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SPECIAL FEATURE                                                    March  2002 Issue


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Tooting your company's horn

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Businesses are increasingly coming to understand the value of good public relations and crisis management skills, which has led some professionals to call for the industry to be regulated to avoid any sour notes

Pity the public relations industry. It has long battled its image as a cadre of hired guns who distort the truth, exaggerate and sometimes even lie.

To be fair, this is merely the perception of the day, sensationalised in part by a series of global corporate blunders that have put the PR industry under the spotlight as spin doctors trying to make their clients avoid looking irresponsible and uncaring. The truth is that the industry that invented damage control and a million ways to look better has matured into a highly specialised service.

"In meeting the needs of different sectors of the market, public relations has emerged into different fields such as corporate PR, consumer PR, hotel PR, entertainment PR, et cetera," said Linda Tsui, president, Hong Kong Public Relations' Professionals Association. "So now public relations is an essential supplement to businesses' marketing efforts."

pr3.jpg (19652 bytes)Diversification of the industry has also confused some businesses about exactly what PR entails. But this is beginning to change, says Rick Allen, group managing director of EBA Group, which comprises Euan Barty Associates Ltd and Firebrand Communications Ltd.

"Slowly but steadily, we are seeing a growth in the awareness of communications, so we are seeing people growing to understand more and starting to put dollars back into PR," he said.

Foreign firms are the greatest users of PR services in Hong Kong, with many of them having in-house PR departments or retaining an agency. Chinese firms are catching on, however, as more realise -- often through lessons learned from their competitors -- the importance of marketing themselves more aggressively.

Ms Tsui said there are pros and cons to setting up in-house PR departments instead of hiring outside consultants. In-house PR professional would obviously know the business better than a PR firm, but may lack the resources a PR firm would be able to offer. Employees may also not be as objective as an outside firm may.

"It is a growing trend that big companies use their own PR departments for most needs, and then contract out big projects to a PR firm," she said.

PR agencies can also steer companies away from possible areas of sensitivity, such as the case of Panasonic mobile phones being banned for sale in China for one year because they displayed the letters ROC for Taiwan, implying the island is an independent nation.

However, the number of Hong Kong businesses that hire PR firms is still a fraction of the average percentage of companies that do so in the United States, and most public relations work in Hong Kong revolves around product and service promotions, and advertising.

According to the Hong Kong Census and Statistics Department, there are 4,074 advertising and public relations and related agencies in Hong Kong employing 18,184 people. The annual revenue for the sector is -- both PR services and advertising -- reached US$2.1 billion in 2000.

Out of that number, as of March 2001,264 are purely public relations firms, 80 per cent of which employ less than 10 staff. Medium-sized companies, employing between 10 and 19 people contribute about 10 per cent, while companies with 20 or more staff make up the final 10 per cent.

The number of people employed by companies' in-house PR departments is 392, according to statistics compiled by the Vocational Training Council. Interestingly, most in-house PR-people are female, with 303 being women and only 89 men. In PR firms, by contrast, 216 of employees are men, while 486 are women.

Many Hong Kong PR professionals started out as journalists, such as the founders of EBA, who saw a big need in the market for a specialised PR firm, in EBA's case technology. Many are lured by better pay, but Ms Tsui says the fact that when reporters get married and raise families, the unsociable hours that the media demands makes switching to the PR industry a logical step to make.

Others are trained through PR or communications courses. Hong Kong Baptist University -- where Ms Tsui teaches -- the Hong Kong University, and Shue Yan College all offer PR programmes, but only the Hong Kong Baptist University runs undergraduate degree programmes.

Ms Tsui said demand for PR courses is rising as more managers seek to equip themselves with marketing and crisis management skills, which has created a need for more accredited courses.

"Over 3,000 applicants were received for Hong Kong Baptist University's PR & Advertising option in its undergraduate degree programme recently, which can only accommodate 30 students," she said.

Raising credibility

pr2.jpg (40243 bytes)With the opening up of the China market and skyrocketing demand for PR expertise, Hong Kong's public relations industry's long-term goal should be the setting up of some sort of accreditation system to upgrade the quality of services offered in Hong Kong, Ms Tsui said.

Singapore and the Mainland already have in place an accreditation system which requires professional in the industry to pass examinations for senior, middle or lower level PR professionals.

But it is vitally important that a system be set up to benchmark the competence of the industry's practitioners.

"Because PR practitioners often deal with sensitive information, it is vitally important that they know how to handle this data without stepping into an area that will make them liable to prosecution or be accused of insider trading," she said.

Ms Tsui said her association is working towards developing a code of practice for Hong Kong, but in the meantime, it encourages it members to follow the China International Public Relations Association's guidelines.

"Hong Kong's public relations industry is still very competent, competitive and well trained, but there is no official body to monitor the industry like the law or [even the advertising] sectors. We need to set up a regulatory body like in Singapore and China if the industry is to maintain and to raise its standards," she said.

Traditional PR

One of the mantras of the PR industry is that sustained brand-building is the key to success. While most companies tend to cut their communications budgets when times are tough, Mr Allen says "the worst thing they can do is to shut down their publicity machine. People will think this guy is in trouble. They can drop the headcount but companies should keep their PR head switched on."

He said he has seen cutbacks in advertising budgets in 2001 and is still seeing pressure as companies try to further reduce costs. One bright spot, however, is the number of companies setting up in Hong is helping the local PR industry stay relatively healthy, compared to their counterparts in the U.S. or Europe.

Studies by Ogilvy Public Relations show that while most people believe budgets and purse strings are tightened during an economic slowdown, total household spending tends to slowly increase during recession.

People cut back on luxury items and holidays, so they actually have more money to buy more food, household items or to spend on entertainment.

Good PR can keep brands fresh in people's minds even when they may not be buying your product or service, so at the end of the day, companies that have maintained their PR communication come out of recession with much higher market share.

"We also believe PR is at the end of the day a more effective mechanism than advertising. Messaging to different audiences is very complex so to reach audiences with clear and simple messages is becoming more and more effective," Mr Allen said.

Hundreds of agencies that help companies write and disseminate their message through press releases exist.

PRNewswire, which has been piping corporate news to print and broadcast media around the world for 50 years, opened its Hong Kong bureau in November 1998.

The company disseminates news on companies, mostly via FTP, email and fax, to print and broadcast media, as well as news agencies like Reuters, Bloomberg and Dow Jones.

"For SMEs, we are very focused on specific areas and we can come up with different processes that enable them to reach their desired targets," Iris Wong, marketing director for PRNewswire Asia, said.

Companies are basically responsible for drafting their own press releases, which PRNewswire can then edit and translate if necessary before sending them out to target media.

Ms Wong said PRNewswire doesn't charge a retainer fee so firms can send out releases on a per-release basis which starts at HK$720.

 

Picking the perfect PR partner


With all the fast-paced changes sweeping the world's economy off its feet, changing times mean changes in management style, and the solution may just be hiring someone to toot your company's horn to drum up new business. Here how to avoid any sour notes.

  • First, identify and prioritise your corporate goals. These will become the basis for determining your public relations goals and the strategies that will meet your needs.
  • To find a firm, talk to peers, trade or professional organisations or the media. Hong Kong Public Relations Professionals' Association (Tel. 2527-9337; www.prpa.com.hk), and the Public Relations Association of Hong Kong (Tel. 2619-7831) can also provide assistance.
  • Check out the firm's credentials and capabilities. Look at its background and experience with your industry, as well as the professional qualifications of the principals and staff. Ask for client references and call them.
  • Once you've narrowed down your choice to one or two, ask for a written proposal or an oral presentation outlining how the firm would provide services and solve a specific business problem. Make sure the firm is responsive to your concerns and expectations. There should also be "chemistry" with the people you'll work with.
  • Once you've made your decision, meet to discuss fee arrangements and initial length of contract. Payment options usually include: straight monthly flat fee (for actual hours used), project fee (based on the firm's estimate of length of assignment) and retainer (a flat monthly fee charged whether services are used or not). Make sure the fee agreement explains the policy on billing travel time, commissions and mark-ups on expenses.
  • Approach the relationship as a partnership. Be as frank with your PR firm as you would be with your lawyer. Keep them regularly updated and put them on mailing lists for materials that pertain to their assignment.
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