How PR evolved into strategic communications

The seeds of our current marketing services model were sown in the decades following World War II. Sales of goods and services exploded; and paid media numbers grew dramatically to feed demand. Advertising agencies and their suppliers were among the most profitable enterprises in the U.S.

But this was too good to last.

Beginning in the late 1980s, cracks began to appear in the agency-client relationship, traditionally based on a 15% surcharge on media costs.

Procter & Gamble was one of the first major advertisers to announce that it would no longer pay the traditional markup on media buys. The Cincinnati-based giant felt that agency fees were inflated and personnel rosters bloated. P&G proposed that instead, agency fees be negotiated based upon brand profitability and agency costs.

Running parallel to this sea change was the fact that the major ad agencies were merging into public conglomerates to serve increasingly global clients and achieve greater cost efficiencies. As a result of this focus on the bottom line, ad agency personnel numbers started to shrink. The American Association of Advertising Agencies estimated that the amount of people employed in advertising decreased by more than 50% during the two decades ending in 2012.

At the same time, the conglomerates began to acquire ancillary marketing services as quickly as they could, as a means of broadening their offerings. These services traditionally charged negotiated fees, based upon project scope or hourly rates.

This shift in economic fundamentals would ultimately provide extraordinary opportunities for those PR and ad agencies that could adapt to a fracturing marketing communications environment.

Meanwhile, public relations leaders like Harold Burson and Daniel Edelman recognized that this implosion in advertising represented a real opportunity for their industry. PR budgets had historically been lower than advertising budgets. Now, with the ad business under pressure, PR agencies began to capitalize on this shift, emphasizing that public relations — not advertising — was the smart communications choice.

PR revenues kept growing from the ’90s into the new Millennium. PR firms of every size and most regions of the country showed strong income gains year after year.

Things continued on the upswing until the economic slowdown, following the attacks of 9/11. Clients, facing an unknown future, slashed budgets. Many PR firms lost a major portion of their billings.

PR agencies, trying to regain their footing, redoubled their efforts to provide the kinds of services for which they had always been known: strategy, event planning, crisis communications, financial relations, speechwriting, media training, media outreach and the like. Some began offering these services as part of an integrated whole, guided by a strategic overview of client needs and opportunities.

The growth of social media posed another major opportunity to the public relations industry. As marketers began to realize that, like it or not, the Internet would become critical, they began to clamor for all manner of Internet-based services, from whatever source could provide them at the right price and quality. Consequently, forward-thinking PR firms became experts in new media as fast as they could.

At our mid-sized agency, for example, in addition to all the traditional service offerings, we now can make readily available to clients a host of additional capabilities. Among them: social media platforms, creative-digital services, content development, website and app design, logo design and naming, experiential marketing, licensing, business results measurement and market research.

What’s the main value in having all these core competencies? It’s certainly not our ability to offer them individually, although we can do that. The real value to clients is our ability to integrate these disparate skills into an overarching brand strategy — which brings us to the heart of the ideas being discussed here: PR as a strategic communications business.

A key question: How do we establish communications strategy for our clients in this Brave New World? We begin by listening. We listen as our clients talk about their immediate and long-term problems and opportunities. We ask astute questions that evoke real insights between stakeholders and brands. We listen to our clients’ audiences, to the findings of research that we undertake, as well as to existing findings. We listen to competitive and general industry intelligence. Then we formulate our strategy.

When we have a true picture of a client brand’s relationship with its audiences, we engage with that consumer in a way that reflects our strategy. We engage by creating persuasive brand messages and placing them everywhere they need to be; and then we repeat the process. This ability to tune in and fine-tune is so effective that it has become our mantra: Listen. Engage. Repeat.

For us, the act of listening is serious business. That’s why we have a Chief Comedy Officer whose role is to train our entire staff in stand-up comedy. Surprising? Not really, if you think about it. Aside from the obvious benefit of making us better presenters, comedic training also reminds us to listen first, last and always — and to not take ourselves too seriously. Stand-up comedy training allows employees to step back from day-to-day pressures and look at the big picture from a human perspective. It fosters team spirit. It creates a more enjoyable work environment as well.

Today’s leading companies remain ahead by training smart, confident professionals: Professionals who engage easily, think creatively, listen actively and deliver flawlessly under pressure. These associates follow a business model which emphasizes integration of services under an umbrella of strategic thinking.

Public relations has morphed into strategic communications. Our business is based on ideas and on the people who champion them; on what’s coming next; and on where the industry is going versus where it’s been. Our best practices center on inventing (and then reinventing) best practices.

Our work has become both a lot more challenging and, for those who love what we do, more personally rewarding than ever.

Janine Gordon is President of JGAPeppercomm.