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Rose 2.0 - The Sovetnik Interview

On the occasion of my agency's 25th anniversary, I was interviewed recently by Russia's leading Public Relations magazine, "Sovetnik". For those of you who may be interested, here is an English translation.

There are a number of points made about public relations in the era of social networks that may be useful to readers of this blog.

Rose 2.0: Russia’s oldest independent agency reinvents itself at 25.

After over 25 years in business and over 20 years in Russia, Rose is reinventing itself as an agency that understands how best to meet the challenges that are presented by the socialization of marketing and media in our culture. I sat down with Rose founder and marketing veteran, John Rose to find out the secret to his agency’s longevity and his plans for future growth by guiding his clients into the social media age.

Congratulations for achieving such an incredible milestone – 25 years in business, including 20 years in Russia. How did Rose begin and what brought you to Russia?

Thank you. I began my career in radio, then moved to an advertising agency and finally became a marketing consultant before I brought in a partner and founded my agency in Boston in 1984 with Marriott Corporation as our first client. We merged with a much older agency in 1987 to become Friedmann & Rose and built a strong business serving primarily hospitality, technology and energy companies.

We began consulting a Russian newspaper in early 1989 on how to create an international business magazine that would be the first to accept advertising. When one of our Boston clients, Kodak, found out we were working with Russian publishers, they asked us to make some introductions and I began travelling to Moscow with them, and set up a small office. We continued to handle projects for Kodak, and then for pharmaceutical giant, Merck. When I read in the Wall Street Journal that Coca-Cola was planning to open their first bottling plant in Russia, I contacted them and we quickly became their first agency in Russia. Our next big break was when we won Sony. From there the agency really took off. We were just

Why do you think you have survived and been successful for so many years?

There are several key reasons for our success and survival. As I was saying, without question, we benefited greatly from being among the first agencies to enter the former Soviet Union in 1989. Before the competition became heated, we were already established and working for major international clients. So timing played a big part in our success.

Of course, in addition to great timing, we have had some great people over the years. We also have benefited from continuity. Galina Savina, our general director, was literally our first employee in Russia. Today she runs the business – a job she has held now for many years. Together we have built a stable agency that has been profitable every year.

Thirdly, we were independent and self-financed. When we began, very few American companies were doing business with the USSR. When we told our Boston bankers we wanted to open an office in the Soviet Union, they thought we were crazy and made it very clear they would not support us. This made it more difficult for us at first, but turned into another key factor in our success. For years many network agencies were not profitable in Russia. When I was asked how we managed to turn a profit every year I simply said “because we had to.” In the beginning we had to make money because we had no other way to finance ourselves. So we developed a strong financial discipline very early and that has served us well over the years – especially during very turbulent times like we are experiencing at the moment.

Lastly, I think we were successful because we were quick to adapt to changing market conditions and were not afraid to reinvent ourselves. We began primarily as an advertising agency running many of the first big television and outdoor campaigns for companies like Baskin-Robbins, Coca-Cola and Sony. But as the media buying business became more commoditized, we began to focus on other businesses. By the time the 1998 financial crisis hit, we had diversified into public relations and other marketing services. So when the media business was devastated by the ’98 crisis, we still had a healthy company. Today, Public Relations is the biggest part of our business and we focus on creative strategies across several marketing disciplines. And our business has survived the current recession because of the flexibility of our business model.

So how is the agency adapting today?

We have added new services to our agency offering over the years, including reward marketing and we are expanding our events business. However, for the past few years we have been in the process of reinventing the agency to incorporate digital communications and social media. Social networks are turning businesses on their heads and we will be ready to guide companies successfully through the process.

In addition to the integration of social media, I believe that the agency of the future will have to become more intimately involved in their clients business and share in their successes and failures. We are developing flexible compensation schemes with clients that focuses on rewards for performance. We are also reviewing opportunities to partner with companies and participate in the profits of their businesses.

Isn’t "reinvent" just ‘marketing speak’ for "re-brand"?

No. We’re not rebranding. We like who we are and our position in the market. But we must completely reinvent ourselves to integrate social media into every aspect of what we do.

Our new focus will be on content development and creativity in public relations and the other services we offer.

We are making changes in every part of our business. We moved into new offices last year that we designed with the help of an architect. It’s a very unique, almost theatrical ‘brandspace’ we built inside part of an old textile plant. We have a bar, a music system on all floors and there are no doors – other than the trapdoor and ladder between my office and the floor below. In our business we believe the workplace needs to be a little playful to encourage creativity.

And we have been educating and retraining our team to meet this new reality we are creating.

Why do you believe that social networks will turn businesses on their heads?

The advent of social networks does not just present us with another marketing tool or media outlet. It is a complete game changer. Whereas in the past the media have acted as a filter for messages we deliver on behalf of our clients, today we can bring our stories directly to the people we want to reach.

For clients this means they will have to change the way they run and promote their businesses. In the past we broadcast our marketing messages via the media using paid advertising and public relations. Companies will now have to engage in conversations with its customers and be prepared to share control of their brands.

What do you mean by “share control”?

The fact is, companies lost 100% control over their brands a long time ago. People are out their right now talking about brands with or without the company’s permission. Social media has created a new democracy in which a brand’s future is as much in the hands of its customers as its marketing department. Any company that hides its head in the sand and pretends this isn’t happening will pay a very high price. Companies must embrace this new and somewhat chaotic reality. Those who do will reap significant rewards. We feel that it is our job as a PR agency and marketing partner to guide our clients through this transition and help them win a disproportionate share of the market in the process.

So you believe Social Marketing is the sole responsibility of public relations?

In the not too distant future, I envision social media as the almost exclusive domain of public relations professionals. I think right now there are three camps. A small camp of PR practitioners who “get” social media and are applying it at their agencies or companies; another slightly bigger camp of those who sense something is happening but have taken little or no action; and another much much bigger camp of those who don’t even sense that a tidal wave of change is near.

I believe that it is not only logical but fitting that public relations assumes the central role in social media. It addresses the primary concern of the online community that marketing does not belong. Basically these people don’t want to be marketed to. Or at the very least they want to receive only marketing information that is absolutely relevant to them. If we can successfully strip away the corporate speak, public relations representatives are the least likely to be perceived as hucksters and salesmen (vs. sales or advertising etc.) and most capable of speaking as humans to humans.

In my opinion, much of social media is essentially online public relations. Divide the category up by component — blogs/microblogs, social networks, podcasts/Web TV, collaborative software, webinars — they are digital equivalents of offline public relations components like writing, corporate communications, community relations, media relations, event management.

The key difference is that we can now deliver our messages directly to consumers. Also this presents an enormous opportunity for public relations professionals at both clients and agencies. Public relations will now take center stage in the marketing process for companies the way advertising once did. If you want to be the next public relations super star, become the social media champion at your agency or company.

Does social media mean the end for conventional media?

I believe it is the beginning of the end. We grew up with television, radio, newspapers, etc. and remain somewhat loyal to them. But the newer generations are far less loyal and are used to spreading their time across a variety of digital information, entertainment and social media choices. I believe that conventional mass media, as we define it today, will either consolidate or find smaller, more segmented audiences using superior content or port themselves to digital distribution channels…or die.

How will the approach to Public relations change?

I have always believed that marketing is all about storytelling. From the beginning of time, people have been informed, educated or entertained by stories. This will never change. But now technology has given more people the ability to tell their stories. The challenge for brands will be to remain relevant by telling more interesting stories and bringing more interesting content to their customers. Great PR is really just telling stories in a way that connects like-minded people. This will continue. But the process will be different.

Public relations has always had at its core media relations. The relationship between a company (directly or via its public relations agency) and editors, producers and journalists has always been vital to the success of any publicity campaign. All other public relations activities have been designed to maximize the opportunity to enhance these relationships. And it was only through the public relations professional’s ability to cultivate these relationships (and provide somewhat newsworthy material) that any public relations program was effective. Frankly, it has always been a love/hate relationship between the media and the publicity machine engineered by companies and agencies. But no one ever taled about that very much.

While much of this effort will continue, the centerpiece of any publicity program will no longer be media relations. Now it will be about content delivered via social media and other online channels. Also, a new discipline has to be introduced called “listening”. We must leverage the power of social media by listening (or reading) to what customers are saying about our clients’ brands, gain insight from what we “hear” and engage in conversations. Companies who fail to listen to what their customers are saying about them and ignore their opinions will pay a high price. Participation is the new marketing.

In practice, what will change in how public relations is conducted in business?

It’s already changing. PR agencies are already writing blogs and working with bloggers; some are attempting to leverage social media. Yet most of our efforts are devoted to working with journalists.

PR agencies must become content development machines. We must engage consumers via blogs and microblogs like Twitter. We must be part of the conversation about our brands on social networks like Facebook, YouTube and VKontakte.

Moving forward we will be abandoning press releases. Instead, we will be using Social Media Releases, Video News Releases, Social Applications, Search Engine Optimization, Social Media Optimization and relying much more on audiovisual content to deliver our messages directly to consumers as well as media. In fact, I believe that mainstream media will react more and more to the conversations we inspire in social media – which flips the conventional publicity process upside down.

A huge shift in the publicity process will be that more communication will be initiated by consumers. Public relations will have to engage with consumers and react hour-by-hour; sometimes minute-by-minute with shifts in public perceptions of brands.

Perhaps the biggest challenge will be how well companies and agencies react to the new pace of communications. Everything is moving faster. We no longer have the luxury to learn a day in advance of when a story might break and ‘sleep on it’ before we determine how to react. PR 2.0 operates in real time. Most companies’ crisis communications plans will be all but useless if they can’t react in minutes instead of days and weeks. I predict that a lot of PR professionals will fail before companies wake up to this new reality.

So you believe that any agency that doesn’t jump on the social media train will fail?

I think that is a distinct possibility.

The fact is, Public Relations was already broken before social media came along. The PR practitioner is already seen as a ‘spinner’. We have the reputation of someone who either spins or twists the truth for his client; or as someone who acts as a blocker or gatekeeper that stands between the company and the media to keep the truth from getting out. The fact is, PR has never enjoyed a great reputation. Which is amusing since we are responsible for preserving and enhancing the reputations of thousands of brands. Unfortunately, PR has never had great PR.

The socialization of the media is perhaps the greatest opportunity that has ever landed at the doorstep of public relations professionals. Instead of the spinners and blockers, we can become the conduit, the medium through which companies and communities talk to each other. We can represent the company to the consumer out in the real world, and we become the voice of the consumer within the company walls. Our insight will drive the fortunes of companies for years to come and we will enjoy the spoils of our efforts. It’s a new dawn.

What is the biggest challenge to agencies? Or....what is your advice to agencies?

We can’t be of much use to our clients until we learn the ropes ourselves. So the first step is to completely immerse ourselves in the process of social marketing.

This won’t happen overnight. It will take years. I personally have spent the past several years blogging (I have 2 blogs -- one for the agency and one for a book I wrote) and on Twitter (I have several Twitter accounts with a few thousand followers) as well being active on Facebook and LinkedIn. The agency has several Twitter accounts and is on Facebook and Vkontakte. And more and more of our people use social media daily. So we understand it because we are immersed in it. We are still learning. But then again, no one is an expert yet.

So public relations professionals will have to learn what we have learned. Fast. They will have to start blogging, tweating, etc. Or they will find their clients running to agencies like ours. Hey, wait a minute! Maybe you should forget everything I’ve just said. We could use more clients.

What about specialized social media agencies?

I think that agencies specializing in social media will have a short window of opportunity to grow while most marketing and public relations agencies are still trying to figure out how to incorporate social media into their service offering.

But knowing Social media is not enough. That’s why I believe that clients will gravitate toward agencies like ours that understand the full picture. A standalone social media agency without experience in PR and marketing cannot consistently develop social media marketing campaigns that fit the long term strategy of a brand. Hiring a social media consultant or agency that has no significant marketing experience is like hiring a teenager to market MP3 players. They know how they work, have lots of consumer insight and may even offer a few clever tactics, but they know nothing about marketing and are unlikely to sell a whole lot of MP3 players. There is no substitute for experience.

What is Rose doing for its clients?

We have for some time been conducting blogger outreach programs and we are listening to customers and engaging with them via social networks on behalf of clients. We have introduced monitoring and reporting systems. We are training and expanding our client teams.

Our goal is to fully integrate social media into our public relations service offering for our clients. We also offer a standalone (marketing savvy) social media solution for clients that already have a public relations agency. And we are preparing several significant social media campaigns. Please watch for them.

About Rose

Rose was founded 25 years ago in Boston USA by CEO, John Rose. It was the first independent agency to enter the former USSR in 1989. This year it celebrates 20 years in Russia.

Rose has approximately 40 Russian employees in 5 offices: Moscow, St Petersburg, Ekaterinburg, Novosibisrsk and Nizhny Novgorod. All are Western-trained and have an international work ethic.

The agency has received numerous national and international awards for its creativity and campaigns. Seth Godin, entrepreneur and author of the bestselling book Purple Cow, included the agency in his Bull Market Directory, a resource for connecting organizations with some of the world’s most creative thinkers. “Rose has demonstrated that it is a Purple Cow catalyst, helping clients shake things up and think innovatively,” commented Godin. Rose has challenged its clients to become spectacular and invigorating.”

Rose provides advertising, public relations, corporate strategies and integrated marketing services, including social media, digital marketing, promotion and experience marketing (events).

The agency has worked for some of the world's best-known companies and brands, including Coca-Cola, Glaxo SmithKline, Pfizer, Benckiser, Volvo and Samsung, with whom they have worked for over 13 years

Agency founder, John Rose is also a food and travel writer. He conceived and edited a best selling book about the history of Marriott entitled the “Marriott Hot Shoppes Cookbook, 60 Years of American Cookery”, and is the author of the award-winning "The Vodka Cookbook", sponsored by Smirnoff and published by Kyle Cathie worldwide.