SECTION 4: The External Challenges


sectn4The rise and rise of digital has given a voice to many more stakeholders. This section of the report explores the external environment confronting communications and Public Affairs professionals operating at the frontline in Asia

_____________________________________________________________________________________________

4.1. Digital and Analytics

VISITHUB
The advent of digital is creating shockwaves for the industry. Its impact cannot be overestimated. The external environment has become social, reactive and immediate. Practitioners need to be agile and adaptable in the way they communicate. Despite making significant investment in digital, many managers believe their teams are “behind the curve”.

While good progress is being made by some companies, the speed of digital innovation continues to wrong-foot many.

Digital has also required communicators to rewrite their rule books. Communications is now two-way. It is a conversation. It takes place on the move, in fewer characters, and needs strong images, insightful infographics and quality video to be truly effective. It is a far cry from the traditional press release and clippings service provided by public relations functions of old. And with digital comes the need for analytics. “Digital and analytics are placed in the centre between brand and reputation,” says one regional agency CEO.

Digital means more than just finding the right words for your company. “Visual is needed – it’s not good enough to have good written materials. You have to tell the story in an individual way. Whether it’s infographics, video or film, the bar has been raised considerably on that front,” says one practitioner.

In some companies there is also an urgent need to convince management that digital really has been a game changer. “We need to ensure that our leadership keeps up to speed with digital and remains supportive of the investment,” says one senior practitioner. “A lot of our clients are also quite traditional and we need to educate them about the need to invest in digital marketing.”

Screen Shot 2016-03-14 at 10.47.00

For those operating in communications roles, both traditional and digital media still present challenges. One Hong Kong-based practitioner operating in the luxury goods sector says that the “overall complaint culture in Hong Kong is on the rise”. She cites the deteriorating quality and professionalism of reporters, especially at the junior level, and the growth in irresponsible comments online, particularly when user-generated content on social media platforms threatens integrity and accuracy.

The rise of digital appears to be one of the critical factors driving concerns about a talent problem. Finding the right quality of people is particularly challenging in the digital sphere, both for in-house communications and agencies, which compete intensely for digital expertise.

But despite the general acceptance of the importance of digital, one practitioner who heads the corporate communications function for a major US financial institution warns that new media should not crowd out traditional media. “We’re at a crossroads between traditional media and new media.  New media has to be learnt at a very fast pace but traditional media has to be balanced, too,” she says.

The same interviewee adds that an emerging over-reliance on digital technology internally may also be resulting in an “over-emphasis on technology and maybe a loss of human contact”, which can impede relations with quite traditional colleagues and points of contact.

In the agency world the new business opportunities presented by digital are clear, but one senior consultant responsible for business development says it is not always easy to commoditise these. “On the one hand, you’ve got clients out there that still want old-fashioned media relations and whose KPIs are all print share of voice-based. These clients are still counting clips – I’ve met two in the past week, both major global brands. On the other hand, you’ve got clients breaking down internal silos and demanding integrated programme planning. The channels harnessed continue to multiply and are further increased when you have to be able to operate on both sides of the China digital firewall. Building teams to maintain and grow profitable business across this spectrum, while keeping pace with new frontiers, is a challenge,” he says.

One agency head says the challenge for consultancies is not digital per se, but rather concerns for how it fits into the broader service offering. “On the one hand, part of the challenge is structuring the business so it can adapt rapidly to the changes brought about by digital. But that is not the biggest challenge: that is simply identifying and responding to a trend. The real challenge is how you integrate these new competencies and capabilities into the business in a way which allows you to ensure continuity of service,” he says.

The same agency director points out that his staff are now encouraged to question clients whose default position is “digital first”. In some situations, he says, more traditional approaches might yield better results, but clients often think digital is the most effective way to approach a particular project.

4.2. Responding to Scrutiny

Among government, regulators, NGOs and the public, levels of scrutiny are rising fast – with expectations of companies also surging to new levels. And for those operating in a public and government affairs function, the rapid rise of the regulator is a clear and present danger. Most senior practitioners view the environment in which they are operating as more complex than ever before.

The continued rise of mega-brands, including some home-grown Asian brands, brings with it greater media attention when things go wrong, one senior communicator pointed out. Another agency-side respondent warned that increased scrutiny is also coming from the investor community. “Shareholder activism continues and more companies need help on corporate governance and investor relations – the standard continues to rise and markets are more volatile. Companies do need more in the area of corporate governance and investor engagement.”

The regional communications chief for one of the world’s largest technology firms says the everyday business of communications is made more challenging by the combination of an exponential increase in the number of stakeholders and the instantaneous nature of the modern news environment.

Businesses operating in industries that may have negative reputations may not yet recognise the need for far higher levels of engagement – and accordingly resources – than currently made available. Says one senior practitioner engaged in the food industry: “We have never, ever been questioned as much as we are today.”

Another interviewee, who has held senior roles in consulting, corporate and government environments, says the reticence of government and public sector bodies to engage with the private sector in this region presents a series of challenges. Developing a “shared value” or collaborative perspective on policy and regulation is difficult, she says, because “governments are still very distant with the private sector because we are outside of their comfort zone”.

One agency chief describes the pace of regulatory reform, and the risks that policy and legal changes pose to business, as “quite bewildering”. “There are major issues out there, particularly in Asia, which can affect corporate health and we have public affairs operations in almost every market to assist with this. The regulatory and policy pressures are affecting every brand and they’re not going to go away. The speed with which regulatory change can spread is quite bewildering,” he says.

In summary the head of one of the largest agencies in Asia Pacific predicts that public affairs will continue to be a high-growth area because the “policy and regulatory challenges to brands will only continue to grow”.

4.3. Variation and Localisation

As with the rise of digital, the increased complexity of the markets in which many firms now operate also makes the role of communications increasingly important, many of our respondents believe.

But in some companies there is a false assumption that markets of a similar size routinely require the same resource levels. Reversing this assumption is proving difficult. The reality is that where brand awareness differs significantly between markets, the communications and marketing needs may also be very different and require quite different resources. Those responsible for negotiating with their regional or global management say these issues are not always addressed when budgets are agreed. This problem appears to be particularly acute when budgets and strategies are written at the global level before being sent down the chain of command for local implementation.

Localisation continues to be a key watchword. “There is a realisation that, as we globalise, the way the audience and customer relate to brand is very different. This means we need to localise much more,” says one communications leader.

“To be a change agent you have to have a lot of initiative and drive from the local team. You cannot always take the global strategy or the global marketing message. Global needs to engage with local before messages are set, otherwise they can be difficult to customise,” says a senior western communications practitioner.

_____________________________________________________________________________________________

download