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It’s a small world after all

With economic growth in the US and Western Europe slowing today, multinationals are increasingly looking at Asia as an island of growth in these tough economic times

Globalisation has been the juggernaut propelling interconnectedness and global media the glue that binds people across continents.

Over the last few weeks, the world has been riveted by the unfolding financial crisis on Wall Street. Lehman Brothers, AIG, and Washington Mutual; financial brands which till only recently had limited resonance outside of key global financial centres like Tokyo, Hong Kong, and London, gained overnight notoriety in places like Hyderabad, Hanoi, and Jakarta.

This rapid spread of news is driven by the proliferation of mass media – television, radio, online and print media. For today’s public relations practitioner’s knowledge of the rapidly changing global media landscape has become an imperative.  Underscoring this reality is the fact that public relations itself has become an increasingly important tool within the marketing function over the last decade.

PR in the spotlight

According to a recent article in AdWeek, the PR sector, though still much smaller than advertising, grew more than three times faster than advertising between 1990 and the peak of the internet boom a decade later.

Even though both disciplines saw massive employee cuts after the market slowdown in 2001, public relations today, as measured by employees, is 44% larger than it was in 1990, while advertising is up by only 14%.

In the last decade the public relations industry has witnessed tremendous growth, first due to the internet boom, which was followed by a brief slowdown in the early years of this century followed by resurgence in growth since 2003.

Globally, the US still accounts for the largest percentage of the public relations industry spend of approximately $US 7 - 7.5 billion. The fastest growing markets for the industry today are in countries like India and China.

In the next decade Asia, especially India and China will have sizeable public relations industries.India’s PR industry has been growing at over 25% over the last several years and today accounts for approximately $175 to $200 million of revenues.

Why the shift?

Forming, communicating and managing an organisation’s messages in an era of 24/7 news becomes increasingly important to how the company is perceived by various audiences.

The media’s reach across vast swathes of the globe has driven agencies to keep up with their own rapid globalization in terms of talent and operations. News is no longer local.

A crisis like this week’s financial meltdown on Wall Street has global repercussions and requires a global media response from the affected companies.

Public relations practitioners are required to be knowledgeable about media trends not only in their home markets but to have some understanding of trends globally.

An important trend driving the growth of public relations as a function has been the increase in audience fragmentation resulting from a shift away from mass market broadcast news. Blogs, social media, and the iPhone have changed the way people consume media.

This increased fragmentation in the media industry requires a shift in marketing strategies from the traditional buying of advertising which reached a broad audience via print or television.

Instead, it requires a strong understanding of the rapidly changing media landscape and an ability to communicate messages across a wide variety of media channels resonating with a wide variety of audiences.

The ability of companies to tailor and communicate messages to a variety of audiences – customers, investors, employees, NGO’s, government – has become increasingly important thereby raising the importance of public relations practitioners who can help navigate this new landscape.

The Indian Example

With economic growth in the US and Western Europe slowing today, multinationals are increasingly looking at Asia as an island of growth in these tough economic times. Both India and China are expected to grow in the coming year and multinationals will continue to raise awareness of their brands in these markets.

Companies and agencies communicating in both these markets will have to learn the nuances of operating in these environments. Take the example of India. It is a country with unparalleled diversity. Her one billion people represent a kaleidoscope of ethnic groups, languages, religions and cultural practices.

Seventeen major languages and over 800 dialects enhance her diversity yet this multilingual nature also increases the complexity of communications.

The media is not dominated by any one company but is controlled by regionally strong media companies across the country. The largest circulating English daily – The Times of India – has half the circulation of the largest regional vernacular publication.

The complexity of conducting public relations in India is evident from the fact that any company will have to not only understand the structure of India’s media industry, the reach of various media outlets across the spectrum of audiences but also take into account the local and regional differences in language, religion and culture.

Communications strategies should also recognise that urban centers like Delhi and Mumbai and targeting only the English language media will only reach less than five per cent of India’s population. An effective pan-Indian communications strategy would require a strong understanding of all the above mentioned nuances.

Once companies understand these local issues, they will realise the vast opportunities for public relations in a country that has one of the fastest growing media markets coupled with one of the world’s largest economies in the coming decade.

Harjiv Singh is co-founder & CEO, International for Gutenberg Communication