Wednesday, June 26, 2013

Paul Holmes' challenge for PR (communications) agencies of the future.

Paul Holmes
CEO, The Holmes Report
Editor-in-Chief, the Holmes Report
Paul Holmes at The Holmes Report blogged in May about the "10 Ways to Design the PR Agency of the Future." (Let's hope this is Paul in his role as Oracle, more than his role as Gadfly.)

It does not take a very deep-dive analysis into the PR agency industry to agree with Paul: ". . . many of them [PR agencies] have failed to integrate new ideas, new technologies and new media, into the way they do business-- often treating changes that ought to disrupt existing models as if they can simply be bolted on to the old model."

Every PR agency I know of, today, claims to "do" social media, but the vast majority of them have just bolted "social media" on (Paul's terminology) to their old model of doing business. (It's so obvious -- they've just added a Social tab to the website navigation bar which otherwise reads as it did in 2004).

Paul writes, ". . . many of the world's largest agencies, and a surprising number of midsized firms, continue to operate as if little has changed. Their infrastructure is a legacy from a different age, they have the same practice areas . . . , the same geographic structures, the same silos that served them (not always well) a decade or more ago."

Accenture's report
on 400+ seniormarketing execs:
"Turbulence for the CMO:Charting a Path
for theSeamless Customer Experience"
Keep that thought of Paul's in mind, and consider this: Accenture's report, "Turbulence for the CMO: Charting a Path for the Seamless Customer Experience" (April 2013), based on its 2012 CMO Insights survey (online survey across 10 countries with 405 senior execs who are "key marketing decision makers in their companies," most companies with revenues of at least US$1 billion).

These corporate decision makers were asked what types of external agencies they retain to lead critical marketing functions. Twenty-three functions were tested ranging from the business oriented (such as managing ROI), to web and social media (such as SEO, eMail marketing), data (marketing analytics, web analytics, customer data), paid media (paid search, media mix optimization, media/advertising optimization) and highest level strategy (brand strategy development, multi-channel campaign management, content management).

PR agencies are reported as being used for managing any of these functions by no more than 9% of the companies.  The agencies most often cited are the specialized digital agencies and data-based marketing services. Followed by ad agencies. Followed by systems integrators (Infosys, IBM, etc.). Followed by traditional management consultants (e.g., McKinsey).  Followed by, of yeah, PR agencies.

What does the following suggest to you about PR agencies' reputation among CMOs in the 21st century? Only 7% of the companies rely on PR agencies for social media monitoring. Only 5% of the companies rely on PR firms for web analytics.  Only 3% of companies rely on PR agencies for customer insights/analytics.  Only 6% of companies rely on PR agencies for content management.

No wonder Paul Holmes says the top three imperatives for PR agencies have to be:

1. Big data at the center
2. Insight to drive meaningful creativity
3. Understanding the human brain

(And, of course, there are seven more recommendations after that.  See the blog.)

The Accenture report outlines a "new CMO agenda":  1. Fundamentally change the marketing operating model. 2. Build new skills. 3. Get aligned with the right partners. 4. Drive digital orientation through the enterprise (and this last item does not mean Tweeting.)

My colleagues and I on the faculty of City College of New York's new Master's in Branding + Integrated Communications -- working, with great anticipation and enthusiasm, with the class of 2015 (our first -- classes starting in September) -- feel the urgency of taking Paul's and Accenture's insights very seriously.  We know our graduates will do just fine; the Accenture-surveyed CMOs expect 25% increase in budgets for digitally oriented marketing functions. The open question is whether much of "legacy" PR -- and advertising -- agency sector will be the places where these grads forge the successes of their careers.

This post is also published at bic-ccny-info, the blog for the new Master's of Professional Studies degree at the City college of New York, Media and Communications Arts Department.