Under the Media’s Skin

By Jon Hoel

Companies as diverse as Microsoft and Starbucks have provided striking proof that public relations (PR) can generate the kind of sustained attention that builds brands and boosts sales figures. While compared with most English-speaking countries, the PR profession is less established in Japan and the industry agency-side relatively small, it is vibrant. In 2005, Kyodo PR and PRAP Japan were the first domestic agencies to go public through initial public offerings.

PRAP Japan President and CEO Satoshi Sugita says that while Japan as a PR market is somewhat different from other countries, there are more similarities than differences, “If you can capitalize on the similarities, using techniques that have worked in campaigns elsewhere, it is possible to consider those for adaptation in Japan.”

Also in 2005, Edelman joined the ranks of international PR firms with a Japan presence that now stands at 30 consultants. “Public relations is poised for a revolution in Japan as it dawns on more and more companies that they can’t buy trust through controlled advertising,” Robert Pickard says.

James Weeks: “PR in Japan will not achieve international level capabilities until more Japanese companies invest in dedicated expertise and resources.”

Representative Director of Edelman Japan and President of Edelman North Asia, Pickard says, “while PR is a flourishing and sophisticated craft internationally, in Japan the Dentsu model is so dominant and stifling that the prevalence of paid media coverage over earned media coverage stunts the incentive to innovate, so PR trails rather than innovates.”

James Weeks, Executive Chairman Japan/Asia-Pacific at Gavin Anderson & Company, which has been successfully operating in Japan since 1985, says that stakeholders are becoming more demanding, but Japanese companies are still far from addressing those demands in a sufficiently rigorous and strategic fashion.

Weeks observes that there is a continuing reluctance in parts of corporate Japan to fully accept what he terms the ‘primacy of the marketplace,’ including “the power of key external stakeholders to withdraw approval and consent. Obviously these things are understood by sophisticated Japanese corporations, but not in quite the same way as in the West, and not quite as profoundly.”

Paul Hasegawa: “I believe in ‘think global, act local,’ but you have to understand the idiosyncrasies of Japan.”

“In crisis situations, for example, the instinctive tendency is often to circle the wagons to keep the outside world at bay, and this can lead to a state of denial. Junior people are afraid to tell the senior people what happened. Misdeeds are covered up. And what started out as a serious problem eventually escalates into a crisis of huge proportions,” he continues.

Tohru Sakuwa is Senior Director of Tokyo’s Keizai Koho Center, an institute affiliated with the Keidanren (Japan Business Federation) which conducts research on business communication. Sakuwa has authored several textbooks aimed at helping Japanese companies develop a more unified PR function. He has also recently translated into Japanese the book Evaluating Public Relations, an activity that is essential to justifying a PR budget.

According to Sakuwa, within most Japanese companies, PR-related functions such as labor relations, investor relations, media relations, corporate social responsibility and crisis communication have developed in an ad hoc manner, whereby people learn on the job as part of their normal rotation through various departments. “Most Japanese companies still don’t have an overarching PR or corporate communications department that unifies those functions. Particularly, such functions as labor relations and CSR are handled by other departments,” he says.

Robert Magyar: “Japan’s public relations industry is less than one-tenth of the size of the US industry.”

Despite a lack of in-house PR specialists, calling in outsiders is not part of the traditional business mindset in Japan, though this is changing as a series of corporate reputation meltdowns have driven home the need for outside PR counsel. But while in the 1980s PR agencies started to gain attention and major international agencies set up on Japanese shores, much of this growth was driven by servicing the needs of overseas companies unfamiliar with Japan.

Paul Hasegawa, Executive Director of COSMO PR, a home-grown agency that has been active in the Japanese market for several decades, says a strategic PR consultant needs to understand the intricacies of Japan’s distribution system, as well as the trade, product and consumer scene relevant to a client’s industry sector.

“I’ve worked in 37 countries, and I don’t really think Japan is all that different,” Hasegawa says. “I believe in ‘think global, act local,’ but you have to understand the idiosyncrasies of Japan.”

According to research by Weber Shandwick, at about US$600 million per year, Japan’s public relations industry is less than one-tenth of the size of the US industry. “This is despite the fact that Japan’s advertising market is almost on a par with the US advertising market, at over US$50 billion in sales,” comments Weber Shandwick Japan Vice President Robert Magyar.

Robert Pickard: “Public relations is poised for a revolution in Japan.”

Many people equate PR with ‘earned’ media coverage. When a journalist reports on a company in a favorable light, the perception is that it has earned that attention. This can carry more credibility than an advertisement, where the audience knows someone has paid to communicate a message. But while effective, publicity is to PR what good looks are to a relationship—a great way to get things started, but only part of building and maintaining successful relationships. In today’s more challenging business environment, when corporate reputations are dragged through the mud, PR is about protecting reputations.

Weeks of Gavin Anderson & Company, says that while he has seen a lot of improvement, PR in Japan will not achieve international- level capabilities until more Japanese companies grasp that it’s a strategic function requiring investment in dedicated expertise and resources. Part of the answer, he says, is being more open to listening to qualified outside experts who can objectively analyze the company’s communications requirements and provide frank insights into how to build, manage and protect corporate reputation.

Robert Pickard firmly believes that companies cannot buy trust through the old model of one-way, top-down corporate advertising to passive consumers, and says that companies need to earn trust through two-way, peer-to-peer conversations with ‘pro-sumers’ who have a voice. He argues, “The voice should be empowered by creating relationships with those in authority. PR mastery of the relationship imperative in the new world of online social networking is just one dimension of this.”

Pickard perceives an emerging generational change: when young Japanese marketers posted abroad see the power of public relations, they are restless to give the new and effective PR technology they’ve seen a try at their own companies: “People who don’t understand it might say ‘that will never work in Japan,’ but this new crop of rising talent knows that’s nonsense and it won’t be long before they are calling the shots on how budgets are spent,” he says.

Most of the podcast interviews on which this article is based will be available for listening at www.prjunctionpodcast.com