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Vital speeches of the day

The Rise of Communications Marketing

Communications must operate with the rigor and analytics of marketingand marketing must operate with the
storytelling mindset and marketplace reality of communications. They are inextricably linked.
Address by RICHARD EDELMAN, CEO,
Edelman Public Relations

hank you, Gary, for your kind

introduction. I congratulate John
Onoda on being recognized as one
of the most outstanding practitioners
of this generation. I was startled and
deeply moved to learn of the Societys
decision to induct me into the Hall of
Fame. It is the highest honor I have
ever received; to be recognized by my
peers as having made a significant
contribution to our field.
Seventeen years ago, Dan Edelman, who was my best friend and
mentor, received this distinguished
Hall of Fame award. I am humbled to
follow in his footsteps. He is credited
by many as the father of marketing
PR; he understood the potential of
earned media to enhance the marketing message.
He gave me opportunities before
my time, endured my awkward missteps as a 26-year-old manager of the
New York office, critiqued my ideas
and celebrated our achievements in
his understated way. For that I am
eternally grateful.
I accept this award on behalf of the
entire Edelman team, but especially
my late parents, Dan and Ruth
whose founding values of integrity,
entrepreneurship, decency, hard work,
creativity and citizenship continue to
inspire our 5,000 people in 65 offices
around the globe. My parents work
is carried on by my sister, Renee, my
brother, John, and now generation
three, my daughters Margot and Tory.
My thanks to all the Edelman people,
past and present, and most of all to
our clients, for enabling Edelman to
surpass my parents wildest dreams.
I have now been in the PR business for 36 years, since I graduated
from business school, all of them at

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Delivered upon induction into the Arthur Page Societys

Hall of Fame, New York City, N.Y., Sept. 21, 2014

Edelman. I have a very different background than many of my competitors;

I never worked in journalism nor have
I served in government.
My lack of journalistic experience
was apparent when my first boss in
New York City, Dick Aurelio, who had
been an editor at the Providence Journal, tore my copy apart on the first
and second drafts of press releases.
However, my background also
brought with it some real advantages:
financial and business acumen, early
recognition of marketplace opportunities in areas such as digital, and a
network of peers around the business
community. These all have helped me
immensely.
And eventually I even learned how
to write or at least to blog.
Ladies and gentleman, over the
next few minutes I want to challenge
you to think about our responsibilities
in a new way. It will even make some
of you uncomfortable. I sincerely
believe that we must move communications into an even more missioncritical role.
We will build from our core,
enhancing corporate reputation and
employee engagement, into new
areas such as customer service and
new product development. This will
require a melding of marketing and
communications, grounded in datadriven insights, and taking risk with
ideas. Marketing can no longer do it
alone; the solution to every problem is
not a new advertising campaign. We
need real action to solve todays complex problems, inspired by communications thinking.
I believe that we are ready to do
this because of the values we embrace,
the principles of practice we have

drawn from the work of Arthur W.

Page and the skills that we in public
relations uniquely possess.
Here are five important developments that make this evolution a
necessity.
First: there have been tectonic shifts
in trust. Confidence in government
has collapsed due to perceived incompetence and paralysis, while business
trust has soared from the low point
in 2008. And yet there is residual suspicion of business; by a three-to-one
margin, respondents in the Edelman
Trust Barometer want more government regulation of energy, financial
services and food.
There is great evidence of dispersion of authority. A person like
yourself is twice as trusted as a CEO
as a spokesperson and peer-to-peer
conversation has supplanted top down
controlled messages. The average
informed person today has eight daily
sources of information and needs to
see a story three-to-five times in different places to believe it.
The second trend: we are living in
a world of unprecedented complexity.
Globalization, technology and privacy
are colliding. Such important developments as cloud computing, hydraulic
fracturing and genetically modified
crops are being paralyzed by arguments that rely on emotion and individual perception of risk.
There is a new minimum standard
today for introducing new types of
products. Business must move beyond
the classic goal of license to operate
toward a broader ambition of license
to lead, in which it earns societal
approval of innovations by listening
and adapting. Consider Samsungs*
wearable product, which requires

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RICHARD EDELMAN
new standards for protection of
health information, with users deciding which applications have access to
their data.
Third, brands are now also acting as representatives of their
communities.
Brands are built not only through
the tangible benefits they offer, but
also in inspiring people through causes
and content sharing. As activists and
organizers of movements, such as the
Dove* Campaign for Real Beauty, the
brands are forcing change.
The new role of brands as leaders
was best displayed in the rapid decision from the 13 sponsors of the Los
Angeles Clippers basketball team.
They discontinued their relationship
upon learning about the disgraceful
racist remarks by former owner Donald Sterling, making it easy for new
NBA commissioner Adam Silver to
insist on the sale of the team.
Fourth, the very nature of media
has been transformed. The reader is
now also content creator and advocate. The born-digital brands such
as The Huffington Post rely heavily
on contributors and on comments by
informed readers in an ongoing discussion. Publications such as The New
York Times now offer high-quality,
high-performing sponsored content
that runs alongside earned media.
And media companies are now adding
short-form video alongside other content, which is evidence of the need to
show and tell.
Smart companies are creating
their own newsrooms, with vertical
sub-brands that focus on R&D, policy
debate and innovation. With more
people now discovering content via
social media than search, our material must be both substantive and
social by design.
Fifth, technology is causing the
integration of corporate reputation
and brand marketing. Consumers do
not differentiate an engagement with a
corporate call center from an interaction on Twitter. This means that great
companies are making change, not
waiting for it.

A case in point: Nestl* is adopting

animal welfare standards that affect its
7,300 suppliers. Why? Kevin Petrie,
chief procurement officer, said Consumers today care far more about
how the components in their food are
made, and since they all have smartphones they are willing to share their
knowledge everywhere.
So given these five trendstrust,
complexity, brands acting for communities, the transformation of media
and technology tying together reputation and brandhow should we
reconsider the challenge of interacting with consumers and other
stakeholders?
We need to start by shifting our language from talking about marketing
communications to using a new paradigm: communications marketing.
Wait a moment, Richard, you have it
backwards; its always been marketing communications. That is exactly
the point. Communications must be
a full partner with marketing, beyond
just building credibility to becoming
the change agent.
This simple act of reversing two
commonly used words reflects a new
environment where classic, imagedriven marketing is giving way to a
new focus on long-term relationships.
Brands must evolve into Living
Brands, operating with a clear mission
and purpose, inviting participation
from the community, being responsive
in real-time and offering an ongoing value exchange. Living Brands
embrace todays complexity and are
responsible for the supply chain, the
well-being of customers and helping to solve societal challenges. The
Living Brand utilizes creative storytelling that relies on actual consumer
experiences vs. idealized, 30-second
spots. Consumers are connecting the
rational, emotional and societal dots
of a brandand brands need to do
the same.
There are three governing principles of communications marketing:
Evolve, Promote and Protect.
Evolve is to enable serious change
inside the enterprise or to introduce a

product that is a discontinuous, large

step forward. We help our fellow executives lead the organization, not manage perceptions. We see around the
corner to predict what will happen,
make alliances with partners such as
non-governmental organizations, listen
to community feedback, then adapt
the strategy to meet the needs of the
marketplace. A good example of this
is CVS*, which boldly stopped selling
cigarettes and walked away from $2
billion in sales, but also renamed itself
CVS Health last month as a clear signal of its path forward. There is now a
13 percent likelihood that U.S. adults
would consider shopping at CVS, up 4
points from the beginning of the year.
Promote is grounded in our storytelling heritage. However, its not tied
to campaigns as in advertising, but
rather designed to create movements.
Our job is to be alive 24/7 with content and immersive experiences that
are true to life and add value to relationships. GE* recognizes that every
company can be a media company
in its GE Reports, Technologist Blog
and Ecomagination sites. Products
under the Ecomagination brand now
account for an increasingly important
percentage of sales.
Protectis well beyond crisis management. We need to hold the organization to its promises where it matters
most, on issues as diverse as human
rights, tax and product safety. Globalization and transparency are permanent game changers; brands can no
longer try to suppress or divert. We
now must be publicly accountable and
aim to prevent problems, not solely
repair them.Pepsicos* Performance
with Purpose initiative has a number
of goals for portfolio improvement
and sustainability, with annual public
reporting of results and connection to
financial incentives for management.
Communications marketing
returns marketing to its roots. In 1959,
Northwestern Professor Philip Kotler defined marketing as, Creating,
delivering and communicating value
to customers and managing customer
relationships in ways that also benefit
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368
the organization and its shareholders.
This matters because the goal must be
to enable change. Consider what Unilever* CEO Paul Polman told me last
month: One third of our sustainability plan of doubling revenue without
raising resource consumption has been
achieved by fixing our supply chain.
Now comes the hard part, the other
2/3 of the change, to alter consumer
behavior, to take shorter showers and
use cold water wash.
This will happen only with superb,
creative work. It is a false choice to say
that our programs need to be substantive instead of brilliant. I attended the
Cannes Lions for the first time this
summer. What was clear to me was
that the lines have blurred. Brilliant
ideas can come from everywhere: ad
agencies, digital firms, media buyers
and PR firms. A great story will win if
it is brought to life through powerful
creative, with immersive live and virtual experiences and by leveraging the
full force of earned, owned and paid
media.
We must be brave enough to make
organizational and cultural changes,
to welcome planners, digital and social
media experts, creative talent, media
superstars, developers and quantitative
analysts who can do this kind of work.
They will create the stories that are
meant to be talked about in the socialized, democratized world, that give
people a reason to engage with your
brands on an ongoing basis. They will
design apps that make it easy to participate in a brands future.
The value of communications
marketing is already being recognized by leading senior executives.
Consider these words in a Harvard
Business Review interview with Keith
Weed, CMO for Unilever:In a

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Vital speeches of the day

joined-up, social, digital world, I dont
think that you can separate communications from marketing. If you do,
youre talking out of two sides of your
mouth as a company.
Or consider what Rick Goings,
CEO of Tupperware Brands* told
Edelmans Global Leadership Team
in June: Get marketing behind communications. We have abdicated what
marketing can be. The soul of the
company is authenticity, purpose and
localization of your offer.
Smart corporations are reacting
already to this new reality by giving
communications and marketing leaders a much broader set of responsibilities. Consider Andy Pharoah at
Wrigley*, who added the role of Chief
Strategy Officer to his CCO day
job. Or John Iwata, formerly CCO,
now CMO and leader of the strategy group at IBM, who conceived of
a partnership between IBM Chinas
research laboratory with the Beijing
Municipal Government to forecast
and control air quality in real-time so
that factories could be closed on bad
air days. These executives recognize
that their role is to evolve, promote
and protect their companies, always
doing what is right for the enterprise.
To make communications marketing not just an ideal but a reality:
We EMBRACE new skills and
capabilities that are predicated on
systems thinking, a global view, and a
relentless pursuit of innovation.
We ADVOCATE for substantive
change in a brand or corporate strategy tied to competitive advantage and
societal benefit.
We ENABLE business to be seen
as a force for good, a values-based
approach in order to change consumer behavior.

We PARTNER with civil society, for the capacity to deliver services

on the ground in a credible manner,
while business offers the capital and
expertise.
We OFFER outstanding creative ideas that catalyze communities
throughstorytelling that is useful and
incredibly simple to share.
We PARTICIPATE in the revolution in media by embracing earned,
owned and paid media.
We PROVE that our ideas and
programs drive substantive impact
by connecting the results to key business metrics such as consideration,
demand generation, loyalty, image and
reputation.
Communications must operate with
the rigor and analytics of marketing
and marketing must operate with the
storytelling mindset and marketplace
reality of communications. They are
inextricably linked.
Thus, Communications Marketinga powerful way to re-imagine the
opportunity staring us in the face.
This is public relations creating
outcomes that change the path of
the corporation while also improving
society. This evolution is the consummation of the dream of Dan Edelman
and is entirely consistent with the Page
Principles. In the end, we are advocates for truth and prove it through
our behaviors and actions. No other
discipline holds these values as closely.
For you as communications and
marketing executives and for those of
us in the PR agency world, it is our
time to lead.
Thank you again for this incredible
honor.
*Edelman client