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Opportunities and Challenges

of Public Relations in Russia

ANDREY BARANNIKOV

CEO of SPN Ogilvy, Chairman of AKOS-ICCO,

Vice President of the Russian Public Relations Association

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SPN Ogilvy at a glance

“A MARKET AND THOUGHT LEADER IN RUSSIA”

• Founded in 1990 – one of the biggest and oldest agencies in Russia and CIS.

• Over 200 employees in 3 offices: Moscow, St Petersburg and Kyiv.

• An Ogilvy PR Worldwide affiliate since 2005.

• Over 4000 large-scale projects for more than 300 Russian and international companies:

• The most internationally awarded PR agency in Russia and CIS:

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The challenges and opportunities of working in Russia

• Vast spaces • Huge gap between the

capitals and the regions • Problems with

infrastructure • Bureaucracy • Corruption • International image leaves

much to be desired • Left-overs of the Soviet

system

• Richest natural resources • Lots of skilled specialists • Good telecommunications

infrastructure • Dynamic economic

development in numerous regions and industries (including IT)

• Unique cultural heritage • Excellent education system

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Working across 1/7 of the land

• 9 time zones

• 83 regions

• 143 million people

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“The parallel worlds”…

…in the sense of the infrastructure and the mentality

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“The Matryoshka Effect”: Russia’s face within and without The challenges and perspectives of building city, regional and country image for attracting tourists and investors and promoting brands

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Russia in the eyes of the rest of the world…

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The Travel & Tourism Competitiveness Report 2013

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Kazan Novosibirsk

Yekaterinburg Vladivostok

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Eurovision 2009: Welcome to Russia!

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The French biathlete called Sochi ‘the ghost city’

“Actually, we would have had to send them home. But, for their benefit, we processed their guns manually, as quickly as we could…”

…and the reply of the Russian customs officials:

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The Russian PR industry

• Very young (exists as an industry since 1990s)

• Still ‘enjoys’ notorious reputation

• Lack of structure and system

• Lack of transparency

• Huge differences between federal and regional agencies in quality and pricing

• Technological gap (especially in Digital & Social Media)

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Raising the industry standards

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The most attractive features of the Russian economy in the eyes of foreign investors

* Foreign Investment Advisory Council’s ‘Russia’s Investment Climate 2012 – Survey of Current and Potential Investors’, 2012

Russia’s domestic market

Telecommunication infrastructure

Labour costs

Local labour skills level

Possibility of increasing my company’s productivity in Russia

Russia’s culture and language 67%

67%

68%

69%

69%

75%

Which stories should we tell about ourselves?

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St. Petersburg International Economic Forum

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RUSSIA CALLING: business speaks for the country

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Which stories should we tell about ourselves?

The Calvert Gallery & Journal - “a guide to creative Russia”

The Ru.branding project - Russian folk art in modern design

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Skolkovo: building trust in Russian innovations (with some help from Finnish celebrities)

• Changing perception of Skolkovo – from a “money pump” to an intellectual leader.

• Strategy: owning the media conversation and DEMONSTRATING REAL RESULTS – making Skolkovo residents and investors speak for themselves.

• Integration into key Russian and international business and innovation events, including the St Petersburg International Economic Forum, Sochi International Investment Forum, Pioneers Festival (Austria) and SLUSH (Finland).

RESULTS for 2012:

• Volume of negative coverage dropped 30%

• Positive changes in the opinion of key TA (residents, international investors etc.)

• For the year 2012, Skolkovo got:

- 57% of all its residents (450 of the 783);

- 64% of all applications to become a Skolkovo resident it has received since 2010 (2500 of 3890);

- 49 contracts with venture foundations for 19.6 billion rubles (approx. 490 million EUR).

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"The Green Button": Forming a culture of energy conservation in Russia (2012)

• With the population of 143 mln, energy consumption is increasing, owing to an improvement in the well-being.

• No economic incentives to preserve energy due to state regulation of tariffs being held over a long period.

• No ‘culture’ of energy conservation, with stereotypes about ‘the wide Russian soul’ and the belief that Russian resources are endless.

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"The Green Button": Forming a culture of energy conservation in Russia (2012)

• 7 training sessions for the media • 8 press tours to energy efficient

objects in the regions (e.g., Sochi Olympic objects)

• 3 press conferences • Initiation of journalist investigations Results: • Over 300 journalists attended

events • Over 7050 media hits featuring

energy efficient projects and behavior

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WINNER OF SABRE AWARDS 2013 “Best campaign implemented in Russia and the CIS”

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MAKING OUR HISTORICAL BACKGROUND WORK TOGETHER

VoltExercise! (2011)

• Organizing the biggest public exercise session since the Soviet times – 10 events in 7 cities!

• 487 media hits, 75% mentioning the brand

• Sales to distributors grew 36%

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VoltExercise! (2011)

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Nationwide blood donation development program (since 2008)

Strategy:

• Building a social institution of blood donation

• Integrated communication campaign of over 2,500 events

Results:

• Over 27,000 media hits since 2008

• Over 2 mln people participated in events

• Over 1 mln people donated blood

• Donor numbers grew by 17% nationwide

• Every 3rd Russian says he/she is ready to donate blood

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Nationwide blood donation development program (since 2008)

• Press tours to transfusion stations (since 2008)

FIGHTING NEGATIVE MEDIA COVERAGE

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Nationwide blood donation development program (since 2008)

• Nationwide music contest “MuzArteria” (2011) • Over 2000 participants • 600 entries • Over 3000 media hits

ENGAGING YOUNG PEOPLE

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Nationwide blood donation development program (since 2008)

ESTABLISHING NEW TRADITIONS

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UNFOLDING AN INTERNAL CSR INITIATIVE INTO A GLOBAL CAMPAIGN

Done since 2009:

• 52 Donor Days. Over 6 000 people donated blood

• Integration in 25 events, including the

All-Russian Youth Forum“Seliger” (2010 – 2012)

• The campaign embraced over 2 000 LG employees in Russia

• 45 celebrity ambassadors involved, incl. musicians, popular TV and radio presenters, Olympic athletes

• 13 media and corporate partners –

setting a trend for a new CSR format in Russia!

• 3 RECORDS OF RUSSIA officially

registered! KOREA HERALD,

most popular Korean newspaper

LG Electronics’ corporate volunteering program (since 2009)

Initial agreement: Organizing donor days twice a year

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• “Train of Innovations and CSR”, April 1-11, 2012

• RECORD OF RUSSIA as the longest blood donation relay – 4,285 km, 8 cities for 10 days!

INTEGRATION INTO NATIONWIDE INITIATIVES

LG Electronics’ corporate volunteering program (since 2009) DONOR DAYS WITH LG AMBASSADORS Donor Day of LG and Moskovsky Komsomolets newspaper with Nikolay Valuev

Donor Day of LG and Eldorado retail network with Alexey Tikhonov and Maria Petrova

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In 2012:

50% agencies said that in over 50% tender companies demanded an agency to provide creative work for free.

In 29% tenders the winner was never announced.

25% tenders were considered by the agencies unprofessional and improperly organized.

AKOS-ICCO 2012 Research by the Committee for Tendering Policy

The Russian PR industry

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Large construction company

• Complicated object • Client insisted on a minimum retainer fee • For 2 months, the agency worked “for

free” • When asked for the payment, the

company started making claims to the agency.

• The company paid the amount half as small as the agency’s estimated budget (not enough even to cover costs)

That’s how it works sometimes…

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