Remarks on the 20th Anniversary of Ketchum Estratégia

 

 

I am honored to be here today for two reasons. First, because it is always a pleasure and a privilege to meet with Ketchum clients. Second, because what better time to meet with Ketchum Estratégia clients than as we are celebrating our 20th year of practicing public relations here in Brazil. Ketchum Estratégia is a strong and important member of the Ketchum network and we are proud of our success here and for the opportunity to partner with clients such as you who are here today. Thank you for that opportunity.

  

I’d like to use my time this afternoon to talk about some of the key trends and challenges in public relations, to discuss highlights of some recent research Ketchum has done, and then to briefly share a bit about Ketchum and our global network.

 

I will start out by stating something that most of you already are experiencing: The public relations industry is undergoing profound change. In fact, I believe that we’re at a tipping point, as many of the trends we are seeing will have a major impact on the way we practice PR.

 

To keep it brief, allow me to walk you through six major trends and the challenges and opportunities they present.

 

 

Trend number one: New media has changed the flow of mass communications. Public relations media strategies traditionally followed a fairly simple formula – professionals like all of us used television, radio or print media to send a company’s message en masse. 

 

New media has begun to change that.

 

The reach of the Internet and the more recent explosive popularity of Web sites such as MySpace and YouTube have enabled consumers to communicate more broadly – not to mention, instantly – rather than just being communicated to. Millions of people are now communicating directly with companies, industries and government agencies. More importantly, they’re communicating directly with each other. Communication is no longer limited to major broadcasters and publishers conveying information to a passive audience. The audience is fully engaged. And any individual can easily send out his or her own messages to a mass audience, too.

 

What’s more, in our global world, communications is more global than ever before. This past June, YouTube announced the launch of in-language sites in France, Ireland, Italy, Japan, the Netherlands, Poland, Spain, the U.K. and Brazil. That’s powerful.

 

All of this means that businesses everywhere should understand that they must engage in two-way conversations with their consumers and constituents. The good news is that companies like yours no longer have to guess at what consumers want. Public relations is skilled at creating dialogue, and in the coming years, there will be more opportunity than ever before to develop public relations programs that truly connect consumers with your companies and your brands. And new media will be an important tool to help us do it.

 

In fact, the new-media trend is especially important here in Brazil. Ketchum conducts an annual survey of media usage in conjunction with the University of Southern California’s Annenberg Strategic Public Relations Center, and this year’s survey was expanded to include consumers in Brazil, Russia, India and China. Our data show that Brazilians are particularly attuned to the newer media channels such as blogs, search engines, mobile media, social networking sites and RSS feeds. The data also suggest that Brazilians consume media more frequently than their counterparts around the world and that they place a greater level of trust in the various media channels.

 

Yet consumers also continue to use traditional media, as well – newspapers, TV, radio. So they have more access to information than ever before. 

 

 

Trend number two: Public relations has become a global business. Increasingly, corporations are positioning themselves as “global companies” – and they are, with employees and customers everywhere. And that moment has arrived for Brazil. With your rapidly growing manufacturing sector, traditionally strong agricultural base, trillion-dollar economy, booming Bovespa, strong Real, recently discovered Tupi oil field and the shrinking inequality among the “haves” and “have nots,” Brazil’s 180 million people and your institutions will be front and center on the world stage. You must be prepared to communicate globally, too.    

 

The world has been evolving into an interconnected place for some time, and you or I probably could point to global public relations programs that took place prior to 2006. But the rate at which they are popping up today demonstrates that companies are realizing the great convergence of issues, challenges and opportunities. Public relations professionals are operating on a more global platform. Local impact is still important, but increasingly interests are shared across nations. Just some examples of assignments that our agency, Ketchum, handled this year: The global health initiatives of the World Economic Forum, Lenovo’s Olympic sponsorship, the worldwide launch of Nokia Siemens Networks, and ongoing work for the press office of the president of the Russian Federation, IBM, FedEx and Kodak.

 

Those are major, global engagements. But even on an everyday scale, Ketchum uses its network of PR professionals in more than 50 countries around the world to bring global perspectives to our clients. For you, that means that a Ketchum client in São Paulo who wants to make a statement that will have relevance for consumers or businesses in Dallas, Texas, can place just one phone call – or send one e-mail – to your contact here to gain access to our brightest PR professionals in the United States.

 

This leads to the third trend.

 

 

Trend number three: Corporate social responsibility and public relations are playing an increasingly critical role in addressing major issues around the world. Last summer, Ketchum partners from around the world met in Atlanta, Georgia, and were joined by the Director of Executive Education for the Center for Corporate Citizenship. The Center, which has more than 300 companies from around the world as its members, has compiled some interesting statistics. For one: Of the largest economies in the world, just 49 are countries; the other 51 are corporations. And the top 200 corporations around the globe have combined sales that are 18 times the size of the combined annual income of the world’s 1.2 billion people living in severe poverty. What’s more, membership in international NGOs has been growing around the world, and Latin America has seen some of the strongest growth. Such realities have put the onus on corporations – rather than solely on government – to help address some of the world’s problems.

 

Clearly, for public relations this isn’t just about making sure business is saying the right thing. It’s also about outlining initiatives with measurable results. Successful global companies will be those that recognize that corporate social responsibility is not optional and that it also can provide great business results.

 

According to the very reputable Institute for the Future, by the end of this decade, we can expect these headlines:

While the world will be facing challenges tomorrow, public relations – and therefore business leaders – can begin to help shape and, perhaps in some cases prevent them, today. And here in Brazil the opportunity appears to be even greater. In Ketchum’s media usage survey – which was conducted in early October of this year – consumers in Brazil express the same level of trust for corporations and their leaders as for NGOs.

 

That confirms a Ketchum survey conducted just a month or two earlier in which we asked Brazilian consumers about their perceptions and expectations of corporations and their CEOs. That survey found that consumers here have high standards for corporations in the areas of honesty, ethics, employee compensation and environmental leadership – and more importantly, it also found that consumers consider Brazilian companies to be more or less on target with those high standards. 

 

Consumers here also value the role of the CEO; three-in-four Brazilians who are considered influencers -- those who drive opinions -- said that they would want to be CEO of a large corporation. By comparison, in the U.S., most people wouldn’t want the job.

 

That gives Brazilian corporations an advantage over other nations where trust in corporations and CEOs is lower. But it also ups the ante. Influencers, in particular, hold Brazilian corporations accountable for addressing social problems and other issues and, unlike average consumers, they don’t view CEOs as being “on target” in terms of honesty, ethics, caring and championing employees. For companies that act openly, honestly and ethically, there is a great opportunity to differentiate.

 

That brings me to the fourth trend.

 

 

Trend number four: Within the past two years, companies around the world – though particularly in the U.S. – have begun focusing heavily on employees and employee engagement. Too often, companies neglect dialogue with their own people -- employees who can act as ambassadors for the brand and the corporate reputation. A happy or unhappy employee inside a company can easily spread word of his or her admiration or problems outside of the company. For public relations, that means employees must be engaged in any programs we devise for the public. They must actively be involved in helping develop and advocate for the programs. That means they must understand your business objectives and initiatives and actively buy into them. Ketchum’s change-management group, Stromberg Consulting, helps companies deal with building internal brand ambassadors all the time. There are many fresh, innovative ways to engage employees and engagement is what helps with both recruitment and retention.

 

 

Trend number five builds on that, and it’s just one word: talent. Recruiting and retaining top talent is an issue that faces all businesses today, including public relations. The PR industry has matured to the point where we need a more diverse skill set than ever before, and this is happening at a time when the war for talent has become increasingly intense. I believe we must take a number of different tacks.

 

First: We must recruit new talent with diverse and different skill sets.

 

Second: We have to work at retaining the best and brightest public relations professionals in our respective organizations so as to continue to deliver the richest thinking possible to our companies or through our agencies to our clients – and we can do that through the employee engagement programs I talked about earlier, coupled with strong HR programs. 

 

Third: We have to work at retaining the best and brightest within our broader industry and that means continually underscoring and supporting the broad efforts by our professional organizations that articulate why PR is critical to the future. 

 

And, finally, fourth: If an employee has left both our company and industry, we need to consider whether there is another role for him or her -- perhaps as a business partner or influencer. In today’s world, it is definitely time to think differently about talent.

 

Having said that, I will add that I am optimistic about attracting people to our industry. This is an extraordinarily exciting time for public relations. It strikes me as the best of times. That leads to the sixth trend and the final one that I will talk about today.

 

 

Trend Number 6: PR is measurable. One of the world’s largest marketing organizations, Procter & Gamble -- and a valued client of Ketchum right here in Brazil -- is telling us that PR delivers the best bang for the buck on an ROI basis. Tie this in with the fact that P&G has realized it no longer owns its brands but that consumers do, and you quickly realize that public relations is the best tool to help companies help consumers manage the company’s products. Recall Trend number one – new media has changed the flow of communications. Yes, it all ties together.

 

This reminds me of another key finding of the Ketchum-USC media usage survey: the human channel – namely word-of-mouth – is critical in helping companies engage consumers. In all of the markets that we surveyed, consumers place a very high value on advice from family and friends, information received through social networking sites, blogs and so on. In Brazil, social networking sites trumped the other sources of word-of-mouth channels, with 68% of general consumers and 71% of influencers reporting that they rely on them. Some 58% of consumers and 59% of influencers use video sharing – underscoring YouTube’s decision to launch an in-language site here.

 

All of the trends I’ve talked about in the past few minutes underscore the ways that PR is becoming more challenging. But I could just as easily talk about all the ways that PR is rising to meet those changes and challenges. PR professionals are helping clients around the world make greater use of the Internet, engage their employees, and devise and report on social responsibility initiatives. And we are doing that for Ketchum clients – with word-of-mouth, employee engagement and other increasingly important capabilities, as well as ongoing training to make sure our entire network is updated and able to deploy for our clients the latest PR strategies and tools.

 

Finally, that brings me back to Ketchum Estratégia. As one of the top 10 agencies in Brazil, we’re continuing to build on our 20 years of expertise with the recent launch of Ketchum Interactive Communications – which helps our clients develop and execute online PR programs and other communications. And I’m proud to say that we are growing strong elsewhere in Latin America as well. Before I came to São Paulo, I visited Argentina – where Ketchum is celebrating its 10th anniversary this year. We have been blessed with talented PR professionals in both offices and I know that they are committed to delivering terrific results for clients.

 

Again, thank you for your relationship with Ketchum Estratégia, for your friendship and for your interest in public relations.