Right spin for boutique agency

Public relations (PR) industry in the region "has room to grow" despite difficulties amid the global financial crisis. The sector currently faces challenges of PR value measurement and quantification. There is also a pressing need to educate clients about the role of PR not as luxury tool that comes with successes, but as a necessity to keep a balance during downturns.

Samer Mahmoud Renno, Chief Executive Officer, Renno Communications Group, says a boutique PR agency has more chance to survive during a crisis as during such times clients seek efficiency and innovation.

Speaking to Emirates Business, he stressed the need to distance the practice of adopting to obsolete measurement tools such as Ad value Equivalence and move on to more accurate methods to better justify the importance of investing in PR.



In the current crisis, apparently the use of PR has increased in marketing. Can you define the growth of PR activities have gone up in the first half of 2009?

PR enjoyed an overall good performance in the market over the past seven to eight months due in large to the immediate requirements that some companies – especially in the financial/banking and properties – had to effectively communicate their current standing in the industry and market, and/or to manage the rising crisis situations that were either directly or indirectly the results of the financial downturn. Unfortunately, there are no specific numbers in the region that evaluate the current standing of the industry pre- or post-financial crisis, while in the US, PR and Communications trade associations constantly work on gaining insight on the development of the industry. According to a survey of firm principles, conducted by the Council of Public Relations Firms and Kelton Research, 61 per cent of participating firms grew their top line in 2008, while expectations for 2009 were tempered, since public relations firms were almost as likely to predict a decline in revenue [28 per cent of participating firms], compared to 33 per cent expecting growth, with at least 39 per cent expecting to match last year's earnings.

Advertising is facing tough challenges as clients are seeking audited figures of publications and the quantified reach of ads to the audience. How does PR quantify reach and effectiveness?

In my agency, I implement pre- and post-evaluation methods of KPIs [Key Performance Indicators], where we work on ensuring that our proposals at the onset of the relationship with the client are developed strategically and in a manner that allows us to implement them and measure the deliverables as well. Additionally, surveys and perception audits, which we develop and manage internally, also play an essential role in gauging the feedback of stakeholders in a manner that allows us to measure the reach of our communications programmes and effectiveness of the client's key messages.

What has been the biggest challenge for PR industry during the current crisis?

The biggest challenge has been to communicate to clients – existing and prospective ones – that tough times call for tough measures, including the availability of strategic communications counsel. The PR industry also has a responsibility of evolving from conventional services to offering innovative solutions to tackle the negative repercussions of the global crisis, which unfortunately have touched many lives and industries. I believe in the motto: To survive is to innovate. Agencies need to understand better their clients' needs, especially in these tough times, and to offer expert opinion, consultation and solutions to assist them in surviving the crisis.

Dubai has given birth to lots of smaller and boutique PR agencies. How do they survive amid large international PR agencies?

As a regional boutique agency that has been in business for 10 years, I have opted to maintain the boutique nature of business. This has proved over the years to be highly effective, especially when taking into consideration that a number of companies in the region have started to steer away from the 'bigger is better' concept and are starting to look for the 'best' solutions from agencies who are willing to work around the clock to deliver efficient and creative services. The matter of survival should be directed in these tough times to the international conglomerates that have to meet the bottom line of revenue to survive. Boutique agencies on the other hand can easily minimise their expenditures and are more dynamic in turning around a bad situation without having to go through the red tape that many international agencies, especially the ones owned by major media groups, go through.

In media monitoring, different companies use different yardstick for measuring the effective reading by the target audience. What according to you is the correct formula to evaluate editorial value of a PR exercise? And why?

Measuring public relations is not about evaluating AVE (Ad Value Equivalence) of clips, as such method is outdated and long been discarded in the developed nations and dubbed a "dinosaur" system that compares apples to oranges – i e two different disciplines. Many clients in the region still prefer to receive monthly monitoring reports that show AVE for each clip, to justify the savings they were able to achieve from utilising PR versus advertising and to show the management that their ROI [Return on Investment] was as anticipated if not better.

In fact, international PR industry bodies were more vocal in their condemnation of the AVE media analysis process. The Public Relations Institute of Australia (Pria) issued a Position Paper in 1999 on research and evaluation where it stated that it did not recognise Advertising Value Equivalents (AVEs) of editorial media coverage as a reliable or valid evaluation methodology. Editorial and advertising cannot be directly compared.

Several industry experts in measurement believe credible media content analysis methodologies evaluate media coverage based on a number of criteria such as: The medium in which articles appear [circulation and target audience reach/relevance]; positioning such as front page or headline news, main page or run of paper; size or length; headline or photo mentions; issues discussed; messages contained; and sources quoted (share of voice).

Hence, measuring public relations programmes, be it conventional media, social media, crisis communications, internal and external initiatives, need to take into consideration the pre- and post-effect such a programme has on the target audiences in a particular target market. Research is not about finding the easy route, but is more about analysing all internal and external factors and is also about being candid with the client on issues of successes, shortcomings, improvements, defaults, etc, that their exercise has faced in the pre and post outcomes.

Media is the first to get affected during a crisis as most industries cut advertising and communication budget to save in cost. How did the current crisis affect the PR industry and how severe was the damage?

The PR industry remains the least hit among its counterparts as a result of the global financial crisis. However, the effects are not clearly visible or scientifically tabulated as yet, compared to advertising or other marketing disciplines. Unfortunately, the issue of cutting down or doing away with the communications/PR budget stems from the fact that many decision makers in private and public institutions around the region view this industry as a tool that should be used in times of economic stability. In instances where the economic boom in Dubai and the region, especially in the real estate sector, led to the eruption of many PR agencies who were dependent on this specific sector, and when the crisis took place, they were the first to be hit, with a considerable number opting to fold instead of evolve. Agencies that handle other sectors such as IT, FMCG and telecommunications for instance, have survived a cut in their overall fees, which had an effect on their bottom line profit and loss. However, that did not result in a complete collapse of their operations.

Media is moving to digital platform, away from the conventional platforms. How does PR change itself to use these new platforms?

PR in developed countries – the US, Europe, Japan, for instance – have progressed rapidly over the years, especially that the industry matured in those markets many decades prior to the entry of PR into our region. Hence they have a lead advantage over their counterparts in the Middle East. As such, I believe the challenge does not lie in whether the PR industry in the region can evolve fast enough to accept the development of the media and especially the rapid reliance on digital platforms, but more or less on how PR agencies in the region can adopt and implement such platforms and most importantly try to sell those services to their existing and prospective clients. Digital PR and social media are vastly gaining grounds in developed markets, where reliance on blogs, Twitter, Facebook, Youtube, Podcasts, chat rooms and forums among others is getting stronger and is in effect shaping public opinion. Innovation is imperative in PR and developing the industry to compete on much higher levels than conventional tactics remains a challenge that many PR agencies and their stakeholders in the region will have to address soon.

What is your personal understanding about the future of PR industry in the region?

The PR industry in the region remains confined to conventional tactics, where some clients' understanding centers on press release distribution and the generation of media coverage. With the exception of Dubai, to a certain extent, many private and public institutions in the region remain focused on the old school that PR is a luxury that should be utilised in times of glory and to communicate successes only, not knowing that PR is a necessity that proves to be beneficial to the success, growth and management of any reputation in times of need as well as times of stability. I believe there is more room to grow, especially because many of the vital sectors such as, IT, real estate, telecommunications, are still in the developing stage and have in the past few years made remarkable strides to establish a solid foothold in the region and internationally as well, which means that they require adequate and professional communications strategies to support them with their plans.

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