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January 4, 2008
A Few Things to Watch For In 2008
Every other pundit is making his or her list for the coming year. Here is my forecast for the PR business for 2008.
1) Ever closer link between corporate reputation and brands. Over the past five years, there has been a growing recognition among PR executives that corporate image cannot stand apart from brand marketing. In fact, companies such as Procter & Gamble which had previously emphasized brands (Tide, Crest) to the consumer and downplayed the corporate brand have changed their policy. Now smart companies are taking on big issues such as environment, living wage and education, often with brands taking a leading role. Brand managers are concerned about issues that go beyond traditional marketing and sales, including production methods, sustainable inputs and packaging, because they want to reflect good values as well as value to customers.
2) Financial services companies will be in a long term reputation re-building mode and will require serious investment in PR. The benefits of innovation in this sector are clear but the lack of transparency and now loss of trust mean that this sector can no longer simply speak substantively to opinion leaders while selling to customers. One idea for bankers is to emulate the pharmaceutical industry in offering affordable product to those most in need (restructuring of sub-prime loans is the place to start).
3) Sovereign wealth funds such as Singapore’s Temasek will be this year’s private equity poster boys for greed unless fast action is taken. You can be sure that difficult economic circumstances in the US, UK and Europe will provoke politicians such as John Edwards to grab the issue of rapacious foreigners swooping in to buy distressed assets. PR can play a vital role in explaining the rationale for overseas investment and the ultimate use of funds in home markets for education, infrastructure and environmental improvements.
4) The digital aspect of public relations will continue to develop apace, but we need to focus on those aspects of Web 2.0 where we have comparative advantage. Ideas with a public service element, facilitating dialogue with third parties, creating authoritative content linked to credible primary sources, and campaigns asking for stakeholder expertise and experience are the sweet spot. We can compete with digital firms and ad agencies but let’s do it from strength. Let’s also recognize that our biggest job is to convert our account staff into Web 2.0 players, to assure that they are sufficiently broad in their reading/viewing habits, incorporating video content into their work and committed to transparency and quality in content provided to the community. PR is a true growth industry because we rely on dialogue, shareholder engagement and relationships, but only if we truly embrace digital.
5) China will be an even bigger focus for news in the coming year, given the Beijing Olympics, trade, electoral politics in the US, environment and product quality issues. As per my last post, the Chinese Government is committed to change in its communications policy. The trade-off between economic growth and environment is so evident. Investment in infrastructure is struggling to keep up with development. According to economist Richard Sandor, nine new subway lines will open in Beijing just in time for the Olympics so that cars can come off of the roads and air quality can improve.
6) The value of real people as spokesmen is only growing. Fred Krupp, director of Environmental Defense, is writing a book due out in March on why there is hope for environmental change. He focuses on stories of individuals, such as an entrepreneur in Alaska who is determined to build an ice hotel, despite global warming. The businessman finds a low energy cooler from United Technologies, which then enables him to succeed at low cost and reduced energy consumption.
7) The need to be true to your brand has never been more evident. When Columbia University President Lee Bollinger hosted Iranian President Ahmenidijad at a public meeting last spring, his caustic introductory remarks became global news. In fact, this stimulated a horrific reaction at the University, with the faculty upset by the evident lack of commitment to free speech, and throughout the Middle East where this was further proof of American bias. Bollinger was playing to the local market and was acting totally out of character given his long advocacy of civil rights.
8) Watch for a revival of mainstream media, as the Wall Street Journal on-line drops its subscription fee and broadcasters like CNN and BBC embrace consumer generated content. Trust in media is soaring according to the Edelman Trust Barometer 2008.
I would appreciate your views as always. Thanks for reading this post.
Posted by Edelman at January 4, 2008 6:06 PM |
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Comments
China Investment Corporation (CIC) is the China sovereign fund of USD200 billion. It has committed to invest two thirds of total domestically, leaving around USD66 billion for foreign investments.
So far the CIC has invested in:
Morgan Stanley (USD5 billion)
Blackstone Group (USD3 billion)
The fund is to invest in U .S. Treasury securities; private equity and hedge funds; and other safe but low-return instruments.
China's Vice Minister of Finance Li Yong recently stated that CIC's investment in world financial markets would be realized gradually and in a cautious way. The CIC would not buy into overseas airlines, telecommunications or oil companies. From my experience however, only a leading foreign PR company could achieve such cautious results.
A rough calculation shows that the China Investment Corporation still has USD58 billion of potentially sensitive acquisitions to make abroad over the near future! If that isn’t the PR opportunity of a lifetime, I don’t know what is.
Posted by: Michael Jones at January 6, 2008 2:37 AM
Dear Richard,
Fully agree with item #8 of your list, on the revival of the MSM. There was a very good piece in Time magazine last month, which more or less adresses your point, albeit in a satirical way.
Time Magazine dubbed this revival "The Year of Them" (by contrast with the "YOU are person of the year" cover a year ago). Witty and smart: http://www.time.com/time/magazine/article/0,9171,1697390,00.html
On item #4, thank you for putting such excellent thoughts in so few words. I'm a PR professional by training & web 2.0 consultant by passion, and I couldn't agree more with this sentence: "Ideas with a public service element, facilitating dialogue with third parties, creating authoritative content linked to credible primary sources, and campaigns asking for stakeholder expertise and experience are the sweet spot.". Right on.
If I may indulge in a bit of self-promotion, this is exactly the thinking that drove us when we created with my agency a very unique website for the French national railroad company: no spin, no flogging, just real people from the company talking to their consumers and stakeholders, as peers. We used a digg-like format: kind of a cross between Dell IdeaStorm and Youtube-Youchoose'08.
I know you'll never hear about it or read about it on the PR blogosphere because it's not in English, but it's not half bad nonetheless, and allows the company to engage in the kind of direct, unvarnished exchange you describe.
Posted by: Stan at January 7, 2008 4:42 PM
Keep looking into the eye of the tiger! I feel like I'm looking into the future when I read your insights from China!
Posted by: Craig Klein at January 7, 2008 10:05 PM
Regarding item #5 (China's communication policy). The Chinese Communist Party may profess to be changing its communications policy, but I am concerned that they view public relations as a "smoke and mirror" campaign to obscure true intentions and actions. Their "peaceful rise" song and dance does not fit with their massive military build-up, shooting down satellites and their shenanigans regarding the USS Kitty Hawk port visit event. Their "transparency" story does not jive with massive corruption of party officials and disregard for protecting intellectual property. Their newfound "openness" is contrary to their control of the media and brutal oppression of internal minorities. Their desired image as a "responsible international actor" does not fit with their complicit dealings with African governments in places like Darfur. In short, actions STILL speak louder than words.
Posted by: Charlie at January 23, 2008 2:03 AM
I'm looking forward to more companies taking on advocacies this year. Last year, people were exposed to the green movement and more people have successfully integrated the lifestyle to their everyday life. I'm hoping those big corporations will be able to affect bigger changes as well.
Posted by: Jen, writer MembershipMillionaire.com at January 29, 2008 6:46 AM