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Building relations

By TONG HAO (China Daily)
Updated: 2008-10-27 17:52

Paul Taaffe (left), chairman and CEO of H&K, at the signing ceremony on April 27, 2006 with members of BOCOG, which hired its communications consultancy.

 

Though the public relations (PR) industry is now regarded as one of the most promising sectors in China, Chinese people had little idea of what PR was in the early 1980s, shortly after the nation's reform and opening began.

They once associated PR (gongguan in Chinese) with relationship building around dining tables full of luxury dishes and liquor, and via expensive gifts and/or bribes.

Therefore, when US-headquartered Hill & Knowlton (H&K) launched the first PR agency in China in 1984, its courage won admiration and as well as suspicion.

"When I heard the news that H&K would open a Beijing office, I was so proud," says James B Heimowitz, who was then a media consultant for H&K Singapore and now is North Asia chairman of the PR agency. "My company had the ability to look forward and the willingness to invest in China before everybody else. I think that was a really smart move."

At the time the market economy was only just emerging, while the planned economy was still holding sway and Chinese businesspeople hadn't realized the necessity of PR.

As a result, a priority for H&K then was to spread the concept of PR and tell Chinese people what PR could achieve for them.

Fortunately for H&K, other foreign companies also entering into Chinese market in the 1980s brought opportunities to the nascent Chinese PR industry.

They included electronic manufacturers from Japan, such as Panasonic, Sony and Toshiba, beverage giants Coca-Cola and PepsiCo as well as fast-food behemoths KFC and McDonald's from the United States. In order to establish corporate images and expand market shares, these companies needed PR agencies.

In 1984, an opening ceremony for IBM's first office in China was held in Beijing's Tian'anmen Square. The event was, of course, a milestone for IBM but also one for H&K as its first PR-generated event on the mainland.

Chinese businesses gradually realized the necessity of good PR, especially those that began taking their businesses and products overseas.

"We are trying to introduce intentional experience and expertise and marry that with Chinese enterprises and their own capabilities," says Heimowitz, a PR veteran with 25 years of experience.

In recent years, an increasing number of Chinese companies have been expanding into overseas markets or going public overseas. As a result, a pent-up need to build a good corporate image and better connect with overseas investors, media and clients, has pushed Chinese companies to hire PR agencies.

"We have done more IPOs in China than anybody else," Heimowitz says with pride.

Baidu Inc, the biggest Chinese language search engine, launched its IPO on NASDAQ on August 5, 2005. Its stock price rose 353.85 percent on the first day of listing, making it the most successful company listed on the NASDAQ since 2000. The PR agency serving Baidu was H&K.

In addition, PetroChina, Ping'an Insurance and China Construction Bank have all turned to H&K for IPO PR work.

"One of our proudest cases in China was our work with the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG)," Heimowitz says. The PR agency was appointed by BOCOG on April 27, 2006 as the only communications consultancy for the sports event.

According to Paul Taaffe, global CEO of H&K, the company beat out seven other global agencies because of the H&K China team's commitment and dedication, the agency's knowledge of the Olympic movement and its large global network.

H&K helped both Athens and London win their bids for the summer Games and has been working for the International Olympic Committee for six years on strategic counsel and issues management.

Founded in 1927, H&K, the member of the world's second largest communications group WPP Group, currently runs a global network of 71 offices in 41 countries and regions.

H&K is a full service agency which covers 10 business sectors, including marketing, branding, investor relations, digital communications, IT communications, public affairs, healthcare and pharmaceuticals, crisis and issues management, executive trainings, and media training.

"So far, there is not just business coming into China, it is also business going from China to the rest of the world," says Taaffe.

Following H&K, many other foreign PR companies stepped into the Chinese market and Chinese PR companies, such as Blue Focus, started up around 1995.

Competition is increasing with experienced foreigners vying for multinational clients and local counterparts engaging in price wars. But H&K says it is confident with its advantages.

H&K says the great challenge for not only itself but also the whole PR industry in China is finding experienced and talented personnel.

According to statistics from Ministry of Labor and Social Security, demand for professional PR talents in China has risen 30 percent annually in recent years. But only one in a thousand in the mainland PR industry has received training in the field in college.

The demand is especially high given the rapid progress of China's PR industry. Statistics from China International Public Relations Association (CIPRA) show that the business volume of the Chinese PR industry exceeded 10.8 billion yuan in 2007, a 35 percent increase compared with the previous year.

"Many international companies want to double their size in China in the next three years and I am quite confident that PR will be in the center of their expansion strategy," Taaffe says.