create strong financial returns for shareholders. More
companies now believe that doing good is not just a
nice-to-do but essential for a vibrant business.
Consider, for example, the rapid decision by 13 brands
to discontinue their relationship with the Los Angeles
Clippers in the wake of the revelations about owner
Donald Sterling’s comments. Or CVS Caremark’s
decision to stop selling tobacco and Gap’s decision to
raise the minimum wage for its workers.
All of these examples illustrate an increased focus on
establishing trust with customers by doing the right
thing, demonstrating leadership and putting
engagement and integrity ahead of making money.
Shared value is the new normal. However, this also
creates complexity in how CMOs and CCOs divide
A second factor is technology. Consumers, for
example, no longer differentiate an engagement with
a corporation’s call center from a similar interaction
on Twitter. This can cause ambiguity over roles,
organizational structure, skills, partners and budgets.
And it comes just as CEOs are asking both their
CCOs and CMOs to be smarter, leaner, faster and
Here’s an example of how roles are changing.
When Leslie Berland, once the social media lead within
PR at American Express, noted with their research
team that card members were highly engaged in using
social media to inform purchase decisions, it inspired a
partnership with Foursquare. This collaboration allowed
AMEX card members to redeem offers whenever they
“checked in” at participating merchants.
The program, which was met with widespread praise,
was later replicated on several other social platforms.
And today Leslie Berland is [AMEX’s] SVP of digital
partnerships and development, directing eight-figure
If tomorrow’s PR professionals embrace the complexity,
empathize with and satisfy CCOs, but also connect with
and inspire CMOs, they will be in a position to have the
same kind of clout that Leslie Berland does at AMEX.
The Evolution of the PR Agency
The third trend that I want to cover is a dramatic shift
that is taking place in the marketing services
landscape. This is even more profound than what’s
happening in the media or on the client side. So I will
spend a bit of time here in addressing these changes
and then the opportunities it creates for your students.
Again, the overarching theme: blurred lines.
Not long ago, in the “Mad Men” era, agency roles were
very clearly defined. Creative agencies, media buying
firms and PR agencies all had distinct “swim lanes”
that rarely overlapped. That’s no longer the case.
Today CMOs are increasingly telling us that great ideas
can come from anywhere. They don’t put their agency
partners in boxes any more. This blurring of boundaries
between agencies is a tremendous opportunity to
So what then is the future of the PR agency? There are
several ways to look at this.
First, let’s examine it from a pure financial perspective.
According to Ad Age, the top 10 PR agencies last year
amassed $4.5 billion in revenues, or four percent of
the marketing services landscape. This is dwarfed,
however, by digital agencies ($10.1 billion), media
buying agencies ($9.2 billion) and advertising agencies
Of these four categories only advertising agencies are
seeing their revenues decline. Why?
That leads into my more philosophical view of
I am convinced that this is because the era of
“marketing communications” – where classic,
orchestrated advertising leads – is now in winter. It is
giving way to an era of “communications marketing” –
where spontaneous storytelling at the speed of now
(everything we are covering this week) – is in full bloom.
Let’s deconstruct this.
It all starts with a realization that the traditional
meaning of marketing no longer works. In 1959 Philip
Kotler defined marketing as …“Creating, delivering and
communicating value to customers and managing
customer relationships in ways that also benefit the
organization and its shareholders.”
Instead, in this new construct, we see the word
“communications” becoming more prominent. Guy
Kawasaki, a best-selling author, co-founder of
Alltop.com, former chief evangelist at Apple, wisely
defined communications as follows …“The goal of
communications is to provide information that moves
people to action.”
The market is beginning to share our view that
“marketing communications” is backwards. It
stresses advertising, selling and image. It rewards
coordinating and pushing messages in one direction
and, all too often, is only about the short-term.