Hill & Knowlton is one of the PR firms that is banking its future on a new philosophy - that you can better serve clients by using specialists regardless of where they are geographically based. Of late, H&K, which is owned by WPP, has made its execs accessible to the media and trade experts to discuss these changes and the ongoing challenges posed by the millennium.
In a recent speech to the First Chicago NBD bank, Harlan Teller, executive managing director of U.S. Corporate Communications practice, speaks about some of the drivers in today's industry. This week, PR NEWS highlights excerpts from that speech:
I would characterize this as the "best of times and worst of times" for the corporate public relations industry. On the "best" side of the ledger, there is the increasing evidence that senior corporate management understands the proposition that a corporation is endowed with perceptual assets that have real value in the achievement of corporate objectives.
In a recent Yankelovich survey of 300 senior communicators for Hill and Knowlton entitled, "Corporate Reputation Watch," we found that an overwhelming majority believe that senior management wants a strong reputation management program and believes it adds value.
Over the past several years, we've seen the rise of the "corporate brand," which is based on the concept that a company's reputation as an institution has tangible brand equity that creates a halo effect for the products and services it sells. This is most true of what we call "unibrand" companies - the McDonald's, IBMs, Kodaks, Motorolas and AT&Ts of the world - whose corporate brands are synonymous with their primary product brands.
John Gilfeather, a managing partner at Yankelovich who makes a living conducting research for clients about corporate reputation, talks eloquently about the power of corporate brands. He notes that a product brand does one thing: it sells.
Waxing the Market
Nurturing the corporate brand is not just that province of unibrand companies - it has become increasingly true of such perennially quiet companies as Procter & Gamble, which for years kept its corporate name under a bushel - or in a very small bug at the bottom of its boxes of Tide - but now recognizes the need for strong corporate identity. In a landmark speech to the Harvard Business School in 1991, Retired Chairman and CEO Edwin Artzt said: "Consumers now want to know about the company, not just its products. Keeping the P&G name separate from the brands ignored what the world is like."
In ensuing years, we have seen considerable empirical evidence that backs up Mr. Artzt's assertion. A Harris survey last year actually measured the impact a corporate brand has on intent to purchase. It found, for example, that people are 50 percent more likely to buy Minute Maid orange juice if they know its parent is Coca Cola. And they're 70 percent more likely to buy a Chevy if they associate it with its parent, General Motors.
Studies by John Gilfeather and Yankelovich in 1994 and 1996 on behalf of Fortune magazine demonstrate that people are as much as three times more likely to buy a product from a company with a "winning" corporate reputation than a company not perceived as a winner.
The Fight for a Fortune Mention
Another factor that has pumped up the role of the corporate communicator is what I call the "Fortune most admired effect" - an obsession on the part of many CEOs about their ranking in the annual Fortune "most admired" survey. I've been in enough executive suites to know that no one wants to be at the bottom of the Fortune rankings. And, I can tell you that we have received entire "requests for proposals" that are based on nothing more than what we can do to improve a company's ranking.
I have argued in the past that the survey itself has been more of a boon to the public relations industry than a credible source of information about corporate equity. It is essentially a popularity contest among industry CEOs and board members who are asked to asses their own competitors. In fact, I've had one senior manager actually admit to me that he intentionally ranked his competitors below the norm in order to make his own company look better. Like Louie, Claude Rains' character in the legendary movie "Casablanca," I was simply "shocked, shocked" to hear that.
But, it's almost beside the point to argue about the validity of the Fortune findings and whether it provides any meaningful guidance to a company in search of enhancing its reputation - which I fervently believe it does not.