SPECIAL FEATURE
March 2002 Issue

Tooting your company's horn
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."
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
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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