How Corporate Affairs Became Fashionable Again

In a year in which many of the lessons have been disturbing and disconcerting, it is worth highlighting a more positive development that benefits the public relations industry’s endless struggle for greater relevance. To wit — the traditional virtues of corporate PR are helping the industry weather a storm of enormous proportions, as reflected by much of the research we have released this year.

The latest evidence of this came from the Influence 100, where the world’s top clients confirmed that the corporate communications function is gaining in strength as a result of the extra – and extraordinary – pressures of the pandemic era. This makes instinctive sense, but was also borne out by our earlier studies of the sector. The number of clients reducing spend has declined, and corporate reputation and crisis counsel have remained the most resilient areas of demand throughout the year.

Whether that translates into a long-term reappraisal of the communications function’s significance, particularly in terms of setting policy, remains to be seen. But, if nothing else, this year has restored the primacy of corporate reputation communications. The corresponding decline in consumer spend, furthermore, provides plenty to ponder for PR firms that had prioritised brand marketing baubles and budgets.

It was back in the mists of 2016 when I received an anonymous email from someone claiming to work for Edelman. The exact wording eludes me now but the gist of it was clear — corporate PR specialists were being relegated to the sidelines amid the agency’s broader investment in consumer marketing capabilities.

As anonymous emails go, this one was more specific than most, even if it would be risky to place too much faith in communication of this nature. However, this was not a one-off refrain — indeed it reflected a concern that I heard on a regular basis. In the social media-fuelled rush to pursue CMO pursestrings, were public relations firms in danger of overlooking the less fashionable worlds of corporate reputation and B2B?

“Corporate communication became a backwater” says the former leader of a top ten global PR firm, who asked to remain anonymous. “The brilliant corporate communications campaigns of the 80s and 90s were replaced by earnest position papers on sustainability et al.”

The overall trend was not hard to miss. Corporate PR was being depicted as the preserve of reactionary gatekeepers who couldn’t tell Twitter from TikTok. Consumer specialists, meanwhile, were treading the Croisette at Cannes. The industry’s centre of gravity felt like it was shifting — thanks to a narrative that became increasingly well-rehearsed. Traditional communications budgets were under pressure, stifling agency growth, particularly at the larger end of the spectrum. Meanwhile, the boundaries between earned, paid and owned media had effectively disappeared, causing the premium on earned-first ideas to spiral inexorably upwards.

PR agencies, accordingly, had an unprecedented opportunity to lead brand-building campaigns, rather than just loiter on the margins. And that, in a seductive portrait of the industry’s future, would help PR firms unlock marketing budgets that could be 10 to 20 times as big as a typical communications retainer.

Of course, things didn’t quite turn out this way. But it was not for lack of trying. Edelman’s immersion may have been the most complete but they were hardly the only major firm to focus their investment on consumer marketing and advertising expertise, whether in response to adland’s domination of the Cannes Lions PR category, or more fundamental integration trends — of marketing and communications, and of corporate and brand.

Fast forward to 2020 and it is painfully clear that the agencies that are surviving best amid this year’s chaos are those that bring industry-leading expertise in such areas as corporate reputation, crisis counsel, public affairs and employee engagement. Indeed a large segment of the PR industry might wonder what all the fuss is about — corporate PR never disappeared, and if 2020 has restored its primacy then that is only because of the short-termism that contributes to this kind of zero-sum thinking, particularly among publicly-held players.

Whether it is zero-sum bets or zero-based budgeting, the pandemic has perhaps only accelerated a correction that was already underway. From around 2018 onwards, I began hearing senior PR figures calling for an end to the infatuation with brand marketing as a proxy for corporate engagement. P&G, the biggest brand marketer of them all, was cutting budgets with gusto — calling into question whether the purported ‘CMO dividend’ would ever materialise,

With consumer clients becoming increasingly focused on the per dollar value of their investment, budgets tightened, highlighting consumer PR’s profitability issues versus higher-margin areas such as healthcare and B2B. More than one PR agency leader told me that the consumer boom had ended at least 12 months prior to Covid’s emergence. 

Meanwhile, whether it was geopolitical intrigue, gender and inclusion or supply chain woes, corporate concerns were hardly becoming less important. If anything, the global issues environment has only intensified in the past couple of years, particularly as companies are increasingly called on to take sides and ensure their much-vaunted values count for more than just words on a webpage.

So, as CEOs navigate a turbulent landscape that requires them to inspire employees, reassure customers, placate investors, and prove that ‘stakeholder capitalism’ is more than just well-meaning rhetoric, it stands to reason that corporate counsel is in high demand. And that is before we consider the manner in which digital transformation has dramatically intensified in 2020, bursting beyond the preserve of marketing tools towards a reckoning with the very nature of business itself.

All of which helps explain why corporate public relations has not only proved resilient in 2020, but has a rare opportunity to restate its enduring relevance at a time of incredible flux. This publication has been critical of the public relations industry’s slower than expected growth during the good times, so credit must be given where it’s due. Consumer marketing will, no doubt, be back — but 2020 has thrown up yet another surprising trend: corporate PR is fashionable again.