Profile.ru (05.12.2013): The World of Communications on the Threshold of Great Changes

Main trends in the coming decade, prospects for the Russian communications industry, and new types of services offered by today’s consulting companies.

The world of communications is about to change greatly – perhaps, in a most significant way in the history of the industry. The global communications industry is now estimated at $11 billion with annual growth by 8 % (as of 2012). The revenues of the largest holding companies such as Omnicom (comprizing FleishmanHillard Vanguard), WPP, Publicis, and Havas, increased by 6 % in course in the past year. Communications agencies have over 75 thousand employees across the world.

Global changes in the industry are conditioned by various reasons and above all by the digital revolution that has removed barriers between different areas like advertising and PR, direct marketing and public relations… In the present context, the names of the areas are becoming less important since they are being blended in a ‘mix’ called communications. And the future will be shaped by those companies that provide integrated and complex solutions for their customers.

Categories of people who enter the communications also change: several years ago those were mainly journalism alumni, while nowadays people of absolutely different professional backgrounds pursue this vocation. Communications agencies have video editors, content editors, and creative professionals. Lately, the industry is increasingly revealing a tendency among new employees to specialize in totally diverse areas, for instance, in medicine or in law.

All these trends are explained through transformations taking place in the communications market. Today, customers receive information from various communication channels, including their own mobile devices. Social media are rapidly developing, and the consequences are that no company or even a government, either American, Russian or any other can fully control their information flows. If someone gives negative feedback on a product in New York the audience in Moscow and other Russian cities learns about it immediately.

The same is relevant to Russian companies that are planning to break into new markets by opening their representative offices in the West. They should realize that, in this case, their activities will be closely scrutinized by the European Union and Western media. And a more important thing may be that they will be assessed online by their customers. An in the end, their capability to sell their products or services will depend on how they deal with it without harming their reputation. In this case, the companies that did not look at the importance of the corporate reputation management in a timely manner will inevitably face problems.

Changing formats of communications, increasing information consumption, growing social networks, and stronger influence of end users on brands images are now making consulting companies introduce new integrated assessment tools. To meet customers’ needs, FleishmanHillard has developed and introduced an innovative system of corporate reputation management – P.E.S.O. For convenience, the model splits media into the following three categories: Paid-media with paid content, Earned-media are traditional, Shared-media are social, and Owned-media are corporate. It allows to build integrated relations with all types of contemporary media channels. The system is based on scientific approaches, research and analytics, and creates opportunities for complex work with all types of today’s media channels.

How does it work? First of all, it broadens the range of typical PR functions and adds new services and business processes there. Last year, the FleishmanHillard PR company ran advertisements worth hundreds of millions of dollars via its subsidiaries to support President Obama’s election campaign. The advertising support, besides media coverage, was a key part in the campaign. At present, the PR company keeps investing millions of dollars every year in paid information means for their customers. FleishmanHillard understands the role of social media in the modern information space and attracts appropriate experts who are capable of working in the area, suggesting fresh creative ideas for the channel, and providing it with good quality content.

The P.E.S.O. system also integrates the research that helps reveal discrepancies between the company’s profile and its customers’ feedback. An instance is when FleishmanHillard has recently used these methods to study 160 companies in 20 economic sectors. Customers were asked to name most important factors affecting the companies’ reputations, such as, trust in their communications, attention to their customers, attitude to the environment, etc. The questions asked related to many areas to reveal these discrepancies. The study was conducted in the markets of Great Britain, the US, Germany and China, and it scientifically demonstrated the existing discrepancies between the brands’ expectations of their image and their customers’ actual experience.

For instance, one of the studied areas is innovations. Some companies say: “We are very innovative,” and focus on innovations in both advertising and marketing. This is particularly the case of the companies producing smartphones and other devices. However, once you research into its customers’ opinion you find out that they do not find this company innovative. Therefore, this shows a gap between the brand’s and its customers’ views, and you see whether customers believe these devices to be actually innovative or they find them to be a trick the company uses to sell more products.

It is worth mentioning that, with news spreading so fast, it becomes especially difficult to control the situation in case of emergency. Take the accident with the Costa Concordia ship in Italy: the liner’s passengers sent videos of the accident to largest television channels minutes, or even seconds, after the crash. This may happen to any other company even before the company itself becomes aware of the accident. That is why brands should always be prepared for crisis, check their readiness regularly, and realize that an incident with their product or service in a small Russian town will become known to the entire world in the wink of an eye.

Even most successful businesspersons living in Moscow or New York and believing to control everything sometimes have to leave their companies, to sleep, at least. This is exactly when a crisis might happen. No company wishes to face it, of course, however, there is always such a possibility, and the way the company reacts to the crisis may profoundly affect its future. All successful international brands know it. This is why consulting companies develop and invest in special programs of crisis management, for instance, the system of crisis communications advisers certification that helps them to work according to a single standard and be available 24 x 7 x 365.

Emerging digital media, digital content, and social media caused many changes in Russia and CIS states. Nevertheless, local communications companies have all the opportunities to make use of the new conditions. The Russian industry might be better prepared for the new challenges than the West. The main reason is that it is still young. It is decades younger than the similar industry in Western countries, yet it has a whole constellation of experts who have every chance to avoid the mistakes and problems that their Western counterparts had to address, and to more promptly adapt their industry to the new market needs.

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