As he takes up his position as executive vice president of Burson Marsteller China, David Zhao tells PublicAffairsAsia that he is confident of future growth in PR on the mainland
You have worked in Australia and Russia, two very different countries. How does the Chinese PR industry compare to them?
First of all, the industry in China is less than 30 years old. It has only been within the past 10 years that PR as a discipline has begun to be understood and appreciated by Chinese businesses and stakeholders. On the demand side, the level of understanding and expectations vary. Multinational companies are far more sophisticated, while most domestic companies still typically view public relations as propaganda and publicity rather than a business partner that provides value by genuinely engaging and influencing the public. On the supply side, it is challenging to find talent, especially at the middle level, due to more and more experienced practitioners moving to the client side to take in-house positions. Talent retention is a cross-industry issue.
Second, the demand for public relations services is growing as regional economies continue expanding. Previously, our client portfolio was dominated by foreign multinational companies. Now, Chinese companies, particularly those engaging in international markets, have begun soliciting the services of public relations firms as part of their overall marketing efforts.
Third, the industry itself is evolving. We see there are two parallel trends going on: integration and specialization. Increasingly, B2C clients are requesting integrated marketing-PR solutions. The line between PR and marketing is gradually vanishing. In the current Chinese PR industry, consultants often find themselves competing for marketing budgets. The need for one-stop-shopping pushes traditional PR houses to go beyond their “comfort zone” and expand their capabilities to include creative, digital or event services.
At the same, B2B businesses are looking for sector experience, which pushes full-service PR agencies to become more specialized in their offerings in order to compete with specialized boutique agencies, such as healthcare and financial communications. We are also competing with management consultancies in change management, HR consulting firms in internal communications and CSR consultancies in helping corporate world for their corporate social responsibility strategy.
Last, local Chinese PR firms are catching up and aggressively expanding. However, there are tremendous opportunities for international PR firms who have a strong global footprint to service both Chinese and foreign companies not just in China but also abroad.
There have been a recent series of high profile corporate reputation crises in China. You are leading the BM crisis group – what are the most common reputational mistakes made by business in China?
The two biggest mistakes often seen, which often lead to hard lessons, are: 1) Not investing in a rigorous crisis preparedness system and putting it in place beforehand, including risk auditing, scenario planning, stakeholder engagement, step by step response mapping, clearly defined roles and responsibilities among different corporate functions, and a capable in-house communications team; 2) Not being transparent in terms of sufficiently communicating to various stakeholders, including the general public, during the crisis, resulting in being perceived as irresponsible and deemed “guilty” by the public.
China has a fast-developing indigenous public relations industry, with a growing number of local practitioners working on the client side and in Chinese and multinational agencies. What can they learn from more established PR sectors?
At Burson-Marsteller, we practice evidence-based communications. Instead of jumping to a quick solution, we allocate considerable resources on analysis, observation and obtaining accurate insights.
The role of social media has become enormously important in China. How is this impacting on business and the relationship between business and government?
Speed. Previously, in our industry we had the so-called golden role of “the first 24 hours” in a crisis situation. Now we no longer have the luxury of 24 hours – we need to respond immediately and we are expected to respond in a real time manner.
Listening. With the ongoing conversations on social media, if we know how to “listen” and listen carefully, we can get real time insights into how the public thinks and behaves. We no longer need to rely on focus group studies, opinion polls and other traditional research tools.
The world is flat, and even more so on social media. We are now dealing with one public – collective opinions are more important than those of so-called “opinion leaders”.
In many countries, practitioners believe they are ahead of academics in their thinking about professional practice. What benefits can the university sector bring to the Chinese PR sector?
WPP just lunched its WPP School in Shanghai, which offers a three-year communications diploma program in China. The courses mirror the real business world and agency life. The direct benefit will be a supply of professionally trained new graduates ready for the industry.
If you were to give advice to an outsider entering the Chinese PR sector, which are the most important things they should bear in mind?
Digital is a good starting point, as I believe China and the rest of the world we are almost at the same starting line. Lots of (not all) digital experience/expertise can be applied in the China market.
As the market is already crowded with big international networks and local competitors, specialized services focusing on particular industry sectors or expertise would be a good thing to consider.
And as we all know, PR is “local,” so find a firm with a long-standing, reputable record of service in China.
How do you think the Chinese PR landscape is going to change in the next few years?
I definitely see more Chinese companies will be added to the client roster of international firms. The Chinese PR industry is going to export business to the rest of the world.
There will be more M&As with big international firms taking over Chinese shops to boost execution capabilities and geographical reach.
On the client side, they would like to see PR to become consolidated into the overall marketing mix. There will be more collaboration among different disciplines with group companies.
And, while business issues are becoming more complex, we see clients coming to us for strategic counseling more than ever. The Chinese PR practitioners will earn a seat in the clients’ board room when they are facing a critical issue and or making a strategic decision.
What are the key trends currently underpinning the practice of Chinese PR and how does B-M intend to leverage these to build your business?
Rather than a standalone offer, digital services and advice will be integrated into the overall communications programs. At Burson-Marsteller, we have D/BM, an integrated digital and social media offering that helps our clients think digitally and our own client teams act digitally.
As a committed agency in China, we are open to partnerships or acquisitions that will either complement our capabilities or offer new specialized services.
And we are bringing on more strategic consultants with diversified backgrounds and specializations to respond to our clients’ ever-demanding needs.