India is the next big battlefield for global public relations firms. And it is changing the game for the local incumbents
On February 5, 2010, a bunch of young Twitter enthusiasts gathered at a Café Coffee Day outlet in Chennai. They spent several hours chatting, tweeting and running up a snack bill of over Rs. 1,000. An impatient store manager didn’t think this billing was good enough for the time they spent at the café and ordered them to pay up a ‘service charge’. The group refused and left. But they tweeted their experience with the hashtag #CCDSucks. Within hours, it spread like wildfire online and Café Coffee Day became the subject of ridicule and fiery debate. The company could neither control nor wish away the bad publicity created by the event.
CCD is not alone in facing the wrath of increasingly aware consumers who demand the best and have the means to communicate their anger to large audiences. Even Bollywood movies are not safe. Tees Maar Khan, a Farah Khan-directed flick, succumbed to the word of mouse within a week. “I could see the early negative comments stream in on Thursday from the preview shows. By Friday that had built up much more, and by Saturday there wasn’t anything the filmmakers could do,” says Karthik Srinivasan, the head of multinational public relations firm Edelman’s digital practice in India.
Quietly but surely, the PR scene in India has undergone a metamorphosis. Time was when companies could prevail upon a few newspapers and magazines not to publish negative news about them and their corporate images would remain intact.
Customers often suffered in silence and new customers had no way of knowing the track record of the product or service he was buying. It was a simple world of information hoarding and a host of local PR firms thrived by managing it through relationships and quid pro quo.
In many ways, that environment remains but change has begun to happen. A wave of international firms is sweeping over India’s shores. They see the potential to take the business of public relations to a more professional, systematic and pro-active level. They are trying to shake up a smug Indian industry used to treating PR as a minor cost centre focussed on managing a few journalists; and help it prepare for a more assertive and connected consumer base. In the process, PR is becoming a more strategic but expensive affair for companies.
And it is not just the Indian companies that attract foreign PR firms. The country has become an inevitably important market for global multinationals, but a tough one to crack given that customers are getting more demanding of product features but remain price-conscious. MNCs are asking their global PR firms to help them build a reputation in the world’s second fastest growing economy. “International agencies bring in a theoretical, empirical and data-driven approach to everything that was earlier in the fuzzy space,” says Jay Vikram Bakshi, founder of niche communications agency Digiqom.
Indian PR firms are at the middle of this change. Before time runs out, they must shape up to fight the onslaught or sell out to foreign brands. Many have indeed sold out — Genesis to Burson-Marstellar, IPAN to Hill & Knowlton, Hanmer & Partners and 20:20 Media to MS&L and Roger Pereira & Associates to Edelman. A few foreign agencies have started from scratch — Text100, Fleishman-Hillard, Waggener-Edstrom and APCO.
But a few Indian firms are holding out. “I don’t need someone to tell me how to compete,” says Madan Bahal, CEO of Adfactors, one of the leading PR firms in the country.
It is in this conflict that a whole new story of Indian PR is emerging.
You Owe Me One
The public relations business in India is fairly young; most firms trace their origin to the years following economic reforms. Using just sheer doggedness in chasing down journalists, a growing bunch of entrepreneurs fueled a mini-boom. For them, public relations meant little more than media relations. “Everybody who spent a few years doing PR opened up their own mom-and-pop shops, selling media execution. They worried about which hotels to hold press conferences in or what gifts to give journalists,” recalls Rishi Seth, founder-CEO of Six Degrees PR who earlier headed multinational PR firm Text100 in India.
The business was soon commoditised. Most worked on wafer-thin retainers and even slighter profits. To control costs, they began hiring inexperienced and cheaper employees. For many, the profession degraded to ‘planting’ nice stories about their clients or blocking negative stories. Journalists they managed to befriend co-operated.
The Niira Radia tapes offer an insight into what this culminated in: Chummy relationships between agencies, journalists and businessmen that skirt ethical boundaries, news stories that were planted or dictated by clients and the use of advertising to control what news organisations would say.
All that changed with the Internet and mobile phone. There are more than 500 million mobile users and about 80 million Internet users in India today. Nearly 70 percent of Web users are on some social network. Their trust in newspapers, TV news and yes, business magazines, is down sharply: 35-40 percent lesser than two years ago, according to a 2010 survey conducted by Edelman. But they’re connected, eager for information and willing to speak their mind.
Sen says firms like hers are also getting their clients to measure PR in a more holistic manner. “Instead of just looking at media clips, also look at citations in analyst reports, brand perception, the number of events the company gets invited to,” she says.
(This story appears in the 28 January, 2011 issue of Forbes India. To visit our Archives, click here.)