The shift of PR wealth to Asia

June 30th, 2011 / 12:41 am

Here’s my latest column as the current Asia-Pacific contributor to The Holmes Report’s ThinkTank section:

Travelling in Europe the past few days, this Reuters headline caught my eye: “Asia surpasses Europe in millionaires and wealth” (based on a study published by client Merrill-Lynch).

It seems an apt milestone given that I have been delivering speeches on the theme of “the rise of Asia in the world of PR” and what European companies need to know about communicating in the region.

I think most people realize that the global economic order is shifting and that one day China will become the world’s largest economy. What’s less understood is how fast this is happening and the sheer scale that Asia is forecast to achieve during our lifetimes.

Citigroup recently projected that the Chinese economy will be bigger than each of America’s and the EU’s during the 2020s. By 2050, it will be much bigger than those combined, with about half (49%) of the world’s economy in Asia, up from 29% today. By then India will have the second largest GDP, the US in third place, followed by Indonesia and Brazil with individual European economies trailing far behind.

The PR industry will reflect this new economic order, with Asia commanding a much greater share of investment in communications services than ever before. By some estimates, the entire global PR consulting sector is worth $10 billion, but currently no PR firm bills even $100 million in Asia.

Two trends will change that soon enough:

First, the well known Western multinationals will boost their PR spending in Asia.

Today many of these are chronically under-investing in the region, with budgets flat and overly weighted towards mature Western markets. Many suffer from dated thinking about the fair market value of PR in the East as well as from chauvinisms concerning service quality rooted the stereotypes of another era. Still, for these companies, thriving in the future means more PR investment in Asia, the region that offers far greater growth potential than developed countries drowning in debt.

Second, the now one third (34% according to Forbes) of the world’s largest 2000 companies now based in Asia.

We’ve never heard of most of these emerging multinationals, and now they are starting to invest real money in global communications from an Asian platform.

That’s an important point, because PR campaigns in Asia have often been ‘hub and spoke’ efforts where decisions are made in Western capitals with regional headquarters city hubs administering implementation. Domestic PR efforts have tended towards localisation of globally supplied template approaches to PR.

Nowadays, with the face-to-face agency-client relationship based at the Asian headquarters, PR people in the East are gaining more opportunities than ever to devise and manage global PR campaigns. This is proving quite an adjustment for some in Western agency networks unaccustomed to following leadership direction from Beijing, Delhi, Seoul and indeed Tokyo. It’s also daunting for some people in senior positions who may have never run an international campaign from Asia before and who I’ve noticed may therefore suffer from a lack of confidence in leading their global charge from the East.

There is a long tradition of complaining about Western-centrism in Asia, with many derisive of those with ‘global’ titles who are thought to lack understanding of the Asian context. Sometimes these complaints seem valid but what we’re going to find now with this shift of global PR power is that it’s easy to criticise but a lot harder to paint on the bigger global communications canvases were seeing on our side of the Pacific for the first time.

Categories: Asia
comments(0) Tags: asia, emerging MNCs, PR

Digital crisis communications in Asia

June 18th, 2011 / 2:03 pm

I have just finished doing an e-mail interview for a major Asia-Pacific marketing publication, and here is what I submitted (they’ll selectively use some quotes, but seeing how I spent all this time jotting the answers, figured I should post the whole thing here on my blog):

What is accounting for the growth of crisis management as a PR service?

The demand for crisis communications consulting is going through the roof right now because social networks are creating so many additional touch-points for risk and reputation. Companies that in the past may have been reluctant to admit the dimensions of a mistake now realize that digital creates such radical transparency it is pointless to be defensive and try and cover things up and conversely profitable to be proactive and engage people with the facts of the matter. Some folks falsely believe that PR is just about brand promotion but these days its role in reputation protection is more important than ever.

How is digital and social media changing the crisis management landscape and are in-house and agency PRs equipped to cope?

Worldwide the PR industry has been quickly retooling its factory to capitalize on the new possibilities of digital for crisis communications. We have always been in the relationships business where conversations and engagement come naturally, so we’ve really been able to turn on a dime in a very short period of time during the social media revolution. The fact that PR firms are themselves in the process of becoming social businesses helps us counsel clients on social media with an assured confidence. We’ve been doing a lot of development in digital storytelling, programming and weaving repurposable content across platforms into streams.

On the client side, some in-house teams are modernizing fast but others are mired in the assumptions of another era. In Asia a lot of companies are making excellent progress but all too often, corporate communications remain centered on one-way, top-down monologues where ‘face’ can sometimes seem more important than Facebook.

Is there significant difference between crisis management in Asia and the West?

It’s difficult to make sweeping generalizations, but I find the role of lawyers in a crisis is far stronger in the West, especially with respect to the making of an apology, which comes more easily to corporations in the East which may be less concerned about how saying sorry for making a mistake somehow constitutes an admission of guilt with liability implications.

Do Asian governments and corporations take PR seriously enough as a way of handling a crisis?

It depends which government we are talking about. I think the Chinese government takes PR very seriously and it has demonstrated crisis communications prowess in past, especially in the aftermath of the 2008 Sichuan earthquake. Sadly, the same cannot be said of the Japanese government, which has famously not taken PR seriously enough in the wake of the country’s recent triple disasters. In terms of response speed, decisive leadership communications and use of social media, China has generally evidenced a better command of communications. Then there are the Koreans, who are very advanced on digital crisis communications in particular.

How do cultural and geographic differences in Asia impact responses to a crisis?

The diversity of Asia between and within countries makes it challenging and yet critically important to master the nuance and tonality of the language that is used in highly sensitive issues management and crisis communications situations. To some extent we have a ‘lingua franca’ in the world of PR, but what works in English doesn’t always work in other languages so a tailored and not just translated approach gets the best results. English can be so direct and subject-centric and ‘conclusion first,’ whereas some Asian languages can be quite the opposite, so knowing this can make all the difference.

I think especially in East Asia the transcendent importance of ‘face’ is such that companies are reluctant to engage in peer-to-peer communications with their communities online, with fear of losing control and thus face having the effect of dampening the kind of dialogue that might help defuse a crisis situation.

Is the PR industry in Asia sophisticated enough to adequately provide this kind of service and where can improvements be made?

The premise of this question underscores the work we need to do in Asia but also the biases we need to correct and update. In my view, there is plenty of sophisticated crisis communications consulting capacity in Asia, but it overwhelmingly resides in the international PR firm ‘ghetto.’ There are some excellent domestic in-market independents coming along but there are many others who suffer from development challenges.

What I have noticed is that there are too many crisis communications poseurs out there, ‘experts’ who can deliver a decent training seminar but then haven’t the foggiest when a real situation explodes. I also see this tendency with social media for people to share information about crisis communications with others online and then to overestimate the extent of their own expertise. There are those who seem to feel that to Re-Tweet the thinking of others is to become an expert themselves.

What specific training are brands doing in this area? Is it enough?

What we’re seeing is accelerating demand for full-scale digital crisis simulation training. The old analogue crisis simulations were heavily scripted, but to those participating the format presented them with some daunting if unlikely dilemmas. Now the new digital training moves at warp speed and confronts trainees with a bewildering array of wildfire stimuli that simulate real-life social media conditions.

What are your top tips on the best ways to handle a crisis?

There is no doubt that speed is a key factor in a crisis, but responding accurately is equally important. Better to refrain from speedy and sloppy glib statements and instead take the time to transparently communicate the verified facts of the matter.

Times have changed and the rules of the game have evolved. It used to be that crisis communications were defensive and reactive, with holding statements used like protective shields to keep critics away. Nowadays I think crisis communications need to be aggressive and proactive, where we invite people to participate right from the start and then communicate continuously.

Passively waiting for the crisis to pass and then rebuilding reputation is arguably an outmoded approach because in these digital times by then it is too late. It makes more sense to actively prevent the storm in the first place by engaging people, listening to what they have to say, apologizing for mistakes and humbly asking for ideas to help ensure continuous improvement. Brands used to act like things; now they are expected to act like people. This is especially true in crisis communications situations which are golden opportunities to showcase a company’s character at its finest, with personality, humor and gravitas ideally on conspicuous public display.

Categories: crisis communications
comments(0) Tags: asia, crisis communications, digital, PR

Helping Asian brands go global

June 1st, 2011 / 7:51 am

Here’s my latest column as the current Asia-Pacific contributor to The Holmes Report’s ThinkTank section:

I first moved to Asia a decade ago. Those days, when people in the public relations business referred to ‘global multinationals,’ it was almost always in reference to Western companies communicating from the outside into Asia.

All of this is changing, and changing very fast: large numbers of rising Asian multinationals are starting to communicate on a truly global basis as never before, and even the reluctant Japanese companies – faced with a dire, declining domestic marketplace – see the urgent need to aggressively invest in international PR.

Based on the statistics, we shouldn’t be too surprised. According to a new Forbes list published last year, a whopping 34% of the world’s top 2,000 companies are now based in Asia.

Maybe most of these 689 companies are generally unknown around the world. But often for imitative reasons following what the old Western multinationals have done before them, these new Asian multinationals increasingly believe that communications can help them build profile and secure competitive advantage. Thus many are asking themselves: “What is PR and how can we use it to help achieve our commercial objectives overseas?” Given the enormous potential that this market represents, the opportunities for the PR industry are compelling and we in the agency business had better be ready to provide some convincing answers.

I can tell you right now that while this next-generation multinational communications market is going through the roof and will be substantial, capitalizing on this trend is without a doubt among the toughest challenges in PR consulting.

Those lacking patience and perseverance need not apply for this kind of work. Quite a few of these ascendant multinationals are complete newcomers to modern marketing, and so convincing them to conduct pioneering PR campaigns can be a daunting proposition to say the least.

Cultivating relationships carefully, understanding the cultural elements in play, starting slowly with a few often underfunded projects to build confidence, and checking arrogant attitudes at the door are all prerequisites to success.

Keeping in mind that inside many an Asian corporation saving ‘face’ can be much more important than Facebook, social media represents both a challenge and an opportunity.

On the one hand, it can be difficult to persuade conservative executives accustomed to exercising the prerogative of top-down control that nowadays the credibility of communication comes from peer-to-peer conversation with people who expect to be heard. But on the other hand, because digital is by definition about data, now we can furnish the tangibility of numbers and proof of PR’s power to make the abstract elements of communications more understood in a clear way that commands greater budgetary resources.

Dynamic talent combinations agency-side are key; that means world calibre foreigners with face-to-face relationship interface in the Asian headquarters cities, working in tandem with senior Asians posted in key Western markets. In the past, it’s just been the former, but now the latter is de rigueur for firms serious about surfing the next wave of commercial opportunity in the world of PR.

This is a picture of me and my colleague Margaret Key with my good friend and former client Michael Choo of Kia Motors Corporation. Back in 2002 when I lived in Seoul, Kia become the first rising Asian multinational I counseled on international communications. It was among the toughest and most satisfying assignments of my public relations career.

Categories: Asia
comments(0) Tags: asia, asian multinationals, b-m, holmes, media, PR