Business Not As Usual. Public Relations in the Digital Economy

It was not the millennials who killed… Well, they didn’t actually kill anything. It is technology that transforms industries, offers new services, and enables new business models. The digital economy has also transformed the public relations industry, both in Europe and across the globe. Experts from Enterie, a PR network for startups, disruptors, and fast-growing tech companies, share their views on new communication challenges.

The innovative nature of the digital economy

What characterizes the digital economy? Most importantly—it is innovative. It offers services and products that have never been offered before. Growth requires a developmental approach—creating, testing, adjusting.

Secondly, the digital economy is transitional. At their more mature stage, technology startups tend to offer something completely different than what they started with. Pivoting is one of the most common and natural phenomena in this industry.

Products and services are modified in the process of their development. Sometimes they are altered completely, to better adapt to the customers’ needs and market feedback.

Digital economy businesses grow rapidly. Companies grow fast, as scalability is the foundation of most of their business models.

Digital companies also work fast. They have to, as barriers to market entry are relatively low, but the competition is strong. Short time to market is a key factor to win the race, users, and money.

All these characteristics have a significant impact on the way digital, fast-growing businesses communicate. And, in consequence, on what sort of communication partners they seek.

Disruptors choose disruptors

Similarity is probably the most common consideration when choosing a PR agency. No matter if you are a big or a small fish, a global corporation, or an early-stage startup. “Disruptive businesses look for disruptive agencies,” says Anthony Courtat, founder of COM’ I/O, a Paris-based PR agency. And his opinion is commonly shared in most of the European markets.

“Communicating technology was always a separate specialization,” says Alessandra Colao, the founder of an Italian PR agency Doppia Elica, “Talking the same tech language was always a crucial factor when hiring a PR agency. Today it is not enough. New digital businesses look for new partners. Bold, fresh and flexible, who not only talk like them but also act like them.”

Does size matter?

For a long time the size, meaning the size of a firm, was an indisputable advantage of big global network agencies. However, there was, and still is, another important factor.

“Traditional corporations usually go with big agencies, which are a ‘safe choice’ for corporate management”— says Courtat. When you hire one of the “Big Four” consultancy firm, no one in your organization will blame you. Even if a project they certified goes wrong. But if you decide to hire a niche player, the risk is on you. And it can cost you your job. PR consultancy business is no different. In the corporate world, the “grey hair charm” still works. But like it or not, in the digital economy, it is often the millennials who run disruptive businesses. They act bold and make bold choices.

Moreover, traditional businesses, feeling constantly challenged by disruptive competitors, also want to position themselves as innovative. Finding a place in the digital economy becomes a matter of surviving. Just look at the banking and finance industry, and how it adapts to the FinTech revolution. From denial to cooperation to copying. To communicate their innovative projects, corporations often seek innovative approaches. They look for fresh ideas, which they rarely find with their traditional partners.

Geek work culture

As many digital businesses grow from startups founded by developers, the geek work culture also affects them heavily, also on further stages of development. This refers to the flat structure and work methodology based on the Scrum framework. And tech word-stock often substitutes corporate jargon and tools.

This can be a bit challenging for external communication specialists, who have to somehow fit into this culture. They must get used to the fact that collaboration is often remote. And master such tools as JIRA, Trello, or Slack.

Short engagements and trial periods

When you are a fast-growing startup and change your business model every half a year, you are hardly ready for far-reaching plans and commitments. Trying and evolving is the nature of every digital business. Signing a yearly contract for some predefined services, which is often what big global agencies require, is too much of a risk.

“When we start to work with a tech startup, it is usually a project,” says Martin Ruist, Partner at Swedish agency Four PR. “Especially companies which are new to the market usually need some time to try and see results. They are not ready for a long time engagement.”

This approach is not unique for Sweden. “You can start with a trial period (usually three months). If both parties are happy, that will continue to an annual contract” — says Kate Hartley from Carrot Communications.

Flexible work scope

The digital economy transforms as the way business partners cooperate evolves. Trial periods and projects enable clients to try different tactics and see what brings the best results. Similarly to A/B tests in online advertising. This is an approach which is familiar to online businesses, and which they practice on a daily basis. Also, even in the case of retainer engagement, the scope of work can be changing throughout the year.

“When starting work for a new client, we usually do a workshop to set out an agenda for the next 3 months. Then, we evaluate and adjust our goals, messaging, activities, and budget. The business of our clients, the way it grows, together with market developments and activities of competitors, demands constant changes,” admits Magda Górak from a Polish PR agency, Profeina.

Measurement issues

Any online business’s performance is measurable at its every stage. However, such businesses are reluctant to spend money on something which is hard to measure. This is a real challenge for PR providers. PR firms are used to working with categories that are rather difficult to measure, such as reputation, image, and relations.

Even a quantitative index such as the infamous AVE does not really fit. It is simply hard to measure the impact of media coverage. In the case of online advertising campaigns, you can easily track how it converts to the actions you define. Traditional PR techniques, such as presence in TV, radio, print, or even online media, most of the time do not result in a direct purchase. And if they do—the result is difficult to extract.

The ethical issue

There is also an ethical issue in the area of results and measurements. When selling PR services, you can’t guarantee media coverage. In most markets, industry codes of conduct forbid signing a contract which specifies results, such as the number of articles in particular media outlets. Such regulations aim to prevent corruption. An agency cannot contract something which clearly depends on a third-party decision. And this being coverage, which depends on the editors. For online businesses, used to pay-per-click or -action, it is often difficult to understand. They are asked to pay for efforts, hoping for the best results.

Nevertheless, the rumor that says that PR is dead is largely exaggerated.

New-old goals: trust, relations, and content

Even in the digital economy, there are several tasks where PR in a traditional sense seems to be irreplaceable. Most important—in building trust. Paid ads won’t do the job. You need case studies and client testimonials, as well as ambassadors to back you up and give credibility. Getting some nice coverage in respected online media will be helpful when your client checks your company listing on Google. Once you gain trust, it is much easier to run sales support campaigns, build relations with clients, or improve your employer’s reputation.

Another key task for PR is in the field of regulatory relations. “Technology always outruns legal regulations and often performs in a legal vacuum—this is the nature of the digital economy. As disruptive businesses are always accused of murdering something (most often—previous regime competitors), they are always legal disputes and issues to be managed,” says Jakob Kemp Hessellund, Partner at Kemp & Kjaer, a Danish agency specializing in communication for innovative businesses:

“Therefore having an open conversation and relations with various stakeholders, who influence market conditions, is so important in the digital economy.”

And last, but not least—content. No matter the channel or the media—paid, earned, shared, or owned—good quality content is always desired. It happens so that PR agencies are the best providers of it.

A quick stunt or the long run?

Building real relationships—with the media, clients, or other stakeholders—requires time and patience. So when hiring a PR agency, you have to ask yourself some questions: about your goals, expected results, and the support needed. “When a client wants to establish his presence for good, build a reputation, and keep the customers’ attention, a longer engagement is necessary” – admits Jakob Kemp Hessellund, and adds:

“If you are an experimenting startup you should rather use traditional public relations to build the brand and reputation of your company, rather than to promote your services, which can change fast. Once you have a stable product and a business model, you can move on with activities to support your sales. PR, same as any other marketing tool, demands a certain level of maturity.