output of a fixed number of agency partners is not conducive to creative
innovations at a time when ideas come from anywhere. Having an in-house agency in place can
therefore allow brands to pick the best idea possible and reshuffle agencies for execution on a
case-by-case basis. In an interview with PRWeek, Antonio Lucio, CEO of VISA who recently
225
Katharine Sayre et al., “Marketing Capabilities for the Digital Age,” Boston Consulting Group,
January 2012, https://www.bcg.com/documents/file96799.pdf.
226
Giselle Abramovich, “Brands Go It Alone in Social,” Digiday, January 4, 2013,
http://digiday.com/brands/brands-go-it-alone-in-social/.
227
“The Rise.”
228
Ibid.
229
Rupal Parekh, “Leaner Ad Budgets Mean More Marketers Rely On In-House Agencies, ANA
Survey Finds,” Advertising Age, September 5, 2013, http://adage.com/article/agency-news/ana-survey-
marketers-relying-house-agencies/243976/.
230
Bradner, Overby, and Wise, “Adaptive Brand Marketing.”
70
merged its marketing and PR departments, said that “the biggest shift is toward doing a lot more
work in-house and owning our narrative, as opposed to delegating it, which was critical.”
231
As in-house agencies become more sophisticated and capable, outside agencies have to
rethink their value proposition and service designs in order to maintain relevance. According to
the 2013 ANA In-House Agency survey, the two biggest challenges facing in-house teams are
creative innovation and keeping abreast with latest trends.
232
These two challenges are no doubt
also the top concerns for agencies who compete to be on the cutting edge of technology. In fact,
quite a few agencies have pioneered a new model where they become the startup incubator and
innovation lab. However, an Ad Age special report at the 2013 SXSW pointed out that models
like this may not prove to be a core competency given the overwhelming rate and volume of
technological advancements these days.
233
Moreover, brands can easily bypass agencies to
cooperate directly with tech startups, just like they do with media companies.
The more profound and longer-term impact of in-house agencies is the transition from a
hands-on to a hands-off approach in solving clients’ problems. Take social media as an example;
as in-house agencies take on executions and day-to-day management, external agencies are more
likely to be valued for strategy counselling. In an interview with Digiday about the future of the
agency model, Neil Robinson, executive creative director at AKQA, former envisioned that
agencies of the future will be business problem-solvers who can identify challenges faced by
clients and invent novel solutions as more clients bring creative talents in-house.
234
In fact, Ad
231
Lindsay Stein, “CMO Q&A: Antonio Lucio, Visa,” PRweek, September 26, 2014,
http://www.prweek.com/article/1314122/cmo-q-a-antonio-lucio-visa.
232
“The Rise of In-House Agency.”
233
John McDermott, “Is There Still a Reason for Digital Agencies at SXSW?,” Advertising Age,
March 13, 2013, http://adage.com/article/special-report-sxsw/a-reason-digital-agencies-sxsw/240314/.
234
Marshall, “New Creative Team.”
71
Age ran a feature on how agencies like Starcom, RG/A, and Ogilvy have been piloting new
practices that resemble the service offerings and compensation models of a typical business
consultancy company like McKinsey and Deloitte.
235
According to David Berkowitz, former
director of emerging media at digital agency 360i, the proliferation of technology solutions
requires agencies’ help now more than ever. “There isn't necessarily one big thing for brands to
focus on but rather diving into what a hundred different people are working on,” he said. “That
requires filtration and curation, and that's precisely where great agencies shine; weeding out the
noise and tuning their clients into what matters for them.”
236
The Collaborative Agency
Though the debates around which party will come out ahead in the competitive agency
landscape seem incessantly heated, a bigger trend in the marketing world indicates that the key to
success today is to embrace a collaborative spirit. “Collaborative economy,” defined by its
evangelist Jeremy Owyang as the “convergence of sharing economy, the maker movement, and
the ‘co-innovation’ movement,”
237
has been gaining momentum in recent years, and its impact is
being felt by the agency world. A reality that must be accepted by agencies is that, despite their
best efforts, no one can claim to offer the “fullest service” possible because of the sheer volume
of options and channels available—there are multiple players that run the gamut from tech
companies to in-house agencies to crowdsourcing platforms. As put by Unilever CEO Paul
Polman, “However well traditional advertising agencies read the signals and recognize the need
for radical change in their capabilities, few agencies can address all the communications needs of
235
Alexandra Bruell, “Agencies Shift into Consulting Role – and Gain New Business,”
Advertising Age, November 20, 2013, http://adage.com/article/agency-news/agencies-shift-consulting-role-
gain-business/245301/.
236
McDermott, “Digital Agencies at SXSW.”
237
Jeremiah Owyang, “Report: Sharing is the New Buying, Winning in the Collaborative
Economy,” Web-Strategist, March 3, 2014, http://www.web-strategist.com/blog/2014/03/03/report-sharing-
is-the-new-buying-winning-in-the-collaborative-economy/.
72
a brand.”
238
Increasingly, clients are demanding that agency partners collaborate with each other to
come up with the best solution rather than fighting amongst themselves to take credit. Leontyne
Green, CMO of IKEA, once remarked, “It is not about competition or an agency owning an idea,
but creating a positive environment in which we do things together.”
239
Target EVP and CMO,
Jeff Jones, also mentioned the importance of cooperation—“Some agencies are uncomfortable
with that [collaboration] and some embrace it because it’s part of their DNA . . . Over time we’ll
work with the ones that embrace it because that’s how we’re working.”
240
This reflects a client-
centric approach that agencies should take to put clients’ best interests at heart instead of their
own budget shares. In fact, John Saunders, EMEA president of FleishmanHillard, has advised PR
agencies to open themselves up for collaboration with advertising and other disciplines, which he
contends is the magic formula for Cannes wins.
241
Indeed, different parties bring their own set of
traditional expertise to the new marketing table, and only by humbly learning from “adversaries”
can agencies grow to become stronger. Hank Wasiak, former chairman of McCaan Erikson and
one of the interviewees, has coined the new phenomenon as agency “collabo-tition”—the
coexistence of collaboration and competition.
242
Another interesting result of the 2013 ANA In-House Survey echoes this trend—more
than half of external agencies view in-house agencies as partners, a drastic increase from only
238
Jack Neff, “Why It's Time to Do Away With the Brand Manager,” Advertising Age,
October 12, 2009, http://adage.com/article/cmo-strategy/time-brand-manager/139593/.
239
Daniels, “Integrated Execution.”
240
Steve Barrett, “Target Marketing,” PRWeek, February 1, 2013,
http://www.prweek.com/article/1276849/target-marketing.
241
John Saunders, “Cracking the Cannes Code,” FleishmanHillard, June 17, 2014,
http://fleishmanhillard.com/2014/06/news-and-opinions/cracking-cannes-code/.
242
Hank Wasiak, interview by Ran Xu, October 20, 2014, appendix of industry interviews.
73
40% in 2008.
243
However, for client-side marketers, it is undoubtedly a challenge to not only
coordinate different agencies and delegate scope of work, but also devise processes and
incentives to encourage collaboration. It is within this context that a new definition of “lead
agency” or “agency of record” came into being. A lead agency is no longer one that owns brand
strategy but rather one that acts on behalf of brands to select, manage, and lead the integration of
a roster of marketing service agencies. This brand agency leader model was in fact pioneered by
P&G and is now being adopted by brands that contribute to almost 80% of the CPG giant’s
sales.
244
The trend led Ad Age to run a special report titled “Collaboration Skills More Important
than Expertise,”
245
in which former chief marketing officer of IPG Mediabrands Gayle
Troberman was quoted saying, “The single most important piece for success for agencies we
work with is actually orchestration.”
The second impact of the collaborative economy is the growing prominence of
crowdsourced content creation, product development, and even strategy mapping. From Dorito’s
“Crash the Super Bowl” ad contest to Ben & Jerry’s pick-the-flavor social campaign, brands have
increasingly tapped the creative power of consumers. In the era of consumer control, the benefit
of crowdsourced campaigns is multifaceted: brands not only show their willingness to listen to
consumer voice and leverage authentic brand stories, but also create an opportunity to turn the
crowdsourcing participants and their multiplying social influence circles into brand advocates.
The positive effect is especially profound among the millennial group, who considers user-
generated content 50% more trustworthy and 35% more memorable than brand-generated
243
“The Rise of In-House Agencies.”
244
Jack Neff, “Marc Pritchard at Cannes: 'We're Sharing What's Behind the Brand,'” Advertising
Age, July 1, 2010, http://adage.com/article/special-report-cannes-2010/marc-pritchard-cannes-sharing-
brand/144780/.
245
Kunur Patel, “Agency Collaboration More Important Than Expertise, Say Marketers,”
Advertising Age, April 14, 2010, http://adage.com/article/special-report-digital-conference-2010/agency-
collaboration-important-expertise/143307/.
74
content, according to a 2014 research paper by Crowdtap.
246
For agencies, this trend encourages
going beyond merely incorporating user participation as campaign tactics—such as hosting a fan-
created Instagram picture contest—to involving consumers in the ideation process. According to
Forrester's 2011 North American Agency Landscape Online Survey, 96% of agencies believe that
they must be more open in their approach to sourcing content, creative, and new ideas.
247
It is
against this backdrop that crowdsourcing marketplaces and online platforms are born—networks
of creative talents and enthusiasts whose ideas, design works, and creative projects are put up for
bid by brief initiators.
On the content marketing front, platforms like Scripted and Contently help brands find
the best-matched writers and visual designers based on each member’s expertise and brands’
particular needs. These crowdsourcing tools undoubtedly pose another challenge to agencies who
simply cannot compete with the wealth and depth of creativity that these platforms can offer to
brand marketers. Faced with this imperative, Victor & Spoils, for instance, has made a name for
itself as the avenger in the open-innovation agency model, letting its network of 7,200 creatives
and strategists take complete charge from setting the tone to deliverables production.
248
According to the firm’s founder, John Winsor, who served as EVP of strategy and innovation at
CP+B before Victor, the advantage of an open innovation agency is that it’s more cost-effective
and time-efficient than the traditional ad development model. By putting what could previously
be copy-testing participants and survey respondents on the creative team, processes become more
246
“Social Influence: Marketing’s New Frontier,” Crowdtap, March 2014,
http://go.crowdtap.com/socialinfluence.
247
Stutzman, “The Digitization of Agencies.”
248
John Winsor, “The End of Traditional Ad Agencies,” Harvard Business Review, May 9, 2013,
https://hbr.org/2013/05/the-end-of-traditional-ad-agen/.
75
circular than linear, which induces cost and lag.
249
This open-innovation model is young but definitely growing, as shown by Havas’
acquisition of Victor & Spoils in 2012. “When an industry goes through a revolution, you can
either sit and watch it happen, or embrace the exciting new business models at the forefront of
that revolution,” said former Havas CEO, David Jones, in a statement at the time of the
acquisition.
250
“Victors & Spoils is one of those new models that is challenging our entire
industry, and I'm delighted to welcome them into the group.” In response, agencies need to
collaborate or co-create with these newly emerged crowdsourcing networks for better creative
output. As put by Garrick Schmitt, former managing director at Razorfish, “Creativity has always
been a social activity and today’s creative agencies are supposed to be hothouses of ideas with
charismatic leaders and collaborative teams.”
251
Chapter Six: Finding the Sweet Spots
Media Relations in the Internet Age
As PR agencies wrestle to break free from the “media relations agency” label, it’s
tempting to underestimate how the Internet, and in particular the mighty search engine, has
granted enormous power to this classic PR practice. According to comScore’s statistics, people’s
reliance on search engines shows no signs of decline, with consumers searching 7% more every
year.
252
In fact, search engines have become a quintessential knowledge pool for consumers who
want to research about products, services, and the companies behind them. Consumers’ reliance
on search engines is so substantial that the influence of search results on their purchasing intents
249
Ibid.
250
Rupal Parekh, “Havas Acquires Victors & Spoils,” Advertising Age, April 3, 2012,
http://adage.com/article/agency-news/havas-acquires-victors-spoils/233895/.
251
Garrick Schmitt, “Can Creativity Be Crowdsourced?,” Advertising Age, April 16, 2009,
http://adage.com/article/digitalnext/tools-technology-force-big-ad-industry/136019/.
252
Whaling, “Five Trends.”
76
and decisions is second only to that of their acquaintances.
253
It’s widely known that search
engines’ algorithms heavily favor earned and owned content, with only 30% of search engine
results being paid media.
254
Moreover, expert content—stories from news outlets and influential
bloggers—usually dominates the first one or two pages of search results. Therefore, in an article
about how PR agencies should adapt to remain relevant in the digital marketing era, Forrester
analyst Darika Ahren pointed directly to Internet searching, which is “the biggest piece of the
interactive marketing pie PR agencies seem to have left just sitting on the table.”
255
Search marketing agencies are surely taking a page out of PR practitioners’ book. Lee
Odden, CEO of TopRank, has talked about such interplay between media relations and search
engine optimization: “I found that our media relations people were pitching stories and getting
links that affected the SEO results—and at the time the link building people were pitching for
links and getting editorial coverage.”
256
This happened because authoritative content on credible
sites not only appears higher up in search results ranks, but it also attracts reposts from multiple
smaller sites—a tactic called “link-building” that’s frequently adopted by search marketers to
achieve better search results. However, the quality and influence of such “links” secured by
search specialists, usually through sampling or compensation, is no match to the story placements
garnered through professional PR outreach. After all, pitching and building relationships with
reporters from major outlets require the journalistic acumen and sophistication that’s specifically
253
Sarah Sikowitz and Cory Munchbach, “Evolve Your Marketing Strategy To Outpace
Consumers' Behavior,” Forrester, March 2, 2015, https://www-forrester-com.libproxy.usc.edu/
Fragmented+PathToPurchase+Demands+Everywhere+Marketing/fulltext/-/E-RES93061.
254
Arto Joensuu, “Changing Context: A Conversation between Search & Social Team at Nokia,”
Slideshare, March 2, 2010, http://www.slideshare.net/arjoensu/conversational-marketing-
3314248?ref=https:// artojoensuu.wordpress.com/2010/03/02/conversations-are-the-new-conversion/.
255
Darika Ahrens, “PR Agencies: Adapt or Die,” Forrester, February 14, 2012,
http://blogs.forrester.com/darika_ahrens/12-02-14-pr_agencies_adapt_or_die.
256
“Lee Odden Discusses the Integration of Social Media and SEO at SES San Jose 2009,” Search
Engine Strategies YouTube Channel, August 11, 2009, https://www.youtube.com/watch?v=Y
xhsBVLmqGU.
77
the expertise of PR professionals. That’s why search marketing expert Eric Ward has advocated
that “all link building strategy development and execution should originate and be managed by
the public relations department or professional.”
257
PR agencies recognize the opinion-shaping power of leading media outlets, yet they
haven’t taken their unbeatable media relations expertise and made it into a full-blown search
engine marketing service package. As suggested by Rishi Dave, former director of digital
marketing at Dell, it is via those news outlet articles that consumers discover new products or get
introduced to new offerings of an existing brand. In Dell’s case, the brand utilizes media coverage
as a springboard to invite prospects into their owned media destinations, where the brand can then
have direct interactions with consumers.
258
Steve Burkhart, managing director of the Hoffman
Agency, wrote a feature piece in O’Dwyer’s Magazine encouraging PR firms to bolster their
search marketing technical skills such as keyword design and analytics to capitalize on their
natural advantage in SEO.
259
According to a 2014 Nielsen study examining the influence of
content in the consumer decision making journey, expert content is found to be more effective
than user reviews and branded content in all phases of the consumer decision making process; the
persuasiveness of expert opinions also increases with the price of the product.
260
This finding is
corroborated by another study by Accenture exploring CMOs’ insights in 2014—5% and 8%
more CMOs consider media coverage to be a more effective channel to reach and influence
257
Eric Ward, “Links, Link-Building and Public Relations” (presentation, Search Marketing East,
September 16, 2010).
258
Rishi Dave, “Why Investing in Content Should be the #1 Priority of Every Marketer”
(presentation, Content Marketing Summit 2013, New York, NY, September 18, 2013).
259
Steve Burkhart, “PR Should Lead the Charge for Organic Search,” O’Dwyer’s 28, no.11 (Nov
2014): 10, http://www.odwyerpr.com/magazine/odwyers-magazine-november-2014.pdf.
260
“The Role of Content in the Consumer Decision Making Process,” Nielsen, March 2014,
http://cdn2.hubspot.net/hub/391049/file-987508079-pdf/Nielsen_inPowered_FINAL.pdf?
t=1413919623141.
78
consumers than branded content and social media, respectively.
261
PR and the Bottom Line
Word of mouth through friends’ recommendations, community voices, and third-party
endorsement is arguably the most effective communication method of all. Oddly enough, the sole
discipline entirely dedicated to this principle—public relations—receives only a small fraction of
the marketing budget. Part of the budgeting disparity is caused by advertising agencies
dominating the strategy-setting roles for brands; however, the fundamental reason for the
inequality is that marketers, though fully aware of the benefit of word of mouth, are simply not
comfortable with allocating funds to programs in which they cannot guarantee outcomes and
clarify return on investment. That’s why PR is often referred to as a work of art, whereas
advertising is based on solid mathematical modelling that can precisely predict impact.
The rise of social media and the pressing need for securing online word of mouth has put
PR’s age-old measurement conundrum in front of other marketing service providers as well. As
Altimeter’s analysts summarized, “For brands, earned media is the most elusive and difficult;
while it can be influenced, it cannot be directly controlled.”
262
While successful campaigns by ad
agencies have heavily leveraged on the power of word of mouth, such as W+K’s Old Spice
YouTube campaign, a persistent puzzle plaguing the ad guys is “how to scale, routinize and turn
these ‘one-offs’ into a manageable science,” as put by Joe Mandese, editor in chief of
MediaPost.
263
Josh Spanier, marketing director of global media at Google, further adds that “if we
261
Baiju Shah, Glen Hartman, and Brian Whipple, “CMOs: Time for Digital Transformation or
Risk Being Left on the Sidelines,” Accenture, accessed January 5, 2015, http://www.accenture.com/
SiteCollectionDocuments/us-en/insight-cmo-digital-transformation-summary/Accenture-CMO-Insights-
2014-pdf.pdf#zoom=50.
262
Lieb and Owyang, “The Converged Media Imperative.”
263
Joe Mandese, “Point Of View: People As Media,” Warc, accessed January 4, 2015,
http://www.warc.com/Content/ContentViewer.aspx?MasterContentRef=7fb66103-1b55-4374-9e9b-
36efbc723a52&q=influencer+strategy&CID=A93188&PUB=ADMAP.
79
can figure this one out, we can reset the way advertising works for the next 10, 20, 30 years.”
264
After all, fostering goodwill and positive word of mouth is about building human connections
rather than buying media slots; to some extent, it can never be programmed like advertising can.
Marketers almost unanimously base their budget allocations on ROI of marketing
programs, and the only way for PR to gain a bigger marketing share is to prove its value the same
way advertising does. Richard Edelman emphasized at the 2011 PRSA Leadership Rally that
business “bottom line” should determine PR measurements—“Don’t weigh your success on the
basis of media impressions; we have to be evaluated on selling the product.”
265
His view is
echoed by former chairman and CEO of Hill & Knowlton, Paul Taaffe: “The biggest thing PR
agencies must do is show some kind of planning and measurement capability. Once marketers get
comfortable with social media, they look to apply the normal rigor they put all their marketing
programs through.”
266
Strides have been made in recent years by both in-house professionals and agencies to
demonstrate quantifiable contribution from PR to tangible business results, with the most
prominent example being incorporating PR in the marketing mix modelling (MMM). According
to a resource paper from the Institute for Public Relations, MMM is “an analytical approach that
identifies and quantifies the marketing elements that impact marketplace behavior and is used to
explain historical results and help predict future outcomes by focusing on probabilities and trends
based on a number of variable factors.”
267
It wasn’t until 2005 that public relations was
264
Ibid.
265
Woodward, “Richard Edelman.”
266
Daniels, “PR Firms Still Seek.”
267
Mark Weiner, Liney Arnorsdottir, Rainer Lang, and Brian G. Smith, “Isolating The Effects of
Media-Based Public Relations on Sales: Optimization through Marketing Mix Modeling,” Institute for
Public Relations, June 2010, http://www.instituteforpr.org/wp-content/uploads/OptMarketing
MixModeling.pdf.
80
introduced to the marketing mix world by P&G’s then global external affairs officer, Charlotte
Otto. Using a pilot system called PREvaluate that applies data about media coverage into
marketing-mix models, P&G was able to prove that PR had a higher return on investment for four
out of the six brands analyzed than any other medium or marketing tool.
268
As marketing evolves and is led by digital practices, advanced marketing mix modelling
is also able to evaluate the ROI for non-traditional media such as social media. In fact, a growing
number of marketers—especially consumer goods companies that have big research budgets—
have adopted marketing mix analytics to drive precise budget allocation. In a measurement
roundtable hosted by PRWeek, Marguerite Marston, commercial PR manager at IKEA, expressed
how the implementation of marketing mix modelling has validated her department’s contribution:
“Amazingly PR ranked in the top three of the different marketing efforts that gave back results to
sales.”
269
Similarly, Mazda has built its proprietary analytics tool based on the marketing mix
concept to determine planning and budgeting. According to Mazda CMO, Russel Wager, in an
interview with PRWeek, the model will also incorporate other activities such as PR, event
sponsorships, and experiential marketing.
270
Some agencies have proactively developed proprietary analytics systems aimed at
cracking the code of assigning a dollar value to earned media. Ketchum, for instance, has
partnered with its Omnicom sister market research agency The Modellers in a series of research
services that help clients “clearly see the value of PR alongside other marketing disciplines with
this new approach to market-mix modeling, which more accurately measures the true impact of
268
Jack Neff, “Bottom Line on PR: It Works, Says P&G,” Advertising Age, November 7, 2005,
http://adage.com/article/news/bottom-line-pr-works-p-g/105116/.
269
Gideon Fidelzeid, “Measurement Roundtable: Useful information,” PRWeek, October 1, 2013,
http://www.prweek.com/article/1274489/measurement-roundtable-useful-information.
270
Lindsay Stein, “CMO Q&A: Russell Wager, Mazda,” PRWeek, December 31, 2013,
http://www.prweek.com/article/1273763/cmo-q-a-russell-wager-mazda.
81
PR on marketing.”
271
In a similar vein, Weber Shandwick introduced Arrow Measurement Suite,
an integrated research service composed of a variety of cutting-edge business tools and
methods—including marketing mix modelling—to help clients demonstrate better ROI.
272
Some media agencies that’ve always been adamant about measured planning and
distribution have been experimenting with novel solutions to the earned media puzzle. Mindshare,
for example, has been developing systems that can assign reach and frequency metrics—common
metrics used by paid media vehicles—to earned media so that it can be planned in coordination
with other media channels.
273
At last year’s South by Southwest festival, media planners gathered
around to talk about “The Science of Predicting Earned Media.” According to panelist Kate
Sirkin, EVP of research at Starcom Mediavest Group, “There is sufficient empirical evidence to
help codify the best practices into algorithms and planning tools.”
274
In fact, an earned media
planning process called “Contagion” is already up and running amongst Publicis’ media planning
and buying practices to set benchmarks and calculate outcomes of earned media activities.
275
The Channel-Agnostic Agency
With digital technology progressing at an ever-accelerating speed, there will be an
increased number of innovative platforms and novel channels through which brands can connect
with consumers. Attempting to grasp each and every one of these new mechanisms once they
271
“Ketchum Partners with The Modellers to Offer PR Analytics,” Ketchum, March 21, 2011,
http://www.ketchum.com/nb/news/ketchum-partners-modellers-offer-pr-analytics.
272
“Weber Shandwick Launches Arrow Measurement Suite, Takes PR from Rear-View Reports to
Real-World ROI,” PR Newswire, February 17, 2009, http://www.prnewswire.com/news-releases/weber-
shandwick-launches-arrow-measurement-suite-takes-pr-from-rear-view-reports-to-real-world-roi-
65739762.html.
273
Morrissey, “Traditional Ads.”
274
Katrina Melesciuc, “‘The Science of Predicting Earned Media’ at SXSW,” Visible Measures,
March 14, 2014, http://www.visiblemeasures.com/2014/03/14/the-science-of-predicting-earned-at-sxsw/.
275
Ibid.
82
come out is certainly laudable, yet agencies run the risk of inundating themselves with a myriad
of executional tactics rather than ideas. That’s why discussions about being “agnostic” have been
developing, on both client and agency sides, as to the future of consumer marketing. Terms for
this agnostic approach vary from “channel-agnostic” to “media-neutral,” yet they all point to a
common philosophy best summarized by Steve Schildwachter, former executive VP of
DraftFCB—“Communications planning that favors no medium, channel or discipline over
another, until a proper analysis or strategic exercise helps determine the best ways to engage the
right consumer.”
276
In fact, “communications planning” is not new in the advertising and marketing world.
P&G introduced the concept back in 2004, and was followed by Unilever, to encourage a
discipline- and solution-neutral planning that “puts the customer first and does not seek to protect
revenues specific to any one discipline or agency.”
277
Ironically, such planning assignments were
usually handled by media buying agencies notorious for their heavy bias towards television
advertising, from which they receive lucrative kickbacks. The rise of social and digital media,
alongside the demise of traditional media, has propelled agencies of different types to revisit
“communications planning” as a core agency function. As put by Antony Young, renowned
media executive who has held top positions at both Mindshare and ZenithOptimedia,
“Communications planning needs to go much further than where it is today, going beyond
dealing with only paid media to plans that also integrate owned and earned media.”
278
Bill
Tucker, former CEO of Publicis Groupe’s MediaVest, also envisioned that media agencies of the
276
Steve Schildwachter, “None of Us Are ‘Media-Agnostic,’” Ad Majorem Blog, 25 March 2010,
http://admajoremblog.blogspot.com/2010/03/none-of-us-are-media-agnostic.html.
277
Jim Taylor, Space Race: An Inside View of the Future of Communications Planning (West
Sussex: John Wiley & Sons, 2005), 6.
278
Antony Young, “It's Time to Put Communications Planning Back on Agencies' To-Do List,”
Advertising Age, February 09, 2011, http://adage.com/article/media/put-communications-planning-back-
agencies-list/148770/.
83
future will “develop digitally centric, media-agnostic talent who can architect those experiences
across the full gamut of paid-, earned- and owned-media opportunities.”
279
Deanie Elsner, chief marketing officer at Kraft Foods, once said that “creative agencies
are still focused on ‘big glitzy’ TV campaigns,” and producing in an agile and media-agnostic
manner “is a very big contextual difference from where we are today.”
280
Digital agencies also
tend to restrict themselves by thinking in terms of only the shiniest technological products and
tools, while the end goal is to make deeper connections with consumers regardless of the
platforms required. Clients’ growing preference for channel-agnostic solutions undoubtedly drove
agencies to develop and promote such expertise. Ad Age has reported that MetLife replaced its
creative lead Young & Rubicam with Crispin Porter & Bogusky because the latter has
demonstrated capability in the media-agnostic approach.
281
In the case of Unilever, the consumer
products giant picked a small startup agency over its bigger agency partners for an assignment
that requires nimbler channel-agnostic methodology.
282
In fact, the trend of going agnostic has
given rise to quite a few up-and-coming agencies; they brand themselves as embracing a
completely new agency model—channel agnosticism—as exemplified in media strategy agency
Naked Communications
283
and creative shop Mother New York
284
.
279
Bush, “Media Agency of the Future.”
280
E.J. Schultz, “The Great AOR Debate: Kraft, Mondelez Have Different Views,” Advertising
Age, July 17, 2014, http://adage.com/article/cmo-strategy/great-aor-debate-kraft-mondelez-views/294145/.
281
Rupal Parekh, “MetLife Shifts U.S. Creative from Y&R to Crispin,” Advertising Age, October
29, 2010, http://adage.com/article/agency-news/advertising-metlife-shifts-creative-y-r-crispin/146792/.
282
Jack Neff, “Unilever Goes Small: a Warning to Big Agencies?,” Advertising Age, June 20,
2011, http://adage.com/article/agency-news/unilever-turns-roth-partners-channel-agnostic-promise/228288/.
283
Creamer, “Future of Media Agencies.”
284
Teressa Iezzi, “Mother Births New Model for 'Mass Roots' Marketing,” Advertising Age,
September 28, 2009, http://adage.com/article/agency-news/ad-agency-mother-births-model-mass-roots-
marketing/139290/.
84
The more clients become discipline-neutral, the bigger chance there is “for PR to step out
of the marketing mix shadows,”
285
as observed by MSL Group CEO Olivier Fleuro. Once
marketers break their inertia of resorting only to advertising firms for creative thinking, PR
agencies will be able to gradually stake their claim as idea generators. In fact, PR ideas can be so
versatile that they can be flexibly adapted to media and advertising programs. For instance, it was
IKEA’s PR partner Ketchum who put forward the initial concept for the brand’s Effie Award-
winning “Life Improvement Store” campaign; the idea was developed later on in an integrated
online and offline program by Ogilvy & Mather and media agency MEC.
286
Similarly, the brand
transparency social media campaign “Our Promise” from Johnson & Johnson was based on a
video production idea by PR firm RF Binder.
287
For Edelman, the giant has gone a step further to
even take charge of rolling out a TV spot based on a PR idea adored by one client.
288
Most significantly, PR agencies are best poised to claim genuine channel agnosticism
rather than merely labeling themselves as such for new business purposes. Tim Williams, widely
published writer and founder of agency business consultancy Ignition Consulting Group, wrote a
piece titled “Why Advertising Agencies Will Become More Like PR Firms.” In the article,
Williams contended that PR professionals are the “original ‘media neutral’ media executives”
because they would not prioritize traditional paid advertising. He further pointed out integrated
campaigns that span across paid, earned, and owned media are more likely to be driven by PR
285
Olivier Fleurot, “An Agency for A Complex, Fast-Paced, Digital World,” Advertising Age,
September 1, 2012, http://www.prweek.com/article/1278205/agency-complex-fast-paced-digital-world.
286
Hannah Seligson, “Quantum Leap,” Adweek, March 18, 2013, http://www.adweek.com/sa-
article/quantum-leap-147912.
287
Jack Neff, “Johnson’s Baby Turns to Social-Media Transparency to Woo Millennial Moms,”
Advertising Age, July 30, 2014, http://adage.com/article/cmo-strategy/j-j-social-media-transparency-woo-
milliennials/294376/.
288
Gideon Fidelzeid, “Collaboration Roundtable: Concerted Effort,” PRweek, January 5, 2015,
http://www.prweek.com/article/1327703/collaboration-roundtable-concerted-effort.
85
instead of advertising.
289
Paul Holmes, publisher and CEO of the Holmes Group, has advised PR
agencies of the future to embrace the channel-neutral philosophy. According to Holmes, unlike
advertising or digital agencies—whose outputs are heavily reliant on specific channels—“PR is
not a channel, or a medium, or a vehicle; it’s a process.”
290
However, he warned that PR agencies
that reduce themselves to just media relations experts are bound to find media neutrality difficult.
In fact, the trend discussed in earlier chapters concerning PR agencies branching out to
other expertise areas and diversifying their talent pool is driven by the goal to deliver channel-
neutral works. Dave Senay, Fleishman-Hillard’s president and chief executive, has asserted that
the aim of the PR behemoth’s rebranding and restructuring is to be “channel agnostic.”
291
In May
2013, PR Daily ran a feature story titled “Channel Agnosticism: The Next Wave for PR
Agencies?” A senior agency executive quoted in the article commented that “lots of agencies are
already doing what Fleishman-Hillard is doing”—that is, striving to solve communications
problems regardless of the tools and channels required, whether through partnerships,
outsourcing, or developing internal capabilities.
292
Chapter Seven: Recommendations
Public relations as an approach, a process, and a philosophy of solving communications
challenges has undoubtedly come out on top. There has never been better timing for PR agencies
to fully capitalize on all-around recognition for their innate expertise. However, PR firms also
289
Tim Williams, “Why Advertising Agencies Will Become More Like PR Firms,” Ignition
Consulting Group, April 18, 2011, http://www.ignitiongroup.com/propulsion-blog-post/why-advertising-
agencies-will-become-more-like-pr-firms/.
290
Paul Holmes, “Ten Ways to Design the PR Agency of The Future,” Holmes Report, May 13,
2013, http://www.holmesreport.com/long-reads/article/10-ways-to-design-the-pr-agency-of-the-future.
291
“FleishmanHillard Unveils Newly Refreshed Brand,” FleishmanHillard, May 1, 2013,
http://fleishmanhillard.com/2013/05/news-and-opinions/fleishmanhillard-unveils-newly-refreshed-brand/.
292
Matt Wilson, “‘Channel Agnosticism’: The Next Wave For PR Agencies?,” Ragan’s PR Daily,
May 1, 2013, http://www.prdaily.com/Main/Articles/Channel_agnosticism_The_next_wave_for_PR_
agencies_14376.aspx.
86
cannot escape the challenges faced by their marketing service agency counterparts in the new
communications norm—until an agency equips itself with comprehensive knowledge in the
dynamics of today’s increasingly converged media landscape, it will not be prepared to lead
brand marketing initiatives. The following propositions address current issues in the industry:
1. Approach clients’ problems from a holistic marketing communications perspective
rather than a media relations or publicity standpoint.
2. Keep the core PR tenet in mind, but learn to speak like the chief marketing officer.
3. Hunt for the talents whom your agency competitors—not just fellow PR firms—go
after.
4. Use data and analytics to inform decision making and prove the value of your work.
5. Apply the same rigor you have when working with reporters to connecting with
consumers.
6. Strive to be a know-it-all consultancy instead of a do-it-all activation shop.
7. Develop in-house resources that complement your core competences but leave
ancillary responsibilities to strategic outside partners.
8. Weave media relations—and everything else that traditional PR offers—into bigger
integrated campaigns rather than offering it as a standalone service.
9. Make your social media, influencer marketing, and content marketing programs the
best and the most famous.
10. Be aggressive and outspoken about your ideas and accomplishments.
87
Conclusion
In the midst of marketers revisiting their traditional marketing approaches and
reevaluating their service partners, various types of agencies will benefit now that all have an
equal footing in being considered as brands’ new strategic advisors. Forrester analysts foresee
that agencies of the future will be “value exchange mediators” who are able to strike the right
balance between serving consumers and fulfilling business aims by strategically leveraging
different types of expertise in strategy planning, creative development, and technology and media
solutions. Among these mediators, analysts see PR firms fitting squarely in the type called
“audience engagers.” According to their definition, “Audience engagers will escape the mass-
marketing campaign approach and transcend direct/database marketing's segmentation focus to
carry on conversations over time through continuous content.”
293
In this new agency model predicted by Forrester, PR firms are lumped together with
consumer relationship management or direct marketing firms under the same category of solution
provider—again raising the question about how agencies should position themselves if the
services they provide are no longer exclusive. It is yet to be seen what the agency landscape will
morph into, but the conventional division of agencies into advertising, PR, media, and digital will
likely persist for a while. Despite PR agencies’ recent rebranding efforts to call themselves
“engagement” agencies, “total communications” agencies, or even “marketing and PR” agencies,
“PR agency” gives potential clients the most straightforward and clearest idea about what the
organization does. This does not mean that the PR label will continue to overshadow agencies’
remarkable progress in grasping the whole spectrum of modern marketing communications. On
the contrary, by gradually building a reputation through the works and ideas PR agencies
produce, “PR agency” is bound to have a renewed meaning in clients’ minds.
293
Jim Nail, “The New Interactive Agency Landscape,” Forrester, July 17, 2013, https://www-
forrester-com.libproxy.usc.edu/The+New+Interactive+Agency+Landscape/fulltext/-/E-RES73981.
88
Instead of obsessing over agency rebranding or restructuring or even outmaneuvering
competitors, agencies should focus on delivering stellar work on each and every project by
putting clients’ best interests at heart and offering objective counsel. After all, the great marketing
paradigm shift is ongoing and perhaps never-ending; the best weapon agencies can have is an
open mind about the endless possibilities lying ahead for them to become better agency partners.
89
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Appendix: Industry Interviews
Industry Interview: Hank Wasiak
As former Vice Chairman of McCann Erikson Worldgroup, Hank Wasiak is an advertising
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industry veteran with a wealth of experience counselling top global clients such as Nestle, J&J,
Sony, and Bacardi. He also co-founded Cannes award-winning creative boutique Concept Farm.
Wasiak now serves as director of the national board of American Heart Association.
Interview Questions and Answers:
How do you see different types of agencies stand in today’s digital and social landscape?
Agencies have always been to understand the psyche and motivation of consumers, but now what
we have with social media and digital is that it’s on-going, it’s all the time. So traditional
consumer research has been built on surveys, focus groups, one-on-one contact, occasional online
surveys. But now we’re so tied up in social media that there is whole other business that agency
should be doing – it’s the listening business. There are a number of platforms as listening
dashboards where agencies monitor the conversations that’s going on out there and do work
based on that. So that’s changed, and I think PR has been ahead of the agencies on that in general.
PR agencies are ahead of ad agencies in terms of creating content that is naturally put into the
streams of conversations for consumers. They will sometimes butt heads in the execution of
content marketing strategies. However, where ad agencies still have strong hold is in brand
strategy, brand positioning, and being the lead strategic thinker on businesses. But where PR
agencies are really stepping out is in that in the listening, monitoring and the conversation area.
At PR agencies, content is looked at as a newsroom mentality, and PR agencies are like that, they
understand how to operate as a newsroom for their clients and brands. Other agencies are just
catching up on that.
Can PR be the strategic brand lead one day?
You might be able to. My answer to that is to earn it. And to not get into a turf war. To change the
perception of CMO and hiring agencies to think of you that way. Collabo-tition (collaboration
and competition) is what the marketing world is going today, you have to have a mindset like that
to put together like-minded collaborators. We encourage ourselves to think like that every day.
And But AOR in general is disappearing and less of a religion in the client business, especially in
major packaged goods company.
I don’t think PR agencies think about big ideas, they think about big executions. If I were a PR
agency, I’d be fighting for the seat at the strategic table, to be the consumer-facing agency. I
would model what Edelman has been doing. They wanted to buy the creative thinking part of an
ad agency. Instead of buying one, you need to hire those kind of big idea people, bring them in.
This would make PR more strategic.
What do you think are marketers’ greatest concerns today?
Keeping up with the consumers. The need to master digital and to understand how these nice little
pieces of puzzle fit together. Things are moving in fluid, so they need to have their organization
more geared towards that. CMO used to be pretty settled into advertising and promotion, they
rarely do PR and sometime events. They were enemies with CIO or CTO. But with everything
morphed together, they need to have an organization fluid and flexible enough to do that.
Clients are extremely frustrated with managing agencies and resources, they haven’t come up
with the right agency combination. They know they can’t get one to do everything, but to get all
to work together, there is long way to go. With so many things going on, I need to make sure that
I’m not paying this one to do the same thing that the other one is doing. Some companies are
saying I want to take in house, for instance social media monitoring, Coca Cola and Gatorade,
they all have digital command centers.
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How have agencies adapted themselves so far in response to these concerns?
Agencies realize that you can’t do it all. So that’s where the collabo-tition comes in. Focusing
themselves on where they can help clients best, their strength, where they can do best with
consumers. Some agencies like W+K adapt pretty well, they do traditional advertising very well,
and they do TV better than anybody. They know how to take that thinking to digital, some of the
most viral videos have been though W+K and not digital agencies. They move digital and
traditional together in powerful way. Every agency now is digital, but digital agencies have a
little hard time keeping up with the traditional stuff.
Do you think full-service is where agencies are going towards?
Full-service doesn’t necessarily mean they do everything. Full-service means that we manage and
direct it all for you, but we don’t do it all. Today, agencies need to have a 360 degree view of the
consumer, they have to be able to think about the idea, and how the idea is going to impact
consumers in every point of the path to purchase. They are in the content business these days, you
create the idea, the strategy, and the platform, but sometimes other people can execute it better
than you can.
The agency should lay out the whole landscape, work with client partners, decide who should do
what, and who do best. For instance, at Concept Farm, we don’t do media or PR, but we lay out
the strategy first and rely on our partners whom we call a collective to deliver that strategy.
What do you think agencies of the future look like?
Holistic-thinking agency. They are the ones that are totally focused on the consumer. In the past,
they’ve been focused on understanding and appealing to consumers, in the future, they’re going
to be good at conversation, how to talk to them. Agencies that are good at telling brand stories, so
that it’s the story of the brand that goes across different platforms. And they must be digital and
tech-savvy. Collaborative agencies that that collaborate across any and all aspects of client
businesses to market to consumers.
Industry Interview: Daryl McCullough
Daryl McCullough is currently the CEO of North America and Chairman of Citizen Relations
International, formerly PainePR where he started more than two decades ago. Daryl was named
"PR Professional of the Year" by the Public Relations Society of America, Los Angeles Chapter,
in 2009. Under his leadership, the team was crowned 2012 North America Mid-size Agency of
the Year and Global Consumer Agency of the Year by The Holmes Report.
Interview Questions and Answers:
Ad agencies have long dominated brand strategies, do you see PR taking on that role soon?
It’s still very much the case these days. But when it comes to the ideas for experiential programs,
the activation, the influencer part, and the social engagement and community management, that’s
where PR comes in. In Citizen’s case, we don’t have in-house creative or media people, but we
work very closely with our sister advertising and digital agencies to deliver integrated campaigns
when needed.
There are individual campaigns where we do lead. For instance, the ad campaign New York
Tough developed for P&G to target urban consumers, is entirely our idea and our execution. It
has print ads on buses and subways, as well as video content in which we hired Michael Che from
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“Saturday Night Live” to interview people on the streets.
Generally we don’t have the marketing dollars they have, sometimes we are not as bold as to be
promoting themselves. The irony is that we probably do more paid and owned media work than
they do.
What are the major challenges facing PR agencies nowadays?
The competition for the role and the work now includes everybody. Ten years ago, we only
competed with PR agencies; now there are digital agencies saying they can do what we do, we are
saying we can do what they do. So the competitive set is different every time we go into meetings
with client. It’s changed how we promote ourselves.
How should PR agencies differentiate ourselves?
Many clients still do need the value of traditional PR. We don’t want to walk away from that
completely like some has. We know the value of news and earned publicity, and we are famous
for just delivering massive program. That still works and works in big way. We want to be
famous in both worlds.
What are some of the major changes that have taken place in your agency?
We’ve created an open business model where there are no profit centers among all of our teams.
So we are able to have one client profit center for each program or each client. And then we can
bring in the best team, either from New York, or from Toronto, or from Miami, or LA, to work on
that program without competition. And that’s brought the quality of interaction and collaboration
really high. So we use that same model when we bring in our planners, creative and digital teams
from our sister agencies, we bring that in with one client profit center in mind. So we are not
competing for the businesses. It’s a major structural advantage that a lot of agencies, even though
they say they’ve changed their model, they still operate in very traditional way. Our model is very
non-traditional and it’s been very successful.
We’ve also collapsed a lot of our titles, so we have a senior strategist, a leadership level team
member, as well as an activation level team member, such as account service manager with five
to ten years of experience. So we have very senior people working on the businesses unlike other
agencies that have many titles. Fleishman has a lot of people with just zero to two years of
experience working on your business, even though they say have a new model, but they have a lot
of junior people who don’t have much experience. We know our experienced people would be
more strategic but also more creative and deliver better work. It helps us collaborate nicely with
other partners, both internal client partners as well as other agencies. Because they have
immediate respect for senior people, and it’s very important in that integrated model.
What’s your take on the full-service versus specialist agency model debate?
There would still be specialist, but they would be working with other discipline specialists. They
need to be open in the era of collaboration. We work with some of the largest brands, and they are
usually the leaders and others would follow. You know a client would take social media from
advertising and, give it to PR. Another day, they would take it from digital and give to PR.
What do you think agencies of the future look like?
Open environment, real-time analytics to monitor and track and respond to opportunities in real
time, much like the real time-bidding in advertising. Immediate response is more important than
ever before. Further integration of paid, owned and earned media, and planners and creative.
Unlike traditional ad, or PR, or digital agency, it will be a hybrid.
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What do you think are marketers’ greatest concerns today?
Everybody wants their brands to be successful, but they don’t have the budget that they used to
have. So they’re trying to do a lot more with a lot less. And that’s the biggest struggle. They are
very envious when they see a brand break through with something that doesn’t look like it cost
much, i.e. a simple video execution that went viral. Clients want that kind of simple campaigns
that go massive. We think about that all the time. With PR and influencer marketing, we add
elements along the way to make it massive by methods, not by wishes. We can guarantee that if
we build influencer recommendations, and the right advocacy along the path, that a people will
like and share, and it will be massive.
Industry Interview: Jeff Sweat
Jeff Sweat is the Director of Communications at 72andSunny and was formerly communications
director at Deutsch LA. Coming from a business and tech journalist background, Sweat served as
director of b2b marketing and social media at Yahoo for four years prior to joining the ad world.
Interview Questions and Answers:
Do you think advertising, PR, and all the other marketing disciplines are getting fully
converged?
I don’t think it will ever be a day when it’s fully converged, not so much because it should not, I
think it should be, I think people are human, and so people are going to hold on to their best stuff
People have different expertise, and that can still be valuable at times, I think for us, like any
work we do, with social and PR built in. I think the market will reward people who are able to
bring it together.
What keep marketers at night these days?
The biggest one is how to break through the clutter, there are a lot of ways to people to consume
media, frankly a lot of distractions. And it sort of all comes down to the number of channels, the
number of ways that people can learn about things. Now, you can’t say that you buy media on
one of the three networks, and hope that it reaches people. You know channels are so fragmented.
We try to build in PR strategy into our campaigns. There is a simple reason for that, which is that
increasingly, advertising and marketing ideas are designed to be talk about, but I think often that
making something that is talk-worthy is enough, you have to often build something ways for
people to learn about the products. So basically you have to build in the talk-value. So I think any
marketing idea would not be complete without a way to activate in social media and PR.
Do you think there is a direct competition between ad and PR agencies in the digital and
social media age?
I think where we are most valuable is knowing the intrinsic PR value of the work we are doing,
which is to understand what it is about the brand that needs to be communicated. I think PR
agencies have a huge amount of understanding of the media landscape and a lot of equity and
relationships they build there, and it’s tough for that to go away, and I think it’s tough for like an
ad agency to like completely take over that. But I think we do have the ability to kind of create a
unified strategy that would touch on advertising, and social and PR. Whoever actually executes
that, is actually another story, and that would depend from agency to agency. But I think there is
tremendous opportunity for ad agencies to make sure that they help set the overall strategy.
Ad agencies have been the brand strategy lead for a long time, do you think that leading
position is going to be change any time soon?
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I think brand strategy is something that lives naturally within an ad agency. Like72andSunny and
any modern ad agency, they have a deep understanding of where the company wants to be in
front of consumers, and the best way to get there. I think one of differences between advertising
versus PR agencies, is that PR agencies are meant to primarily connect to the press, which filter
the message to ultimately the audience. But the advertising agencies are designed to connect
directly to the audience. So I think by definition, and by requirement really, they must have a
good understanding of what the brand strategy should be. So that’s something that an ad agency,
at least for a full-service kind of agency, to be good at that.
Have you noticed any substantial changes among the ad world in terms of business model
and organization structure?
There’s always talk about that. I think the ad agency model has remained pretty much unchanged
since the 60s, which was pretty much the invention of the modern ad agency. I mean there is a
reason why, if you look at the advertising business, and you look at Mad Men, that looks a lot like
our world, and that was a long time ago. So there’s plenty reasons to reinvent too, but I think
people have never quite felt that, or that people have never been successful about that. You get
like Victor & Spoil who does crowdsourcing advertising, and there’s definitely a way to go.
You’ve also got people who have one of the more common theme of the past, like five years ago,
that agencies need to be creating more stuff of their own, and more intellectual properties that
they own.
I think the 72andSunny model is different from many of our counterparts, in that we’re much
more collaborative within the walls and with our clients. So that actually breaks down the
divisions that have historically kept different parts of the agency apart. So I think the part about
reinvention that matters most is in creative collaboration.
In your experiences in the communications side of the advertising business, do you a
growing importance in earned media?
We’ve always got the assumption that earned media is the starting point for things, there’s a lot of
focus on earned media increasingly, as like the most important metric. So I think earned media
has been important for advertising people because the way of getting more bang for your money,
because you are not paying money for those shares, but it’s sort of counted as a more valuable
metric. I would say that earned media places a huge role in modern advertising.
It’s really tough to think any modern successful campaign examples that don’t rely on have any
earned media component, that doesn’t’ count on that.
Have this importance translated into any tangible structural changes within ad agencies?
I think it’s less useful to have like an earned media group than it is to build into part of everything
we do at agency. There are definitely earned media and social media practices at some agencies,
where that comes in though, is more tactical. It’s like you can build ideas that are meant for
social, but when it comes running a social account or community management, it tends to be a
group of people that just focus on creating social content, tweet, Instagram, and vine. I think
that’s important, and you’ll definitely see that in agencies, and it’s not impossible to set
something up there. But I think the most important thing for any agency is to have people who
inherently understand social media and make it part of what we do. I don’t feel like having a
separate practice alone is necessarily a huge requirement.
How do you see ad agencies and PR agencies compete for social media assignments?
There has been an interesting move in recent years. Social media from something that’s primarily
108
owned by PR agencies sand social agencies, to one that’s more driven by ad agencies. I think
that’s a pretty big trend, I think there is a pretty big reason for that. I think social media has
moved from text-based content like tweets, Facebook post, and that kind of stuff, to fairly
complex media. You’ve seen a lot of images, visuals, and that’s the kind of thing. I think the
social media you used to think have been pretty much commoditized. With any good writer who
understand the brand voice and to create a good Twitter account, I think there is not the part that
you need to worry about, like how to create great content. It’s about how to pass along, the
shareable stuff, and for that ad agencies have a long history of doing that. I think it’s like a natural
progression, for ad agencies to be very involved in earned media content. And I think PR
agencies would probably struggle more over that. Because they don’t historically have people on
board who know how to do that, doing visuals and directors and that kind of stuff.
Industry Interview: Alexandra Bruell
Alexandra Bruell is the lead agency reporter at Advertising Age. She has covered extensively
about industry news in digital, media buying and planning, and PR. Coming from a public
relations background, Bruell was senior editor at PR Week before joining Ad Age.
Interview Questions and Answers:
Do you see one particular type of agency, for instance PR, dominating social media
assignments?
I think it’s really hard to say if PR, or any agency, is dominating. Because we’ve seen creative
agencies doing social media campaigns, media agencies doing social buying, and digital agencies
laying out strategies and all that, but I do see specific areas where there will be more competition
in the future. The first is in the listening and monitoring, and using technologies and analytics
tools to drive insights. This is where all agencies can have a part. Another area is in the social
platforms and buying inventories that those audiences would see. I think at this point it’s really
tough to say, that one agency is dominating social buying.
And the third part of social that is sort of up for grab, and it’s too soon to say who wins, is social
content. Agencies that are creating videos, or images, or just copies for social media platforms as
a part of larger campaigns, we’re seeing creative agencies doing more of that, we’re seeing PR
agencies doing a ton of that, and we’re seeing media planning and buying agencies doing that as
well. And everyone has their own organizational structure around social content but they look all
very similar. Say a large PR agency may have opened up a newsroom this year, and hired people
to look for online trends using technologies and tools to glean data, to have creative throwing
together content, and the buyers to target audience in real time.
But we’re not only seeing that in PR agencies, we’re also seeing that in media planning and
buying agencies. They’re setting up newsrooms even if they’re not calling themselves that, but
they look very similar to the newsrooms of PR agencies. Same with digital agencies.
Community management is probably where PR agencies actually own. They’ve done that for a
very long time, so it makes sense for them to lead.
There seems to be a trend where agencies are diversifying their services, do you see that’s
helping them win more accounts and businesses?
Oh definitely. I’ve just spoken to a large PR company who has won three accounts recently, and
they are the lead on digital strategy, which might not be buying, but how to communicate online.
109
I think we’ll be seeing more of that in the future as clients recognize
It makes sense that more PR agencies are doing social buying because they are managing the
online communities for their clients, and that’s definitely happening for the past three years. I
don’t think buying at scale, though I don’t think the kind of buying at media agencies, hundreds
of millions of media dollars, would happen at PR agencies.
We’ve seen big PR firms like Golin and Fleishman making big structural changes in
response to the digital shift, do you see that in the ad, media and digital world as well?
I’m not sure they’re doing much yet. Digital agencies are doing exactly what PR has been doing,
by bringing departments closer, and setting up newsrooms. An example we saw recently is that
Mindshare and Possible, there are two different agencies under WPP, but they’ve decided
together to create a joint content group, to create an integrated team for real-time content. We’ve
also heard about a potential alliance between a creative and a media agency.
Alliance is another way to make this happen. We’ve seen interesting alliances and interesting
acquisitions. We will continue to see specialist digital agencies, production house, and ad-tech
providers getting bought by media agencies and big holding companies. We’re seeing a lot of
M&A activities to account for all this change.
Why do you think PR agencies have not yet taken the strategic brand lead?
Creative work from creative shop and media agencies, in the form of branded entertainment that
easily could have come from PR agencies, are better than the work coming from PR. Because
they don’t feel quite as restricted about being on point and on message. There are different kinds
of creative thinking, whereas PR is about controlling a message, so they don’t quite have much
that leeway in terms of creative thinking.
We’ve seen PR agencies hiring creative and media talents, do you see that PR talents are
being brought in non-PR firms as well?
No. I’m actually kind of surprised, every year I say this, I expect more of that but I didn’t see that.
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Asset Metadata
Creator
Xu, Ran
(author)
Core Title
Are public relations firms ready to lead in the new communication normal? the changing agency landscape and PR’s shifting roles
School
Annenberg School for Communication
Degree
Master of Arts
Degree Program
Strategic Public Relations
Publication Date
04/15/2015
Defense Date
04/15/2015
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