The case for communication in a strong economy

It’s getting colder in Sweden. In this year’s elections the anti-immigrant far right party “Sweden Democrats” won seats in the parliament and became the fifth biggest party, maintaining the balance between the liberal and social political groups. Extreme fundamentalists are threatening Swedish freedom of speech and media. On Saturday December 11 we also had our first suicide bomber. Fortunately nobody else but the bomber was killed.

Amidst all this, the Swedish economy remains strong. Sweden is doing well. Consumer demand is high. Young people, particularly those born in the 70s, are using their homes as cash machines with mortgages up to 90% of housing value. The money goes to new kitchens and bathrooms and to pure consumerism like flashy cars, boats and country houses, vacations abroad and other luxuries. Clearing the mortgage feels very old fashioned and the interest rate is very low.

How does this influence business and organizational communications with customers and interest groups? In 2011 most consumer product companies will increase their (already sizeable) marketing budgets. The largest companies will spend up to € 6 per capita in advertising and PR. Altogether this means about € 40 per capita spent by the 20 largest advertisers.

How will these hundreds of millions of Euros be spent?

IKEA says: “Everything we do aim to maximize our meeting with customers. For this purpose our own channels are the most important ones: The catalogue, the web site, the stores and social media activities all give good returns.”

So far TV is the main channel for most big companies. But the commercial TV channels are becoming very crowded and, as a result, organisations’ presence in social and digital media will increase. So will company magazines, retail media, newsletters and events.  Various loyalty programmes are being re-introduced to maintain customer loyalty. But many are now raising a warning flag – too much choice tends to dissipate investment across too many channels, making advertising and marketing impact less effective.

The wiser organisations are beginning to rely more on strategic and creative advice rather than advertising.  The more visionary companies have started to understand that the walls separating different roles and functions need to be torn down. This means, for example, bringing together both communications and personnel roles under one roof so that internal and external communications can be coordinated and recruitment undertaken from an overall brand perspective. As these communication activities increase, many will use in-house staff for social media activities.

With this backdrop, PR and advertising agencies will need to increase their focus on delivering quality advice and increasing creativity to maintain and increase profitability.

Rita Platzer

RPPR AB

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Twenty years on and some things never change

Like most busy PR agencies, mine often has difficulty in finding time to address internal matters which become secondary to the needs of our clients.

This has been the case with our imminent 20^th anniversary, but after a hectic last couple of months we can at last plan how we want to celebrate.

Looking back over the years there have been a few milestones, not least our first major press conference to allow a Dubai Ruling family member announce the development of a new golf and tourism attraction on the Creek.

The fact that this came a month after Iraq’s August 1990 invasion of Kuwait, with much of the world’s media in residence at Dubai hotels awaiting the outbreak of war, meant a larger than normal attendance at the event.

Much has changed since then, but some things do not change. In promoting a one-make motor racing series now popular across the region, particularly in Saudi Arabia which produced the first champion, we have recently come across an old adversary.

The policy of some newspapers to publish news delivered by PR agencies only when the client involved commits to advertising, is well known in this part of the world, particularly in Saudi.

Of course, the press needs advertising to profit and survive, but equally crucial is its ability to deliver informative, educational and interesting editorial content.

This attracts, retains, and grows readership and, consequently, draws advertisers. Just as it is the PR agency’s duty to deliver material that is of genuine reader interest, it is the responsibility of the press to ensure that what it prints is there because it is interesting.

If a PR agency fails to deliver, its client’s news releases, quite rightly, end up in the trash. But when a newspaper or magazine publishes material purely on the basis of the provider being an advertiser, its editorial credibility can suffer, reader interest can fade, and the value of placing advertising in its pages can diminish.

Advertising agencies have, for years, bought space with one hand and held out the other for free editorial supplied by their PR division or associate PR agency.

This can work, and it can fail, commonly when the advertising stream dries up, as it did during the global downturn as those who have used advertising muscle to buy editorial credits found the door closed when the ad’ men noticed they had stopped spending.

It fails also when the provider of editorial material lacks editorial expertise, basic writing skills and attention to detail, and its offering appears on a newspaper page like a poorly conceived advertisement, word for word, riddled with grammatical errors, inaccurate information and mistakes.

PR agencies like mine stick to their guns. We deliver news on companies and organisations, events and activities, which is of interest to readers. We ask the press to consider this for publication based on its editorial merit only. They decide what fills the pages and what makes headlines. In most cases, access is granted based on editorial worthiness and reader interest.

So, to the energy drink company which is buying editorial space in Saudi right now, we advise caution, and recommend you speak to us, or someone like us.

To the Editor who published one of their horrible press releases this week, thanks for caring when we told you that what you printed was not only very poor on quality, but also factually incorrect. Now to our 20^th birthday.

Tony Lewis is Managing Director of Dubai-based Total Communications, the Arabian Gulf partner of ECCO International Communications

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