Prema Sagar: Don’t Compare PR to Advertising

 

Prema Sagar, Principal and Founder of Genesis Burson-Marstellar

Q. In your opinion, what is the effect of the global financial recession on the Indian PR industry?

We can see our growth rate, which is dropping, and right now it is at 5%, so it does impact. It takes 120 days to close a new business opportunity. This means if you were used to closing a new opportunity at 30 days, which went to 60, 90 and now 120, it means that you’ve lost that much money over that period. That has slowed down the kind of excitement that we had in converting a business very quickly, and bringing in the revenue much quicker.
So, those delays are very much there. Companies globally are looking at every contract that they are signing. It is a challenge from that point of view, but having said that, there are still lots of new business opportunities. So what we have to look at is how we retain our current clients, how do we grow from our current clients and how do we grow our services? How much more value can we provide to them, and of course the new business going to this format is going to continue till this economy turns around.
India is not as linked to the world, as much as the policy issues we are facing in the country. The political activism that is going on, the corruption activism that is going on, all that is affecting the sentiment. I think it trickles down and we also suffer from that.

Q. In our conversations with various PR and Communications thought leaders across the country, something that consistently comes up as one of the biggest challenges for the industry is the high attrition rates at agencies. How much of a problem do you see this as and is there a solution that you think the industry can find for it?

On one hand, the growth has been phenomenal of the PR industry. If you look at the number of people in PR now, you fight for the same talent. The fact is that we don’t have enough of a talent pool which is aligned to the new way of doing public relations. There is not enough learning going on. At Geneis Burson-Marstellar, we have our own school of learning. We have management training programs, we have middle management training programs, we have expertise training programs – so all the time there is learning and development going on. The fact is that our employees do look at us as a place where they learn a lot.

And more importantly, the fact is that our retainers don’t grow as fast as salaries are growing. If we are renewing a client’s contract, even if they have been with us for many years, they’ll make a 10-12% increase, unless there is a huge difference in the scope of work.  If you look at what they want, the client wants more expertise which comes from the top level, the senior people. The stress in the system is pretty high at the moment. Lots of young people are looking at growth and more money, but we need to look at who is delivering what value. We are quite clear that we will differentiate those who are providing value within the system from those who aren’t. Earlier, we were this goody-goody company which hoped that things would turn around if somebody is not performing very well. But we do have to make decisions these days because we want the best.

Q. Another issue which comes up, and this is based on something Mr. Sunil Gautam mentioned in our interview with him, is the average advertising retainer is 10 times that of the average PR retainer. Some have suggested that this can be explained by the importance that companies assign to these two functions. How do you think the PR industry can bridge this gap?

It is completely different. If you’re doing a CRM program, it’s different; if you’re doing advertising it’s different; if you’re doing promotion and events it’s different, if you’re doing public relations, it’s different and if you’re doing public affairs it is different. I don’t think one should keep on harping on this subject of comparing PR to advertising. We don’t have to compare apples and oranges. What we need to see is what value we are providing to our clients. If we are providing value to our clients, they’ll give us larger sums of money because it is definitely cheaper than advertising. It is more effective actually – great bang for the buck. I don’t like the comparison between public relations and advertising. It doesn’t excite me at all. Advertising is paid for whereas PR is about influencing and creating preference and choice for a product or service. It’s a completely different way of communicating.

Q. How do you think the PR industry needs to either change or adapt to stay up to date with what is happening in social media? How important do you think it is in terms of something you offer to clients?

It is extremely important in particular areas, consumer technology for example. You would not buy a product without checking its review on Google, and looking at what people are saying about it. If you look at cars, look at sound, look at any of the headphones, whatever, nobody is going to say I bought it because I saw it in the newspaper.  An ad doesn’t tell you anything anymore. That is the area where it makes a big impact.

In the FMCG area, it is usually very tactical. It is about an event that is happening, and how we build it up, and go through the event and then analyze what you got out of that digital input. But if you look at online management, on corporate reputation, issues and crisis, it is absolutely essential.  It is so clear in our mind about how you can manage your reputation in a crisis. Lot of people don’t get it, they think this crisis is not going to happen to me, so when it hits, then they’re all over the place. And you cannot put on a micro site overnight; you cannot put out information overnight. There is only one company we have spoken to who has actually done that. They’ve created the micro site, put in a lot of research because when you’re in a particular area you know where your vulnerabilities are, where people can hit you or what can possibly go wrong. So at least you have done research, put papers out, so when something happens, you switch on and you have all the data with you. That data has to available publicly within minutes, forget about putting up a micro site.

However, I think it doesn’t work everywhere. For example, in the energy space you may be online regarding environmental issues or corporate issues, but from a product basis. You may like to want to look at it differently from a reputation point. I am not a digital expert but I know it is a channel of communication which is critical and essential. If you look at Harold Burson, who at 92 reads The New York Times online and doesn’t say I prefer to read from a paper in my hand. If you look at a 92-year-old who is looking at it, we here in India should ramp up our digital understanding.

But I feel there is adisconnect between the companies and us. The expectation is never quite clear and the fulfillment, therefore, is not what you wanted. So there is frustration at every level. It’s not that the U.S. didn’t go through it. It’s not that everybody else had a good time and we didn’t. I think we are all struggling, a lot of us are. Pure marketing events are being covered very well, but when you look at the larger picture of how you make an impact and how you measure it, that is still a very weak area. Honestly speaking, I find there is a lot of talk and less action on that.

Q. What sets Genesis Burson-Marstellar apart from the other PR Firms in the country?
httpv://www.youtube.com/watch?v=Wt4Xa-3agZk

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