PR agencies invade adland

Blurred Lines PR is emerging as the latest threat to ad agencies' grip on creative By Lindsay Rittenhouse Illustration by Tam Nguyen Published on October 28, 2019 Robert Wynne, president and founder of California-based Wynne Communications, once wrote that public relations firms “don’t buy ads, don’t put up billboards, don’t come up with catchy phrases to make people buy more products they probably don’t need.” PR firms, he wrote, “as opposed to advertising agencies, promote companies or individuals via editorial content.” They do so by focusing on earned media, versus ad agencies that focus on paid media, Wynne wrote in an Op-Ed for Forbes. Blurred Lines PR is emerging as the latest threat to ad agencies' grip on creative By Lindsay Rittenhouse Illustration by Tam Nguyen Published on October 28, 2019 Robert Wynne, president and founder of California-based Wynne Communications, once wrote that public relations firms “don’t buy ads, don’t put up billboards, don’t come up with catchy phrases to make people buy more products they probably don’t need.” PR firms, he wrote, “as opposed to advertising agencies, promote companies or individuals via editorial content.” They do so by focusing on earned media, versus ad agencies that focus on paid media, Wynne wrote in an Op-Ed for Forbes. That was in 2013—six years and a lifetime ago. Today the lines between paid media (ads) and earned media (editorial coverage) are all but erased, with an increasing number of PR firms crossing into territory once commanded solely by ad agencies. Traditional creative shops have been threatened by the incursion of everything from in-house agencies to consultancies and specialty shops focused on disciplines like experiential and data marketing. In recent years, however, PR has also stepped up to become a formidable foe. The transition is driven in part by marketers’ demands for integrated solutions, the rise of social media and viral content and financial pressures forcing PR firms to redefine their business models to remain competitive. Public relations firms—including Edelman, WPP’s BCW (Burson Cohn & Wolfe) and Interpublic Group of Cos.’ Weber Shandwick and Rogers & Cowan PMK-BNC—are no longer judged solely by the number of media impressions they generate for a brand. For the past five to 10 years they’ve also been taking the lead on creative, social, digital and paid media. Look no further than The Bell: A Taco Bell Hotel & Resort. The hotel, open for just four nights in August, sold out immediately to reporters, influencers and some Taco Bell enthusiasts who experienced a Fire pool, custom drinks like Baja Mango Mojitos, and, of course, lots of fried, greasy food. But the hotel wasn’t a stunt cooked up by a creative agency. It was the result of 18 months to two years of work with United Entertainment Group and Edeleman. The firm’s idea for the hotel won out against pitches from Taco Bell’s other agency partners after the fast-food chain issued a brief asking for ways to take the brand that is “for everyone” and make it “exclusive in a way that holds people’s attention,” says Russell Dubner, Edelman U.S. CEO. “It shows that we’re being asked to solve problems that you can’t advertise your way out of.” Outward-facing work like this is the result of some deep internal restructuring. In February, Edelman, the world’s top PR firm by revenue, brought on its first global chief creative director, Judy John, former Leo Burnett chief creative officer of North America and CEO of Canada. John, one of the creatives behind Always’ #LikeAGirl campaign, leads Edelman’s 600-person team of creatives and planners globally. Edelman has made other significant hires from top ad agencies including McCann, Deutsch, McGarryBowen and Digitas. It also recently named Yannis Kotziagkiaouridis as its first head of data and analytics, tapped Jacob Loban as U.S. head of performance marketing and Theresa La Montagne as U.S. head of data and technology services. The firm says nearly one-third (31.5 percent) of its business now comes from brand marketing; crisis and management makes up 36.4 percent. Digital comprises 18.7 percent, public affairs 9.6 percent and intelligence, data and research 3.8 percent. BCW, Weber Shandwick and Rogers & Cowan PMK-BNC have enacted similar changes. Weber Shandwick says it doubled down on data, technology and innovation with the hiring of specialized talent including data engineers, paid media professionals and media forensics specialists who it says have the skills to navigate the dark web. Last year, it acquired specialty firms including social-first creative shop ThatLot in London and Cappuccino, a creative tech company in Brazil. Weber Shandwick touts content as a core capability to clients, also citing proficiency in art direction, design, video and integrated production; client experience spanning digital and business strategy; insights like planning and analytics; and integrated media including platform strategy, paid planning and buying, community management and influence. “We are brought in maybe 50 percent of the time to be a creative, social or digital partner,” says Gail Heimann, Weber Shandwick CEO and president. Its recent work includes “Pure Sounds of Michigan,” an album of nature sounds the firm made to attract tourists, and a social campaign for Chevy Silverado that leaned on its sponsorship of “The Lego Movie 2: The Second Part.” In Weber Shandwick’s social content, the film’s main characters encouraged visitors to “tap to assemble” a Silverado out of Legos. PR agency and ad agency employment U.S. employment at public relations agencies and ad agencies is down slightly from record levels hit in 2018. But staffing has grown sharply since employment began to recover in 2010 following the Great Recession. Source: Bureau of Labor Statistics. More info: bls.gov. Expanded ad jobs data: AdAge.com/adjobs. Want more data? For ongoing data and insights on all of the most-advertised brands, subscribe to Ad Age’s Datacenter. BCW has added a suite of entertainment offerings, content creation, influencer strategy and media planning and buying. This month it also launched BCW Eventus for creating and optimizing brand experiences through global sporting events. Rogers & Cowan—which merged with PMK-BNC in July to form a mega Hollywood-focused PR firm with a mashed-up name—says it houses a team of 185 people that develop and execute marketing and experiential campaigns, content partnerships, and integration and influencer programs, along with music and entertainment strategies. The shift from traditional communications has been led by CEO Mark Owens, who joined Rogers & Cowan in 2015. Since his appointment, the firm claims to have tripled its brand marketing client roster to include Cisco, Audi, Heineken, McDonald’s, Microsoft and Verizon. Owens says 75 percent of Rogers & Cowan PMK-BNC’s business is now in brand marketing across digital, social and experiential. “PR at its heart is about storytelling,” Owens says. “It’s about shaping the narrative. That’s more important than ever.” Evolutionary forces “The PR industry, with the growth of viral, mobile and social, has gone through a radical shift,” says Greg Paull, co-founder and principal of the global consultancy R3, “and the agencies have had to recalibrate their offerings.” Even Wynne—who made that 2013 declaration that PR firms don’t buy or create ads—has changed his tune. He now says PR firms have to do “a lot more social media and also events—speaking at existing conferences and creating new ones.” “Looking at the column from 2013 takes me back a long time,” Wynne adds. Jay Pattisall, Forrester principal analyst, sees the recent shift in duties as a reflection of “both strategic and economic” factors. “The industry has moved beyond an ecosystem of neatly defined channel or specialist providers,” Pattisall says. “Strategically, marketers are asking for more integrated and holistic marketing solutions that bring together the content and the context. Secondly, agencies have expanded services out of economic necessity. Agencies need to be known for and good at a handful of things in order to sustain their revenue.” PR firms are certainly not immune to the pressures plaguing the rest of the industry: budget cuts, transparency concerns, brands bringing work in-house, fighting for talent and competitive threats from consultancies. “They have to redefine their business models,” Paull adds. “The old business model was about connecting brands with media, and now that’s done organically. The relationships have to change in terms of reallocating their capabilities.” In his view, Edelman is a standout example of a PR firm successfully making this transition due to its independence. “Edelman, unlike most of the others, is not hamstrung by a holding group structure, and has therefore taken the natural lead on communications,” says Paull. He adds that he has seen an uptick in PR agencies participating in traditional ad agency reviews. Weber Shandwick has also tallied some fresh wins, including for a 2020 brand launch of “one of the world’s largest consumer health companies” which the firm would not identify, but says it was selected “over a top U.S. ad agency.” The firm says it also beat out two ad agencies to become agency of record—across creative, experiential, earned and digital—for a start-up in the job search market. PR firms that have adapted to shifting client needs are coming out on top, at least within their category. According to Ad Age’s recent Datacenter rankings of U.S. PR firms by network, Edelman comes in at No. 1 with $545 million in revenue last year, followed by Weber Shandwick ($430 million), Omnicom’s FleishmanHillard ($395 million), BCW ($335 million) and Omnicom’s Ketchum ($301 million). Biggest U.S. public relations networks Estimated 2018 revenue. Dollars in millions. Rank Agency (Company) Revenue 2018 1 Edelman(DJE Holdings) $545M 2 Weber Shandwick(Interpublic) 430M 3 FleishmanHillard(Omnicom) 395M 4 Burson Cohn & Wolfe(WPP) 335M 5 Ketchum (Omnicom) 301M Source: Ad Age Agency Report 2019. Top 25 ranking: AdAge.com/agencyreport2019 The goal remains the same Although PR firms might be acting more like ad agencies, public relations professionals who spoke with Ad Age say—in what could be classic PR spin—they remain true to their strategy of pursuing earned over paid media. “We look at earned media as a mindset, not a set of tactics,” Edelman’s Dubner says. “Communications can and should be the driver of brands. Edelman’s responsibility has always been to come in with a point of view, challenge clients and stretch their courage. That, over time, has really moved from communications to brand marketing, to corporate and public affairs, to digital, to everything.” Edelman’s John says the agency’s professed mandate to pursue earned media through creative was what enticed her to join the PR firm. “I spent a lot of time in creative agencies, and there’s a lot of wonderful things about [them],” John says. “But the paid mindset of ‘you’re going to buy your way into someone’s feed and consciousness’ makes clients more conservative. A lot of clients and agencies are wasting money and making things that consumers don’t care about or engage with.” John says the way in which agencies have approached creative in the past “hasn’t shifted enough to keep up with what’s currently happening.” Weber Shandwick’s Heimann says the IPG firm is also increasingly coming to the table with creative ideas that pit it directly against its clients’ other agency partners. “We are competing against everyone from Droga5 to Wieden to 72andSunny to Edelman to consultancies,” she says. “Everybody is our competitor.” Web production by Corey Holmes.

PR agencies invade adland

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