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    Главная / News / Arun Sudhaman, The Holmes Report: Public relations is a wonderful profession to be involved in.

    Arun Sudhaman, The Holmes Report: Public relations is a wonderful profession to be involved in.

    It gives you a wonderful opportunity and a platform to build strong businesses that take into account the full range of stakeholder and social issues. To help build businesses that truly do act for the good of society.

    Arun Sudhaman Interview Photo

     

    In anticipation of the Leadership Dialogue Forum, which will be held on September 5th at the MIA Rossiya Segodnya, Elena Fadeeva, Orta Communications Group President and FleishmanHillard Vanguard General Director interviewed Arun Sudhaman, The Holmes Report CEO Editor-in-Chief and the head of SABRE Awards, who recently moved from UK to Hong Kong.

    • The SABRE Awards attracts participants from all over the world, and the projects submitted to the SABRES illustrate global trends in communications. What new trends you can outline in EMEA, Asia Pacific and the Americas? Were there any developments or growth in such topics as ecology, sustainability, inclusion, technology, etc.?

    The rise of purpose, and in particular, brands tackling more social issues. Sometimes brands are actually acting more like activists than you would expect companies to behave. Brands take on such issues as sustainability, diversity, inclusion, gender equality. And we’re seeing that those kinds of campaigns are actually performing really strongly. And we’ve been seeing them from across the world, I would say. Certainly, some markets more than others. I think in the US we definitely see it a lot, in the UK, for sure. But as a general trend, companies are looking to stand for something more than just delivering profits to their shareholders. And I think that’s a really big opportunity for public relations people, public relations agencies, communications departments etc. So that’s the first trend.

    The second one is that we’re seeing an increasing use of technology in different campaigns, for example, artificial intelligence, virtual reality, digital apps and platforms that simply were not accessible five years ago.And finally, we’re just seeing a real explosion of work beyond the traditional media relations, into a huge range of areas that include, for example, digital platforms, social media channels, visual content, memes, apps… This is also, I think, something that we wouldn’t have seen even five years ago.

    • Thank you. But is there a particular difference between various regions? Is EMEA different from Asia Pacific and America different from all of them?

    It’s really hard to see very strong trends on a regional level because, the best work in each region actually looks quite similar, regardless of what region you’re looking at. I would say, broadly speaking, work that we see in North America tends to be more commercially sophisticated. There’s more emphasis, I think, on selling products. In EMEA, Europe in particular, has always had a really strong social component. It has always done a really good job of speaking to the full range of stakeholders. And that’s something we continue to see. In Asia, it’s very hard to generalize across the whole region. In India, we are seeing really strong development of purpose-minded work. Some of the best purpose work we see across the globe comes from India. We also see some really interesting consumer work from Australia, for example. And then we see some very strong technology solutions from markets like China and Singapore. And I would not leave out Japan either, because in Japan there is really smart thinking, whether it’s digital, whether it’s highly creative, whether it’s fuelled by technology. So, it’s hard to look at it from a kind of regional level and make any strong conclusions, I’m afraid. I think that, actually, what we see is that the kind of thinking that is propelling the best campaign is crossing borders around the world. And it’s not defined to any one region.

    • Several years ago you moved from Europe to Asia and now can compare communication markets in these regions. Are such trends as new technologies, AI, machine learning in China differ from the rest of the world?

    Is the technology more sophisticated in China? Perhaps. I think they’re just far more comfortable in using the technology and there are far fewer concerns around issues such as privacy than there are in the Western markets. So, you’re seeing a much more widespread adoption of technologies like artificial intelligence, machine learning, really sophisticated data analytics that often focus on social media channels and can help connect, for example, social media content for commerce. Having said that, I will say that investment in these technologies in China is higher than most other countries. So, whether it’s tertiary institutions, whether it’s state-backed companies or whether it’s private enterprises, there is an incredible amount of investment in new technology and that is giving China something of an edge in terms of how to adopt and deploy all of these technologies. And we see that in a lot of the communication work coming from China. I think the ability to bridge content to commerce has only really been accomplished in China. And the reason for that is because of the investment in the technology, but it also because it’s much easier to create a system like that in the absence of relevant privacy regulation.

    • Do new technologies in Asia create additional opportunities or difficulties for communications?

    The opportunity for communications in terms of adopting new technology is, ideally, that it should help them to do more effective work and derive more value from that work. So, do more effective work at a lower price, fundamentally. And yes, we see some of that starting to filter through. I think the jury is out on whether you can ever really replace sophisticated public relations counsel with a robot, although, from some of the work I’ve seen, perhaps a robot would have been a better option. But I think there are real questions around privacy. There are questions around security as well. And of course, there is the potential loss of humanity, if technology is allowed to dictate too many decisions. There is already a concern starting to arise about the use of facial recognition, in some cases without permission. You mentioned China’s Social Credit System. It’s difficult to say how difficult all of these things would prove for communicators… But there are some issues to be wary of.

    And then the other challenge for communicators is simply the effectiveness required in technology. The costs have really come down for certain types of technology and that’s a definite bonus. But it still requires agencies and communications departments to invest in the technology. It still requires upgrading the skills, it requires them to hire the right talent. And we haven’t really seen the right level of commitment across the public relations industry. There’s also the competitive difficulty, because if they don’t do it someone else will.

    • What are your thoughts on the recent situation with Huawei and its communications? Could this be a trend, do you expect similar cases in the future or was it just a one time thing?

    Yes, I think we can expect more cases. I think, in particular, given the kind of heightened geopolitical tension – trade between the U.S. and China, and the opposition in the U.S. to Huawei – this suggests that you will see the same sort of dynamics at play for a Chinese company that is attempting to expand globally. And this hasn’t just been Huawei. Before Huawei we saw similar issues affecting other Chinese companies that were trying to go global. I don’t think any had received the scrutiny that Huawei has, because Huawei is a Chinese company that has grown so rapidly and posed such a disruptive threat against the global order. It also focuses on quite sensitive industries in terms of telecommunications and mobile technology. So yes, I think we’ll certainly see this kind of thing happening more and more. If you think about Huawei, for the better part of a decade the company has been locked in a seemingly never-ending series of battles to ease suspicions in the West, where its links to the Chinese government are regularly questioned. Huawei is not the first Chinese company to complain about unfair scrutiny – Alibaba, for example, has done the same. And I think that is actually fair for both of those companies. I do think Chinese companies receive an unfair level of scrutiny in Western markets. But of course, whether it’s unfair or not, it’s still going to happen. Companies like Huawei have to realize that if they don’t step up their public relations approach and adopt a much more sophisticated communication mindset then they are going to trip over these obstacles just like Huawei has.

    • What are the key learnings that businesses can take from the situation with Huawei?

    It really comes down to culture, I think. Huawei’s culture is sometimes described as a ‘wolf culture’ and it’s very hard to explain to people who are not familiar with China. It’s a culture that has given it a real edge in terms of business results. But it’s not the kind of culture that deals well with the kind of global scrutiny it’s receiving now. It’s a low trust culture and this kind of reverberates out. Huawei, for example doesn’t trust foreign staff. And so, even if Huawei culture is more extreme than most Chinese companies, it is still symptomatic of Chinese corporate giants. If these companies are really serious about trying to expand successfully overseas, they’ve got to adopt a much more sophisticated understanding of what public relations mean in foreign markets. PR is not an expenditure – they have to employ the right people in the right markets, empower them and trust them to have good public relations support employed on the ground. And we haven’t really seen that for Huawei except for the last 12 months. One of the big problems for Huawei is that they really only started getting to grips with the public relations challenges over the last twelve months. And they had a whole decade to prepare. Their CEO didn’t give any interviews for the first three years of Huawei’s global expansion. And that’s a basic tenet of public relations. It requires a fundamental change in strategy from the Chinese corporate giants. And Huawei is trying to make that shift now, but it’s something that will be very difficult for many Chinese companies to grapple with.

    • Is it the same for other companies? For example, if there would be a local Russian company that wants to be successful globally, does it mean they need to follow the same advice – employing the right people on the ground, be more open, change the culture to adapt to global scrutiny? And going back your answers to the first question, what are the biggest trends – tackling social issues, talking about sustainability, inclusion and etc. Can we generalize this and also use this in an example for Russian companies as well?

    I’m not so well-versed in Russian corporate culture. My suspicion is that because Russia has a more vibrant business media, Russian companies are probably more comfortable with the level of scrutiny than Chinese companies are. But everything else you said, absolutely. I think, first of all, being prepared for scrutiny and having a strategy in place to deal with that – hiring the right people around the world, trusting them and empowering them. Hiring the right agency, listening to their advice. And taking the concerns of the communities, in which you operate, extremely seriously. That’s the best public relations strategy for any company operating in multiple markets. That includes good government relations. But it also means something that you could perhaps call a charm offensive – explaining the value that a Russian company can bring to a manufacturing community in the US is one of the most difficult conversations to have. People want jobs. But hiding and pretending these issues don’t exist and treating these kinds of questions with suspicion and hostility only makes the situation worse and we all know how the media likes to operate. These kinds of matters can suddenly be blown out of proportion.

    • Recently PR has been actively expanding into the advertising territory with PR budgets rising and advertising budgets falling. Can we expect the continuation of this trend and where it can lead us?

    What we’ve seen is that in many mature markets, advertising budgets are falling. But in many developing markets, advertising budgets are not falling – they are increasing. PR budgets, by and large, are not rising in many places, from what we see. . Instead, what we’re seeing is that the PR industry is growing by accessing budgets that were once earmarked purely for advertising agencies. So, they’re able to expand their services, they’re able to access budgets that previously they couldn’t. Will PR oversee advertising? In some cases, yes, but actually we see the converse happening more often. And one of the trends is the convergence of the in-house communication and marketing departments. Now, the big question when that happens is who will lead the merged department? Usually the communication head has a better range of skills, because they’re used to dealing with a much broader set of stakeholders than the marketing head. And even though that’s usually the case, more often than not, it’s the marketing head that takes over leadership when there’s this kind of convergence. The reason for that is because the marketing head is often perceived as being more powerful within a company, they have a bigger budget, they also have a higher profile and are more comfortable with risk. In many cases they may be younger too. So that trend can pose a significant threat to the public relations industry.

    The traditional head of marketing – the marketing director – would be used to handling a oneway communication with the audience, because advertising is basically a one way communication. And if they are now more involved in public relations, they need to learn to respect the differences of PR and to be more in a dialogue with the audience.

    I think it’s something that senior marketers still struggle with, actually. You see the missteps of marketing departments — the infamous Pepsi campaign, which was, by all accounts, signed off by the marketing people who didn’t involve the PR people. It turned into a crisis. I’m referring to the Pepsi campaign with Kendall Jenner. Typically, marketers aren’t that comfortable with this idea of consumers responding and consumer blowback.

    Regardless, what we are seeing is that marketers are becoming far more comfortable with these ideas. The best marketers in the world, and this is borne out by our Influence 100 research, now have a very sophisticated understanding of public relations. A great example of that is P&G’s marketing operations.I think there are many others on the Influence 100 who are those that understand public relations as well as any communications expert.

    • What are the key trends in the Holmes Report Global Top 250 PR Agency Ranking?

    The headline figure is that the industry grew by 5% again. We described it as the second consecutive year of slower than expected growth. Despite all of the advantages that the public relations industry should have at a time like this – disciplines converging, the power of earned media, companies tackling social issues – these are all things that should play to the strengths of public relations and yet, despite that, the industry is growing at around 5%, which I would suggest is a little underwhelming.

    • Last year Russian agencies returned to the Holmes Report ranking. What trend do you see this year? Is the number of Russian agencies in the rating rising? What are your thoughts on Russian agencies being a part of the rating?

    It has increased since last year. We’re very happy about that. It’s a very big change from the situation before we partnered with AKOS to introduce this auditing requirement. But I am extremely happy with the situation now. I think it is a huge step forward for the credibility of Russian agencies and for their global reputation. In terms of addressing ethical questions about how they report numbers, I am somewhat surprised that this initiative has been so successful. I think AKOS deserves a huge amount of credit for helping us make this work. And to be honest with you, I expected much more opposition from the Russian market. But instead, it seems like, for the most part, the Russian market has supported this process. And I’m extremely encouraged to see that as well. Our ranking is only as strong as it is trustworthy. If people don’t trust the numbers, then the ranking becomes meaningless. It’s very important for us that we’re able to vouch for the credibility of these numbers. So, I think this is a really important trend for Russian agencies. I’m very hopeful that we will see more Russian agencies being able to fulfill the auditing requirements next year.

    • You have participated in the Leadership Dialogue Forum in the past, this year Paul Holmes is taking an active part in the event. What is the best part of the Forum in your opinion? What is your message to the Russian communications market? Are there any topics or areas that the Russian market must focus on?

    The aspect of the Leadership Dialogue Forum that stood out most to me was the presence of so many students. I think that gave it a really welcome vibrancy – to have CEOs and students there. And I think that’s the most important part of forum. It’s the most important consideration for Russian companies – when it comes to public relations — addressing the concerns of the younger generation. Increasingly those are the concerns that define how businesses operate in the 21st century. And my message for the younger generation would be that public relations is a wonderful profession to be involved in. It gives you a wonderful opportunity and a platform to build strong businesses that take into account the full range of stakeholder and social issues. To help build businesses that truly do act for the good of society. And I think that’s really important for all companies to bear in mind as they it looks like one of the most important public relations trends that they need to be aware of.

    • This year the subject of the forum was focused on reputation in all areas of companies’ dynamics – corporate reputation including reputation and dialogue with employees, international reputation, marketing reputation. So, what do you think about reputation today? What is your professional opinion on the value of reputation across these three areas?

    Reputation is incredibly important across all areas. I would say, though ,that it is difficult to measure. It’s difficult to visualize. It’s difficult to quantify sometimes, but businesses, political organizations and people have learned the hard way that you ignore your reputation at your peril. You’re keenly aware of how important it is when your reputation is in trouble.

    • When we are talking about the protests in Hong Kong, some questions arise. First of all, from the communications point of view – are they making a change? And second, how does it affect businesses? There are reports in the global media that some Hong Kong-based major organizations are carefully trying to get involved in the conversation. What is the correct communications strategy for those businesses?

    Businesses in Hong Kong have largely been absent from the current conversation, which is not surprising. Let’s rewind to the beginning of the protest movement. The opposition to the extradition bill was widespread in Hong Kong and included the business community. All of the city’s Chambers of Commerce were opposed to the extradition bill because it could imperil the commercial operations of companies that are active in Hong Kong and China. That was one of the reasons that the initial stages of the protests garnered so much support.

    Since then, Beijing has been applying an increasing amount of pressure on Hong Kong businesses to step back into line. The best example of this comes from Cathay Pacific, one of Hong Kong’s biggest companies. A few weeks ago, the company’s chairman said he has 27,000 employees and he can’t tell them what to do in their free time, or words to that effect. Many Cathay staffers were involved in the protests, like many other companies in Hong Kong. Last week, the Cathay Pacific CEO and an Executive Director left the company. Presumably this happened because Beijing was unhappy with Cathay’s perceived tolerance for the protesters at the company. This is beside the fact that Cathay has cracked down on people protesting and made it very clear that its staff could not protest and could not get involved in the protest movement. It seems that was not enough for Beijing. We’re seeing ads coming out from businesses and business leaders that parrot a line that looks like it’s been written by Beijing. So, it looks like businesses have been pulled back into line. They are absent. They’re not going to say anything really about the unrest except to echo the same talking points you will hear from Beijing and from the government.

    By and large businesses are not going to do anything controversial. It’s a little bit tricky for them because, for many businesses in Hong Kong, their workforces consist of young people that are sympathetic towards the protest movement. So, it does put business in a difficult position because on the one hand they can’t do anything to upset Beijing. But, on the other hand, they are reliant on their employees. And a third factor is that they don’t want to do anything to upset the protesters because they could easily call for a boycott as well.

    So, it’s a tricky situation for business and I think they are, for the most part, just keeping their head down, which I think is a little bit of a shame. I think there is opportunity for an enlightened business leader to take on a leadership role here in a way that doesn’t necessarily upset the parties involved.

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