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The Rise of Communications Marketing

Richard Edelman delivered this speech on September 21, 2014 at his induction into the Hall of Fame of the Arthur Page Society.

Thank you, Gary, for your kind introduction. I congratulate John Onoda on being recognized as one of the most outstanding practitioners of this generation. I was startled and deeply moved to learn of the Society’s decision to induct me into the Hall of Fame. It is the highest honor I have ever received; to be recognized by my peers as having made a significant contribution to our field.

Seventeen years ago, Dan Edelman, who was my best friend and mentor, received this distinguished Hall of Fame award. I am humbled to follow in his footsteps. He is credited by many as the father of marketing PR; he understood the potential of earned media to enhance the marketing message.

He gave me opportunities before my time, endured my awkward missteps as a 26-year-old manager of the New York office, critiqued my ideas and celebrated our achievements in his understated way. For that I am eternally grateful.

I accept this award on behalf of the entire Edelman team, but especially my late parents, Dan and Ruth – whose founding values of integrity, entrepreneurship, decency, hard work, creativity and citizenship continue to inspire our 5,000 people in 65 offices around the globe. My parents’ work is carried on by my sister, Renee, my brother, John, and now generation three, my daughters Margot and Tory. My thanks to all the Edelman people, past and present, and most of all to our clients, for enabling Edelman to surpass my parents’ wildest dreams.

I have now been in the PR business for 36 years, since I graduated from business school, all of them at Edelman. I have a very different background than many of my competitors; I never worked in journalism nor have I served in government.

My lack of journalistic experience was apparent when my first boss in New York City, Dick Aurelio, who had been an editor at the Providence Journal, tore my copy apart on the first and second drafts of press releases.

However, my background also brought with it some real advantages: financial and business acumen, early recognition of marketplace opportunities in areas such as digital, and a network of peers around the business community. These all have helped me immensely.

And eventually I even learned how to write… or at least to blog.

Ladies and gentleman, over the next few minutes I want to challenge you to think about our responsibilities in a new way. It will even make some of you uncomfortable. I sincerely believe that we must move communications into an even more mission-critical role.

We will build from our core, enhancing corporate reputation and employee engagement, into new areas such as customer service and new product development. This will require a melding of marketing and communications, grounded in data-driven insights, and taking risk with ideas. Marketing can no longer do it alone; the solution to every problem is not a new advertising campaign. We need real action to solve today’s complex problems, inspired by communications thinking.I believe that we are ready to do this because of the values we embrace, the principles of practice we have drawn from the work of Arthur W. Page and the skills that we in public relations uniquely possess.

Here are five important developments that make this evolution a necessity.

First: there have been tectonic shifts in trust. Confidence in government has collapsed due to perceived incompetence and paralysis, while business trust has soared from the low point in 2008. And yet there is residual suspicion of business; by a three-to-one margin, respondents in the Edelman Trust Barometer want more government regulation of energy, financial services and food.

There is great evidence of dispersion of authority. A person like yourself is twice as trusted as a CEO as a spokesperson and peer-to-peer conversation has supplanted top down controlled messages. The average informed person today has eight daily sources of information and needs to see a story three-to-five times in different places to believe it.

The second trend: we are living in a world of unprecedented complexity. Globalization, technology and privacy are colliding. Such important developments as cloud computing, hydraulic fracturing and genetically modified crops are being paralyzed by arguments that rely on emotion and individual perception of risk.

There is a new minimum standard today for introducing new types of products. Business must move beyond the classic goal of license to operate toward a broader ambition of license to lead, in which it earns societal approval of innovations by listening and adapting. Consider Samsung’s* wearable product, which requires new standards for protection of health information, with users deciding which applications have access to their data.

Third, brands are now also acting as representatives of their communities.

Brands are built not only through the tangible benefits they offer, but also in inspiring people through causes and content sharing. As activists and organizers of movements, such as the Dove* Campaign for Real Beauty, the brands are forcing change.

The new role of brands as leaders was best displayed in the rapid decision from the 13 sponsors of the Los Angeles Clippers basketball team. They discontinued their relationship upon learning about the disgraceful racist remarks by former owner Donald Sterling, making it easy for new NBA commissioner Adam Silver to insist on the sale of the team.

Fourth, the very nature of media has been transformed. The reader is now also content creator and advocate. The born-digital brands such as The Huffington Post rely heavily on contributors and on comments by informed readers in an ongoing discussion. Publications such as The New York Times now offer high-quality, high-performing sponsored content that runs alongside earned media. And media companies are now adding short-form video alongside other content, which is evidence of the need to show and tell.

Smart companies are creating their own newsrooms, with vertical sub-brands that focus on R&D, policy debate and innovation. With more people now discovering content via social media than search, our material must be both substantive and social by design.

Fifth, technology is causing the integration of corporate reputation and brand marketing. Consumers do not differentiate an engagement with a corporate call center from an interaction on Twitter. This means that great companies are making change, not waiting for it.

A case in point: Nestlé* is adopting animal welfare standards that affect its 7,300 suppliers. Why? Kevin Petrie, chief procurement officer, said “Consumers today care far more about how the components in their food are made, and since they all have smartphones they are willing to share their knowledge everywhere.”

So given these five trends – trust, complexity, brands acting for communities, the transformation of media and technology tying together reputation and brand – how should we reconsider the challenge of interacting with consumers and other stakeholders?

We need to start by shifting our language from talking about “marketing communications” to using a new paradigm: “communications marketing.” Wait a moment, Richard, you have it backwards; it’s always been “marketing communications.” That is exactly the point. Communications must be a full partner with marketing, beyond just building credibility to becoming the change agent.

This simple act of reversing two commonly used words reflects a new environment where classic, image-driven marketing is giving way to a new focus on long-term relationships.

Brands must evolve into Living Brands, operating with a clear mission and purpose, inviting participation from the community, being responsive in real-time and offering an ongoing value exchange. Living Brands embrace today’s complexity and are responsible for the supply chain, the well-being of customers and helping to solve societal challenges. The Living Brand utilizes creative storytelling that relies on actual consumer experiences vs. idealized, 30-second spots. Consumers are connecting the rational, emotional and societal dots of a brand – and brands need to do the same.

There are three governing principles of “communications marketing”: Evolve, Promote and Protect.

Evolve is to enable serious change inside the enterprise or to introduce a product that is a discontinuous, large step forward. We help our fellow executives lead the organization, not manage perceptions. We see around the corner to predict what will happen, make alliances with partners such as non-governmental organizations, listen to community feedback, then adapt the strategy to meet the needs of the marketplace. A good example of this is CVS*, which boldly stopped selling cigarettes and walked away from $2 billion in sales, but also renamed itself CVS Health last month as a clear signal of its path forward.

Promote is grounded in our storytelling heritage. However, it’s not tied to campaigns as in advertising, but rather designed to create movements. Our job is to be alive 24/7 with content and immersive experiences that are true to life and add value to relationships. GE* recognizes that every company can be a media company in its GE Reports, Technologist Blog and Ecomagination sites. Products under the Ecomagination brand now account for an increasingly important percentage of sales.

Protect is well beyond crisis management. We need to hold the organization to its promises where it matters most, on issues as diverse as human rights, tax and product safety. Globalization and transparency are permanent game changers; brands can no longer try to suppress or divert. We now must be publicly accountable and aim to prevent problems, not solely repair them. Pepsico’s* Performance with Purpose initiative has a number of goals for portfolio improvement and sustainability, with annual public reporting of results and connection to financial incentives for management.

Communications marketing returns marketing to its roots. In 1959, Northwestern Professor Philip Kotler defined marketing as, “Creating, delivering and communicating value to customers and managing customer relationships in ways that also benefit the organization and its shareholders.” This matters because the goal must be to enable change. Consider what Unilever* CEO Paul Polman told me last month: “One third of our sustainability plan of doubling revenue without raising resource consumption has been achieved by fixing our supply chain. Now comes the hard part, the other 2/3 of the change, to alter consumer behavior, to take shorter showers and use cold water wash.”

This will happen only with superb, creative work. It is a false choice to say that our programs need to be substantive instead of brilliant. I attended the Cannes Lions for the first time this summer. What was clear to me was that the lines have blurred. Brilliant ideas can come from everywhere: ad agencies, digital firms, media buyers and PR firms. A great story will win if it is brought to life through powerful creative, with immersive live and virtual experiences and by leveraging the full force of earned, owned and paid media.

We must be brave enough to make organizational and cultural changes, to welcome planners, digital and social media experts, creative talent, media superstars, developers and quantitative analysts who can do this kind of work. They will create the stories that are meant to be talked about in the socialized, democratized world, that give people a reason to engage with your brands on an ongoing basis. They will design apps that make it easy to participate in a brand’s future.

The value of “communications marketing” is already being recognized by leading senior executives. Consider these words in a Harvard Business Review interview with Keith Weed, CMO for Unilever: “In a joined-up, social, digital world, I don’t think that you can separate communications from marketing. If you do, you’re talking out of two sides of your mouth as a company.”

Or consider what Rick Goings, CEO of Tupperware Brands* told Edelman’s Global Leadership Team in June: “Get marketing behind communications. We have abdicated what marketing can be. The soul of the company is authenticity, purpose and localization of your offer.”

Smart corporations are reacting already to this new reality by giving communications and marketing leaders a much broader set of responsibilities. Consider Andy Pharoah at Wrigley*, who added the role of Chief Strategy Officer to his CCO day job. Or John Iwata, formerly CCO, now CMO and leader of the strategy group at IBM, who conceived of a partnership between IBM China’s research laboratory with the Beijing Municipal Government to forecast and control air quality in real-time so that factories could be closed on bad air days. These executives recognize that their role is to evolve, promote and protect their companies, always doing what is right for the enterprise.

To make “communications marketing” not just an ideal but a reality:

  • We EMBRACE new skills and capabilities that are predicated on systems thinking, a global view, and a relentless pursuit of innovation.
  • We ADVOCATE for substantive change in a brand or corporate strategy tied to competitive advantage and societal benefit.
  • We ENABLE business to be seen as a force for good, a values-based approach in order to change consumer behavior.
  • We PARTNER with civil society, for the capacity to deliver services on the ground in a credible manner, while business offers the capital and expertise.
  • We OFFER outstanding creative ideas that catalyze communities through storytelling that is useful and incredibly simple to share.
  • We PARTICIPATE in the revolution in media by embracing earned, owned and paid media.
  • We PROVE that our ideas and programs drive substantive impact by connecting the results to key business metrics such as consideration, demand generation, loyalty, image and reputation.

Communications must operate with the rigor and analytics of marketing – and marketing must operate with the storytelling mindset and marketplace reality of communications. They are inextricably linked.

Thus, Communications Marketing – a powerful way to re-imagine the opportunity staring us in the face.

This is public relations creating outcomes that change the path of the corporation while also improving society. This evolution is the consummation of the dream of Dan Edelman and is entirely consistent with the Page Principles. In the end, we are advocates for truth and prove it through our behaviors and actions. No other discipline holds these values as closely.

For you as communications and marketing executives and for those of us in the PR agency world, it is our time to lead.

Thank you again for this incredible honor.

*Edelman client

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