For More Information

1. GAP VII: Seventh Communication and Public Relations Generally Accepted Practices Study (Q3,4 2011 data)

2. For More Information • Email: sprc@usc.edu • Website: www.annenberg.usc.edu/scprc

3. Background • J. Swerling • 40+ years, majority in agency senior management • USC Annenberg (14 years): Prof. and Director of PR Studies (BA, MA, SCPRC) • Management consultant : agency search, organization (Toshiba, Cisco, GM, HD, State Farm, CSC, Intuit, Symantec, Remy Cointreau, Toyota ++ ) • SCPRC • Launched 2002: Advance the study, practice and value of the public relations/communications function by means of practical, applied research • Bridge academic/practitioner gap • Generally Accepted Practices (GAP) Study • Provide the profession with actionable guidance on mission critical decisions • Track trends, issues, emerging best practices • GAP VII: 620 decision-maker participants; Now “the largest, most comprehensive study of the PR/Communication field.” • GAP VIII: Fall, 2013

4. GAP VII: Professional Partnerships

5. IABC OC: Approach • Synthesis of: • GAPs I – VII (The whole is far greater than the sum of its parts) • Ongoing anecdotal data • Input from multiple sources (Page, IPR, media, etc.) • Personal experience and observation

6. IABC OC: Key Takeaways • PR/COM no longer a seat of the pants business • “Seat at the table” no longer the issue; it’s what you do in the seat • Profound shift from “Old School” to “New School” • Pace of change is accelerating • Trends and signs are generally very positive for the discipline • Practice is expanding in terms of responsibilities…if not budgets • Two-way direct engagement with audiences increasingly the norm • Traditional intermediaries becoming less important • PR/COM increasingly at the center of the organization • Organizational savvy, accountability, metrics • Are we ready for the professional and ethical challenges???

7. Budgets

8. Budgets: Public Companies, 2009 vs. 2011 • GAPs I – VII: Budgets generally trending up…but not like the boom years

9. Budgets, Anticipated: Corporate Respondents, 2012 vs. 2011 • More than 50% expected flat budgets in 2012; prediction confirmed by anecdotal data • 2013 hypothesis: greater % expecting increases

10. Budget, All Respondents: Allocations • GAPs I – VII: % for agency fees has decreased

11. Budget: Insights • Those with budget increases were no more likely to score higher on success, reputation  • Those with budget decreases were less likely to score higher on success, reputation  • Success not necessarily a function of budget • In lean times when efficiency and productivity are the watchwords, our ability to achieve much with relatively little can be a huge advantage

12. Responsibilities and Functions

13. Responsibilities, Corporate: Core* • Is Marketing, • Product PR transitioning to social? • * Defined as more than 50% reporting budgetary re-sponsibilityin 2011.

14. Responsibilities, Corporate: On the Rise *In 2011, monitoring and participation asked as two questions

15. Budgetary Responsibilities, Corporate: On the Decline Is traditional product promotion giving way to social?

16. Responsibilities, Functions: Insights • Added responsibilities (i.e. social) without added budget • Relationship between the number of core responsibilities and total PR budget size? YES • Relationship between number of digital activities and budget increase? NO • Relationship between overall number or kind of responsibilities and budget increase? NO • Doing digital or “non core” activities hasn’t led to budget increases • The key to budgetary effectiveness: • Ongoing evaluation of all activities • Objective (ruthless?) prioritization relative to contribution, cost • No sacred cows • Retraining /reallocation of staff

17. Management and Use of Social Media

18. Digital/Social Tools: Budgetary Control

19. Digital/Social Tools: Strategic Control

20. Digital/Social Tools, Usage: Core* *Defined as above 4.0 average use 1=Didn’t use; 7=Used significantly • Observation: all continue to trend up • Increasing demand for engaging multimedia content (we now teach all forms of production • Increasing experimentation

21. Digital/Social Tools, Usage: Has Beens 1=Didn’t use; 7=Used significantly

22. Digital/Social Tools: Insights • 70% control by COM or Marketing = Higher score on Success factor • Multimedia - especially video – increasingly crucial • Don’t fall in love with any single platform; rapid change the norm • Anecdotal: College students making less use of Facebook • New social market environment is permanent • The norm for younger generations: two way, social, audience of one, peer influencers • Co-ownership of brands • Not just B to C; B to B and B to G moving that way, too • “Social organizations” *Scored above 4 on 7-point scale

23. Measurement and Evaluation

24. Measurement and Evaluation: Budget Allocations Budget allocation for research, measurement and evaluation has increased sharply

25. Measurement and Evaluation: Top Ten Tools 1=Don’t use; 7=Use significantly • Core tools: Greater than 4.1 • None higher than 5.1 (consistent with past GAPs) • Ad equivalency nowhere to be seen

26. Measurement and Evaluation: On the Rise 1=Didn’t use; 7=Used significantly • Growth concentrated in more sophisticated, objective, quantitative techniques • GAP VIII Hypothesis: Digital/Social: 5.5; Pre/Post: 4.0

27. Measurement and Evaluation: Categories (Factor Analysis) *Factor analyses conducted using the full sample.

28. Measurement and Evaluation: Insights • Outcomes measures (Stakeholder, Strategic and Bottom Line) linked to success factors? YES • PR Outputs measures linked to success factors? NO

29. Agency Relationships

30. Agency Relationships: Fee Allocations as % of Total Budget * Question changed in 2011

31. Agency Relationships, Public Companies: Types, 2002 - 2011 • AOR continues downward trend

32. Agency Relationships, Corporate: Number of Agencies Used, 2002 - 2011 Number continues to increase.

33. Agency Relationships: Reasons 1=Not important; 7=Very important; Among those reporting use of agencies. • Arms and legs #1 since GAP I • 18% more dependent on agencies for strategic insight in the last two years

34. Agency Relationships: Categories (Factor Analysis) *Factor analyses conducted using the full sample.

35. Agency Relationships: Insights • Significant relationship between Strategic agency use and (1) recommendations taken seriously, and (2) positive CEO perceptions • Descriptively*, high strategic use, low tactical use, associated with strongest scores on multiple success factors • Descriptively*, low strategic use, high tactical use, associated with weakest scores on multiple success factors • Challenge/Opportunity for agencies: Grow business by providing Strategic added value on even labor-centric assignments • Challenge/Opportunity for clients: Optimize relationships by seeking/being open to Strategic added value on even labor-centric assignments * Not statistically valid, but high confidence level.

36. Organization/Reporting

37. Organization/Reporting: Reporting Lines • Consistent with past GAPs

38. Satisfaction with Reporting Lines • Is your reporting line effective? • 60% strongly agree, 16% strongly disagree • No difference in perceived effectiveness between single (5.20 on 7 point scale) and multiple reports (5.24). Why? • 88% of multiple reports have a line to the C-Suite; only 44% of single reports • Those with C-Suite access are more satisfied (5.87) than those without (4.33)

39. Reporting Lines and the Perceived Value of COM/PR Significant mean differences, p<.000

40. Organization/Reporting: Insights • Reporting line may sometimes be situational (i.e. marketing-driven companies), but broader conclusions are inescapable • To achieve its full potential PR/COM must be included in the Dominant Coalition, i.e. report to the C-Suite • Reasons for non-inclusion: • Organizational limitations • Professional limitations • Both

41. Integration

42. Intra-Functional (Among COM Functions) Integration and Success Higher levels of integration/ coordination among COM functions are associated with multiple success factors. *Coordinated functions=Top 3 box; CEO values contributions=average agreement with “My CEO/top exec. believes PR contributes to… stock valuation, financial success, sales; PR recommendations=average agreement with “PR recs taken seriously…” and “PR generally invited to senior-level meetings…”

43. Inter-Functional (COM and Other Functions) Integration and Success Higher levels of integration/ coordination between PR/COM and non-COM functions are associated with multiple success factors. *Coordinated departments=Top 3 box; CEO values contributions=average agreement with “My CEO/top exec. believes PR contributes to… stock valuation, financial success, sales; PR recommendations=average agreement with “PR recs taken seriously…” and “PR generally invited to senior-level meetings…”

44. Organizational Integration and Reporting Line • Intra-departmental and Inter-departmental integration strongly related to: • Success factors • Reporting line • Intra-functional integration: 5.5 with C-suite access, 5.1 without. • Inter-functional integration: 5.5 with C-suite access, 4.9 without.

45. GAP VII, Section 9 Excellence and Best Practices

46. Excellence and Best Practices - Insights • Causality yet to be proven, but patterns are very compelling and long-lived (over multiple GAPs) • Integration: Champion intra-functional and inter-functional integration and coordination.* • Measurement/Evaluation: Invest at least the average % of total budget in evaluation; Invest in metrics other than, and/or in addition to, media outputs.* • Culture/Character: Beginning within the PR/Communication function, champion the adoption of a culture/character that is: proactive; long-term/strategic; flexible; ethical, and people-first.* • Agency relationships: Optimize strategic value, not just tactical.* • Optimal Reporting Line: Usually a direct line to the C-Suite. Be part of the Dominant Coalition.* *Strongly associated with success variables.

47. Excellence and Best Practices, Key Insight: A Period of Profound Transition from Old School to New School OLD SCHOOL • Measures media outputs • Believes focus is on media relations • Does not believe social media are pervasive, worries about control • Orientation is short term/reactive NEW SCHOOL • Measures outcomes • Believes social media belongs in COM/PR • Embraces pervasiveness of social media, still with modicum of control • Orientation is long-term strategic • Recommendations are taken more seriously

48. FIN