Author: admHonWpAdm

Is media relations a dying art? No, but it’s no longer the only game in town for PR practitioners, according to a world-first report into the state of the communications industry.

The global communications report reflects on the changing media and communications landscape and concludes that for communicators across the globe, the focus is shifting away from traditional media relations to content creation, social media strategy, and creative execution.

The report, released last week, surveyed more than 1,000 senior in-house and agency public relations executives around the world. It was conducted by the University of Southern California’s Center for Public Relations and was designed to provide unprecedented insight into the evolution of the global communications industry, by analysing emerging trends from both a client and agency perspective.

The report found significant agreement among both agency and client-side respondents that in coming years, there will be increased demand for:

• content creation (81%);
• social media (75%);
• brand reputation (70%); and
• measurement and evaluation (60%)

This broadening of the communications suite is something Honner has been talking about with clients for a number of years.

Earned, Owned and Paid: the new holy trinity of PR 

While media remains an important channel to reach stakeholders, organisations need to look at each communications channel and creatively engage with stakeholders across platforms – whether that be through social channels, on their website or through direct email or face-to-face communications.

This shift has become all the more important as local, mainstream news outlets continue to cut back on the number of journalists, leaving those remaining in newsrooms busier than ever before, and making it harder to get your voice heard in a busy news environment.

This shift to a broader communications approach is also reflected in the budgets of corporates globally where, on average, a third of the marketing and communications budget (31.9%) is being spent on earned media (media relations), approximately 32% is being spent on owned media (websites and blogs), 17% is being spent on paid media (advertising and sponsored posts) and 16.4% on shared media (social).

By 2020, the proportion of marketing and communications budget spent on media relations is predicted to fall to just over a quarter (26.6%)

Fred Cook, Director of the USC Center for Public relations, reinforced this finding in the report executive summary saying: “We are seeing a significant across-the-board directional shift away from traditional media relations to owned, social and paid media”.

This change to the communications landscape is happening rapidly, to the extent that only 27% of agency leaders globally believe by 2020, the term ‘public relations’ will clearly and adequately describe the work they do.

Measurement still evolving

Encouragingly, measurement and evaluation were seen as both a growth and improvement opportunity.

Agency and client-side respondents rated total reach as the most common form of measurement (68%), followed by impressions (65%) and content analysis (64%).

The report notes that, surprisingly, 30% still use advertising value equivalency – a “discredited metric within the industry”.

Social media monitoring remains largely unsophisticated. The most common metric is the simple count of followers (78%), followed by reach (77%) and interactions (76%).

For anyone interested in the future of communications, you can read the Executive Summary here or the full report here.

After 20 years of attending the Conference of Major Superfunds you get a good feel for when an industry is at a turning point.

This year’s conference held in Adelaide struck me for its insistent focus on achieving better diversity in our sector.

Not just gender diversity, which gets the most airtime – but true diversity of opinion and approach from people of different backgrounds as a way to achieve better outcomes for members.

Last week I had the pleasure of working with Mellody Hobson, President of asset manager Ariel Investments and also Chairman of the Board of DreamWorks Animation SKG, and director of The Estée Lauder Companies Inc. and Starbucks Corporation.

You could hear the sharp intake of breath amongst CMSF delegates when Hobson told the audience that she was one of only two board Chairs of US publicly traded companies who are black women. Yes you read that right. In her club of two is also Ursula Burns of Xerox.

Hobson quotes a book by Scott Page called the difference: how the power of diversity creates better groups, firms, schools and societies, (princeton, 2007) – where Page shows in considerable intellectual rigor when diversity does lead to better outcomes and how and why, as well as when it doesn’t. According to the publisher, The Difference reveals that progress and innovation may depend less on lone thinkers with enormous IQs than on diverse people working together and capitalising on their individuality.

Page also builds a mathematical calculation for diversity that finds if you are trying to solve a truly difficult problem (which is arguably what asset managers do all day) the best results come from diverse groups of people with dissimilar intellects.

And Hobson is a clear fan: “We need to look at the evidence and I say, just do the maths, because maths has no opinion,” she says. “Diversity ups the game, it makes us better.”

Closer to home, investing giants like the Future Fund are also looking at how a lack of diversity within an investment team might add to overall risk. According to Greg Bright’s Investor Strategy News (ISN), the fund has been looking to reduce its longer-term Anglo, western and, probably, male biases in the management of its $120 billion portfolio.

Raphael Arndt, the Future Fund’s chief investment officer, says the fund’s management wants to be agnostic about whether it is investing in emerging or developed markets going forward, ISN reported last month.

“So, we are upskilling ourselves so that we have the people to share all the experiences. We want people with diverse backgrounds,” he says. “We thought we needed to challenge ourselves to learn more… By and large, we are Anglo and western biased, so we have different challenges if we want to get to wherever we want to be [for example] in emerging markets in 10 or 20 years’ time.”

Interested readers can see Mellody Hobson’s TED Talk: Color blind or color brave here. No doubt there is plenty more debate to come.

Re-building trust and ensuring clear and plain communication with consumers – these were some of the messages to come out of the Financial Services Council’s (FSC) life insurance conference held in Sydney this week.

For an industry undergoing unprecedented change and scrutiny and a potential Senate Inquiry looming, the conference pondered – how can we do things better?

FSC CEO Sally Loane announced that the life insurance Code of Practice would be strengthened to include a steering group made up of consumer representatives, the Financial Rights Legal Centre and the Consumer Action Law Centre, as well as senior life insurance executives.

ASIC’s Peter Kell sent a clear message to the industry by saying the Code would need to go above and beyond what the law already does and that it would need ‘substance and bite.’

Many of the conference speakers acknowledged the challenges facing the industry and that wholesale changes were needed to regain consumer trust and confidence. Changes to legacy systems, definitions, data collection and sharing, language and the overall way the industry communicates. No easy task, but a necessary one, especially when dealing with such an emotive topic.

It was encouraging to see insurers tackling this from within their own organisations, especially in addressing the rise in mental health issues. With 1 in 3 financial services workers affected by some form of anxiety and stress, MetLife CEO Deanne Stewart said it all needed to start in the work environment – we need to help create positive workplaces that can still be high performing but also caring and compassionate.

The life insurance industry is at a tipping point. Change is needed to protect the industry’s reputation and all the good work that is done for the benefit of consumers.

As ANZ Wealth MD Alexis George put it ‘”it can’t just be about talk – there has to be action.”

It’s never been a more exciting time to be a chief economist. So quipped one of Australia’s leading economists, Saul Eslake, at this week’s Financial Standard Chief Economists Forum – where Honner hosted a table.

Certainly, there are some pretty fascinating market trends unfolding both domestically and globally, that are keeping investors and chief economists alike, watching, waiting and anticipating just what will happen next.

From negative interest rates in Europe and Japan, to rising rates in the USA. From the global crash in oil prices to the transformation of the local economy away from mining – not to mention the wild start to the year we’ve seen for the ASX. As pointed out at the Forum, the global economy is proving an intriguing beast. (Bob Bauer, Chief Global Economist at Principal Global Investors referred to it as a global ‘rebalancing and redistribution of growth’).

With this dynamism comes the concern for managing investment portfolios, and securing returns without unnecessary risk, in a world characterised by slow growth and volatility.

As pointed out  by Kevin Anderson, Head of Investments, Asia Pacific Region at State Street Global Advisers, average balanced super fund returns have fallen from 16.3% in 2013 to just 5.4% in 2015. And the prognosis is 2016 is likely to deliver even weaker results.

The challenge for all investors in 2016, whether institutional or retail, will be just how to secure decent risk adjusted returns and identify opportunities for above-market growth.

At Honner, we expect this to be a major theme across the media this year and we are looking forward to hearing – and sharing – our clients’ thoughts and insights on achieving positive investment outcomes in a low-growth, volatile market.

Honner recently attended the Financial Services Council (FSC) political series breakfast to hear Assistant Treasurer and Minister for Small Business, the Hon. Kelly O’Dwyer MP, outline her vision for Australia’s financial services sector.

Having delivered the government’s response to the Financial Systems Inquiry (FSI) and starting the dialogue around the Life Insurance Framework (LIF), it’s fair to say that Ms O’Dwyer has had a busy eight weeks since officially starting in office.

FSC CEO Sally Loane never tires of reminding the financial services community, “Kelly O’Dwyer does the job of two men” since being promoted under the Turnbull government into the positions of Assistant Treasurer and Minister for Small Business.  To top it all off, Ms O’Dwyer is also mother to six month old baby Olivia. As a full time working mother to a 10 month old myself, I am tempted to use the phrase “I don’t know how she does it!”

Much of Ms O ‘Dwyer’s address, which, according to the FSC was the new Minister’s first major speech on financial services, focused on the FSI.  Ms O’Dwyer stressed the government’s commitment to “providing a financial services framework that encourages economic growth, innovation and investment, and one that is fair to both consumers and businesses.”

Overall, the government accepted the overwhelming majority of recommendations made in the FSI final report and, on the whole, Australia’s financial services sector is performing well. But, as is often the case, there is room for improvement.

Super trends…

Future success rests heavily on our $2 trillion super system, which is set to grow to $9 trillion in assets by 2040. Ms O’Dwyer said the government will first enshrine the objective of the super system in legislation to help “align policy settings, industry initiative and community expectations. “

At the same time the Productivity Commission will review the efficiency and competitiveness of the system as well as exploring alternative default option models. In the retirement income space, the government will enable super fund trustees to pre-select comprehensive income products for retirement (CIPRs) for their members.

Ms O’Dwyer also mentioned that all super funds excluding SMSFs will be required to have a minimum of one-third independent directors on their trustee board, including an independent chair – with the aim of providing “increased scrutiny and transparency.”

Hello, crowdfunding…

In other areas, Australia’s flourishing small business community also received a nod with government plans to introduce new legislation to allow start-ups and small companies, with a turnover of less than $5 million, to raise annually up to $5 million in equity through crowdfunding. Ms O’Dwyer said the changes would “allow mum and dad investors to make investments in start-ups and small business.” It will also bring Australia up to speed with global peers in Canada, the UK, US and New Zealand who already have similar models.

Ms O’Dwyer concluded that the government was committed to making Australia’s financial system s the best in the world and that the government’s financial system program “will enable the system to meet its fundamental role in funding a more competitive and productive economy that is able to embrace uncertainty and encourage innovative activity.”

“What will be the Uber moment in financial services?” asked Sally Loane, CEO of the Financial Services Council, opening the FSC/Deloitte luncheon on Customer engagement in 2015: how the finance industry can learn from the new wave of business.

Uber moments appear imminent across the industry, with the emergence of robo advice, peer-to-peer lending and equity crowdfunding, to name but a few fintech ‘disruptors.’

Uber General Manager and keynote speaker, Simon Rossi, emphasised that essentially Uber is in the business of transforming a functional need into a memorable experience. The need to get from A to B can be elevated by Uber into an experience that people will “love and share,” he said. For example, on Melbourne Cup day 2014 Uber chaperoned punters to Flemington by helicopter. And in the US, it teamed up with the Transformers franchise to transport film-goers to cinemas in an Optimus Prime-styled truck. There is no reason a sensational experience cannot start at home, rather than the destination, Rossi proposed.

For most of us, the “Uber moment” is more likely to be an experience of exceptional ease when getting a ride home from the most obscure of city nooks or at peculiar times of day. It’s the emotional value of alleviating fear and uncertainty, as well as the delight of efficiency and convenience. And of course it’s also the anticipation of being delivered free Messina gelato- one of the tactics Rossi described as building a “halo effect” around the brand.

But beyond these grandiose and diabetes-inducing gimmicks which showcase Uber’s philosophy writ large, Rossi emphasised the unanticipated socio-economic outcomes generated by ride-sharing.

Uber certainly wasn’t started with the idea it could become a catalyst for economic transformation- it was launched by a couple of mates who had trouble finding taxis and thought they could extend a service to friends.

Now with over 1.1 million drivers internationally, Uber has become a force to redress unemployment and underemployment by creating a new way to work. It provides the information and tools for people in 58 countries to generate an autonomous income or top up their wages.

Uber’s mapping of the areas of greatest demand also demonstrates that its services are successfully filling gaps in current transport infrastructure, complementing rather than taking away from public facilities.

The positive impacts of ridesharing on congestion, safety and connectivity in cities is often missed in the media, which is more focused on the war with the taxi industry or regulators, lamented Rossi.

While Uber is a self-professed ‘technology company,’ it collides with the share economy by connecting people directly. And out of this shared or collaborative consumption socio-economic benefits have organically emerged.

Uber has taken ownership of its accidental social impact wholeheartedly, launching ever more elaborate #impact initiatives and partnerships globally- around health, safety, disability, veteran and family affairs and animal welfare.

For several years the UberKITTENS campaign has delivered hundreds of abandoned kittens to homes and workplaces across 50 cities worldwide, offering customers 30 minutes of ‘playtime’ with their furry parcel. This year the initiative led to the adoption of over 300 kittens and generous donations to support animal shelters.

This successful initiative encapsulates the elements that seem to make up the ideal “Uber moment” from a customer experience perspective- an easy or effortless transaction process, a touch of hedonism in product or service delivered, and a feeling of contributing to some wider good.

There are many financial services technology platforms emerging that promise to disrupt- but the lesson to be learned from Uber is that disruption is not about technology; it’s about ease and an unexpectedly enhanced experience, it’s about the emotional and social dimensions that create memorable moments.