Edelman released its numbers for 2019 this week. We showed growth of 2.1% in constant currency, with modest forward progress in each of our regions. This is a better performance than the prior year and is consistent with our growth rates for the past four years. What’s going on in the business and how do I see the way forward?
- The Necessity of Geographic Diversity—Too much of the business relies on revenue in the U.S. and UK. We need to develop the PR business in China, France, Germany, India and Japan as these countries are the home of giant multinationals. In many cases the business is too dominated by hometown players who have advertising roots. We need to challenge the presumption that PR is a throw-in and derivative of advertising. We must help MNCs in those markets go global.
- The Importance of Going Direct—Disruption in the mainstream media continues; note the McClatchy bankruptcy this week, with hundreds of local reporters now in jeopardy. In order to Go Direct, we need our own creative ideas which should be based on Earned Creative, trustworthy content, fast as the news cycle, earned at the core and social by design. That means hiring talent outside of the traditional PR stream, specifically creatives, planners and paid people. Going direct is a supplemental approach as we will continue to work in partnership with media.
- Public Affairs Overlaps with Marketing—Brands are thrust into the conversation by happenstance or as a matter of strategy. Smart brands recognize the power of belief driven buying. They can act small, as if entrepreneur led, if they take principled positions that matter to consumers. This mandates an integrated marketing PR and public affairs offer. It also means public affairs advice to get ahead of regulation in technology, health care and food.
- Business Steps into the Void—In a time of populist and divided government, it is necessary for business to act without waiting for approval. Whether on sustainability, re-training, wages or supply chain, it will be PR executives who push for demonstrable change that catalyzes the employees and involves the community. There is no better example than the work being done in Chicago with community colleges, all of which are linked to specific companies.
- Data and Analytics—Two of the holding companies, (IPG and Publicis) have made massive acquisitions of first party data firms. Ultimately, we need to offer predictive and behavioral analytics, to connect our work to results such as product sales, leads, attracting recruits or recommendations.
- Advisory—We cannot cede the ground to management consultants on purpose or crisis management. We must show that we are essential partners who base their recommendations on relationships with reporters, influencers and government plus a deep understanding of data.
- Brand—We need to help in the transformation of brands, especially in the food business where incumbents are being challenged by start-ups with sustainable provenance. We are also flexing our new muscles in experiential, with the Taco Bell Hotel, a UEG production that was a major story.
- Client Service—The demands of clients change every day, from CEO positioning to brand launch to crisis counsel to digital response. Teams need to be integrated, with a single lead offering the best of the agency, not of an individual office. We are not in the transactional business, aiming to maximize fees on a deal. Our reputation is built on sterling advice and immaculate execution.
- Attitude—It is evident that more than half of the PR firms have contracted in the past year. We need to stop fighting for budgets only against each other. The PR industry revenue is flat-lined. We are a smart alternative to ad agencies, able to manage complex communications challenges at the speed of digital marketing. We have judgment about potential risks and understand the innate overlap of brand and reputation. We need to stop being the poor relation; we are in fact the cool kids with better facts.
It has been an energizing week. Six hundred people came to the Radisson Hotel in Chicago to listen to my Trust presentation on Wednesday. We have something important to say. Let’s move.
Richard Edelman is CEO.
