Has the Era of Media as the Primary Target for PR and Communications Come to an End? Advancing "Value-Creating" PR

While financial metrics like sales and ROE (Return on Equity) are certainly important as measures for evaluating corporate value, engaging with ESG is crucial for companies to be continuously evaluated as viable medium- to long-term investment targets.

Indeed, the number of companies holding "ESG briefings" to communicate their integrated value, alongside earnings briefings, is rapidly increasing, and this trend is expected to accelerate further.

Our research institute believes there are three major types of "value" companies should communicate (see Figure 3).

• "Product Value"
  This is the direct point of contact with customers, where convenience, quality, and other aspects are emphasized to help customers experience the value being provided.
• Market Value
  Primarily targeting shareholders and investors, this communicates the company's growth potential and demonstrates its vitality.
• "Social Value"
  The core value of the company, gained by collecting stakeholder feedback and incorporating it into corporate management to earn society's trust.

While ESG initiatives primarily contribute to market value, it is crucial to recognize that social value is inherently embedded within both market value and product value.

To continuously earn society's trust, it is necessary to re-examine the company's social value, create facts that connect to social value, and engage in information disclosure and communication.

[Figure 3: Value Companies Should Communicate]

③ From Shareholders to Stakeholders
On August 19, 2019, the U.S. business organization "Business Roundtable" declared a shift from shareholder primacy to "stakeholder capitalism." It stated that companies are accountable not only to shareholders but also "to customers, employees, suppliers, communities, and shareholders."

Furthermore, it emphasized that companies should aim not only to maximize their own profits but also to realize their purpose.

<Details here>
https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans

A similar theme was also addressed at the 2020 Davos Conference.

Our institute's survey also reflects this global trend. Significant changes are evident in the responses to the question asking corporate PR officers about their "prioritized stakeholders/targets" (multiple answers allowed).

The 2020 survey results, as shown in Figure 4, were:
1st place: Shareholders/Investors
2nd place: Customers
3rd place: Employees and their families
4th place: Media
Figure 4: Top 10 Most Important Stakeholders/T

[Figure 4: Top 10 Prioritized Stakeholders/Targets]

For the first time since the 2014 survey, "Media" dropped to 4th place. "Employees" in 3rd place have increased their score every year since the first survey, rising by 25.0 points over six years. Additionally, "Business Partners" in 5th place have also gradually increased their score, closing the gap with Media to just 0.6 points.

This data reveals the following:

The key mission of public relations and PR activities has evolved beyond merely "creating buzz" through the media to building strong relationships (relationship-building) with stakeholders critical to the company.

Our institute has defined three representative approaches for successful "value creation" PR as follows:

• Pursuing "social value" centered on the primary target: "1st place: Shareholders/Investors. "
• Building "engagement" with the key target group "2nd Place: Customers. "
• Practicing "Internal Branding" with the key target group "3rd: Employees and Their Families."

Details on these "Three Approaches" will be discussed next time.

The "Integrated Thinking" PR Departments Must Master for "Value Creation"

Finally, I will discuss the "thinking necessary for value-creating PR." That is "integrated thinking."

In PR and communications, "integrated thinking" means

the ability to plan and produce compelling value based on facts buried throughout the company.

.

The PR department possesses the ultimate weapon: "information." Accurately grasping and anticipating the expectations and concerns of key stakeholders, feeding this insight back into the company, and further creating synergy with external parties—this mindset of producing corporate "value creation" is indispensable for the PR department going forward.

In other words, under this "integrated thinking" that transcends internal departmental boundaries and even integrates external resources, the PR department should function as a producer that elevates corporate value.

"New Strategic Thinking in PR Management: How to Hone the '8 PR Capabilities' That Drive Corporate Value Enhancement " Edited by: Corporate PR Strategy Institute (Dentsu Inc. Public Relations) (Nikkei BP)

&nbsp;

[Survey Overview]
■Corporate PR Capabilities Survey
Survey Period: May 22, 2020 - August 7, 2020
Survey Target: Companies listed on the Tokyo Stock Exchange First Section, Second Section, Mothers, JASDAQ, Sapporo Securities Exchange, Nagoya Stock Exchange, and Fukuoka Stock Exchange at the time of publication in "Company Quarterly Report 2020" (3,679 companies)
Valid Responses: 474 companies (response rate: 12.9%)
Survey Method: Mail and online survey
Survey Sponsor: Corporate Public Relations Strategy Institute (within Dentsu Inc. Public Relations Inc.)
*Figures in this survey are rounded to the nearest whole number.
&nbsp;

■ESG/SDGs Survey
Survey Participants: 10,500 men and women aged 20 to 69 nationwide
Survey Method and Period: Online survey: June 24–30, 2020
Questions: Awareness of ESG/SDGs, expected corporate SDGs initiatives, degree of ESG consideration in investment decisions, etc.
Survey Participants
*This survey rounds figures to the nearest whole number.

&nbsp;