26 (121) 2016
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Public affairs and PR in the digital age

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Michael Dembinski talks to Jan Šimůnek, CEO, Continental Europe for Grayling

We meet for breakfast at the Executive Club at Warsaw’s Regent Hotel to talk about the challenges facing public affairs and PR across Europe today in a troubled world that’s becoming increasingly digital. Like many sectors of business, public relations has been deeply shaken up by digitisation, at the same time facing challenges arising from slower economic growth, increased global tensions and demographic disruption.

“Public affairs and PR is an extremely human business – it is all about nurturing relations, with journalists, politicians, employees and other stakeholders. These days, with so many online channels augmenting the existing news media, PR companies have so many more relations to nurture. It used to be a few business newspapers and some trade magazines,” says Mr Šimůnek. “Now its an extremely big bubble. There are hundreds of bloggers covering every niche, there’s Facebook, Twitter, LinkedIn – and new forms of social media, new apps to reach the young, appearing from nowhere to challenge the main channels. We need to be constantly evaluating and ranking these channels’ effectiveness for our clients’ campaigns,” he said. Grayling works on strategic communication, employer branding, crisis and issue management and public affairs, at the interface between business, politics, consumers and employees, in more than 30 offices across 22 European countries. The agency’s presence in 11 countries in Central & Eastern Europe (CEE) is a key area of differentiation from the other international networks.

In this new digital world, the relevance of the message to the target group becomes even more important. Millions of messages are clamouring for attention, as attention spans get shorter and people are forced to become more selective as to what they spend their time on. And the overlap between editorial content and online advertising is increasing.

And yet, the digital media are easier to measure. “These days, PR’s effectiveness can be measured by tools that didn’t exist ten years ago. Our clients are looking for data-driven insights. In the old days, it used to be column inches and numbers of TV and radio interviews. Now it’s about audience behaviour. Our clients expect sophisticated interpretation of the data to prove a campaign is working.

Mr Šimůnek gives as an example a campaign that Grayling is currently engaged in, on behalf of the Croatian National Tourist Board (CNTB), promoting the country as a pre- and post-season holiday destination. “The campaign has run for two years. There are very specific key performance indicators which we have to hit on a monthly basis to demonstrate the value that is being added. The CNTB campaign is now 50:50 in terms of the split between digital and traditional media.”  

“The PR discipline depends on story-tellers working together with graphic designers, and digital planners,” he says. Sophisticated marketing and communications depend on great content. “In social media, good images and video make the difference.”

Having talked about Grayling’s work for the Croatian government leads me naturally to ask about the firm’s participation in the UK government’s GREAT campaign. “We worked on this for two years, across six CEE countries, focused on the Innovation is GREAT slogan. It was good to have worked on it, we learnt a lot from creating content for the campaign. UKTI was better than many private-sector corporates when it comes to its continuous evaluation of the Unified Communications value for taxpayers’ money, with robust KPIs that we had to hit. For example, we were given firm guidelines on what was expected of us at the outset. One benchmark was that a successful campaign should reach at least one thousand people for every £4 to £8 spent in total. Our final score was under £2 for every thousand people reached. I’m very proud of that”, says Mr Šimůnek. “A campaign like GREAT will become all the more important after Brexit, if the UK is to retain its global influence and soft power,” he says.

We discuss the prospects for European business after Brexit; will corporate HQs serving the EMEA region, currently based in London be relocated to, say Frankfurt, or decentralised across the continent?  “The financial services sector looks likely to be amongst the most seriously affected, assuming the UK loses its passporting rights, which seems increasingly likely. Frankfurt would be the obvious beneficiary. But Brexit may serve as an opportunity for many other corporates to reconsider their European structures; do they still want a single HQ for the whole of Europe, Middle East and Africa, or will they choose to look at Europe as a collection of micro-regions – the German-speaking countries, the Nordics, the Baltics, CEE, South East Europe, the Mediterranean countries, Benelux, Balkans, CIS? This is how we have now organised our business across Europe – as six micro-regions – which is resonating with a lot of clients because they are starting to see Europe in the same way Corporates will continue to do their EU public affairs through Brussels, but I think we will see a lot of companies re-evaluating their European strategy going forward.

So should PR agencies become bigger, to be able to send out clients’ messages through the different channels, or smaller – focusing on niches – or somewhere in between?

“For us, it has been ‘somewhere in between’. Grayling is unique in CEE –  we have the experience, knowledge and footprint, which has helped protect our PR business – but we also started to focus hard on public affairs about 10 years ago. That is still the fastest growing area of our business and has underpinned our strong results across the region. We are now looking to replicate that CEE model in Western Europe, the complete reverse of the way most British or American PR firms have approached Europe,” says Mr Šimůnek, who was asked to assume responsibility for Continental Europe two years ago having spent his career up to that point in CEE.

“We were the first international PR group to enter the region, opening first in Prague in 1993, then Budapest, then Warsaw in 1996. We have 35 consultants in Poland now. Budapest was our original headquarters for the region. Of course today the automatic first choice for a CEE regional office would be Warsaw. We entered the Czech market with international clients like Intel, Visa and IBM and quickly created a hub that would also serve South East Europe, Romania, Turkey, Russia and CIS. Soon we had developed a network of 11 offices with over 150 consultants. Other international networks were not so successful; both Edelman and Burson-Marsteller closed their CEE offices, and now operate through affiliate partners only.”

“We came in at the right time, with strong expats who trained the local staff and were capable of attracting international clients  – exactly the right approach at that time. Much of our work in the early 2000s was around privatisation, where public affairs and corporate communications would overlap, regulatory issues, employee relations and PR were all needed. Mittal Steel was among the privatisations we worked on,” says Mr Šimůnek.

Looking ahead, the Polish market for PR – and all business-to-business services – can be divided into three. The state-owned enterprises, which are largely a law unto themselves, the global corporates with a presence in Poland, who tend to have long-standing relations with their service providers – and a most interesting group – the Polish entrepreneur-owned businesses that were established since the late-1980s.

This last group is interesting because many of the successful businesses that today are thriving medium-sized businesses, employing hundreds, exporting to many markets and starting to become significant players in their sectors, will be facing succession issues in the very near future. The typical Polish founder-entrepreneur is not someone who invests in external know-how in what they see as ‘soft’ areas such as PR, HR, CSR or management consultancy. The result, typically, is that there is a gap in the quality of the management structure, something that often comes up in due diligence work when such a business comes up for sale as the founder looks to retire. It is at this point in the business’s lifecycle that investment in consulting services stands to raise its value. “We still have a job to do to convince some companies of the business value of high-quality PR and, in some cases, that ethical, transparent public affairs work – as it is done in London and Brussels – can deliver results in CEE too. Sometimes it is not until a business critical challenge emerges – maybe a regulatory threat, a major reputational issue or a struggle to attract new employees – that CEOs recognise the need for communications and decide to invest”, says Mr Šimůnek.

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