Tuesday, April 12, 2005

PR Face2Face:
Jeffrey Sharlach, Chairman and CEO, The Jeffrey Group

PR Face2Face is a special series of interviews with the top public relations and publicity professionals in the country, as well as with people involved in the public relations world. The sixth installment is Jeffrey Sharlach, Chairman and CEO of The Jeffrey Group.

Jeffrey Sharlach founded The Jeffrey Group in 1993 after spending 15 years in New York at top international agencies. He was Executive Vice President for International Operations at Rowland Worldwide, Vice President and Client Service Manager for Burson-Marsteller, and Vice President and Worldwide Creative Director for Carl Byoir & Associates. Trained as both a journalist (BSJ, Northwestern) and an attorney (JD, NYU) he has developed and managed communications programs for many multinational clients throughout the Americas, Europe and Asia. In 1995, he was honored as a “Public Relations All-Star” by Inside PR Magazine in the field of international PR, recognizing the success of The Jeffrey Group in Latin America. Jeff currently serves on the national Board of Directors for the Council of Public Relations Firms, the industry trade group.

Jeffrey Sharlach, Chairman and CEO, The Jeffrey Group Posted by Hello

The Jeffrey Group has the reputation as being THE go-to firm for Latin America. How did you end up specializing in such a specific market?

During most of my career, I was at the large agencies in New York – Burson-Marsteller, Hill & Knowlton – and in my last position, I was in charge of international operations for Rowland Worldwide. At the time, Rowland was the fourth largest independent in the world, and I was working with local offices worldwide, and finding acquisition targets for the firm.

In 1992, I took a series of trips down to Latin America for Rowland, to set-up Latin American offices and affiliates. I had put together the proposal for Rowland, suggesting the firm open an office in Miami as a regional Latin America headquarters. At the time, though, Rowland decided not to spend the money and pulled back.

As I talked to more and more people, I thought it was a great idea to do for myself. I moved down to Miami in 1993 and started The Jeffrey Group out of my apartment. It was just the perfect time, with all the multinational corporations moving to Miami to set up Latin America operations. The local PR scene had been tourism and real estate, but no one could really work on a multi-national program with corporate contacts, with the know-how to implement a global program in a foreign country.

The original goal was to be a high-priced, go-to consultant for companies, as well as teaching public relations at the University of Miami’s School of Communication. I was planning to be a high-priced consultant, teach and work on the novel I had been talking about writing for the past 20 years. What happened was that it was just great timing, and the firm grew rapidly. Within the first 60 days, I was already looking for office space. Ninety days later, the first employee was hired. Now, we’re the largest independent agency in Latin America, with 60 full-time employees in four offices. Our largest office is the headquarters in Miami, but our Sao Paulo office is now pretty much the same size as Miami. I stopped teaching after two semesters—which I hope to get back to doing. And, that novel: now, I’ve been talking about sitting down to write it for 32 years instead of 20.

Most multinational corporations concentrate on 3 countries in Latin America – Argentina, Brazil and Mexico – which make up 80-90 percent of the regional revenue.

Right now, there seems to be a multicultural push with the large agencies – reaching out to women, gay community and Hispanics/Latinos. Is there such a thing as Hispanic PR or marketing?

The change in the management with the addition of Jorge Ortega as President – who was the head of the US Hispanic Brand Practice at Burson-Marsteller – will give us the extra push to get ready to add onto our US Hispanic practice.

What we are starting to see is that it is not so important where people are geographically, but what language they are speaking. We are seeing the same TV programs being watched in Mexico City as they are in Los Angeles.

Within Latin America, it’s been impractical for years for a multinational company or brand to manage PR on a country-by-country basis since now so much of the news and information flows across national borders. It would be like a US company hiring one PR agency for New York and another for California; it wouldn’t make sense since so much of the media reaching people is the same.

There is cross-over with the television programming, and we are beginning to see more and more of that with video-on-demand, where the content is available, and it is not going to matter where the viewers are.

We see the US Hispanic market as the next big growth market for The Jeffrey Group, an increasing amount of interactive, broadcast and print media the same in all Spanish-speaking countries.

You have offices in Miami, Buenos Aires, Sao Paulo, Mexico City and arraignments with firms in the Caribbean - Dominican Republic and Puerto Rico - Central America and other South American countries. Your only footprint in the US, though, is Miami. How come you haven’t opened up in the heavy Latino communities in Texas, Arizona or California?

In Latin America, many of the big agencies follow what I would call a “basic affiliate model.” They run around, and get a long list of an agency in each country and sign them on as “exclusive” affiliates. But, that does not work in the secondary markets, since the PR firms are very small - usually one or two individuals - and very specialized. They may be good at financial but not consumer, or vice verse.

Instead we use what we call “Local Service Providers” which are non-exclusive relationships with local agencies that we specifically choose based on their suitability for particular client assignments. In some markets we’ll have four or five contracted LSPs. Collectively, in the smaller markets like Peru or Chile, The Jeffrey Group is the largest purchaser of PR services. We have the influence because we have so many clients we are contracting PR services for in these countries.

We’re working in the US with a model very similar to that we use in Latin America. We do what we can centrally from Miami, and when we need expertise on the ground in a certain market, we contract with local people that have the knowledge and experience we need.

I expect the US Hispanic market to be one of our biggest growth areas. As that expands, we may in fact open other offices in the US as we did in Latin America, when it makes sense in terms of providing our clients with better service. One of my strong beliefs is that you should not try to be all things to all people, but to focus on what you do best. We are one of the best in Latin America public relations, and the natural extension is the US Hispanic marketing communications practice.

With the continued growth of the Spanish-language media in the United States, do you see your agency begin to look more Stateside and use your experience and knowledge in the growing media, or continue to focus on Latin America?

Initially our business was just managing and developing programs in Latin America, but now we have many clients that we serve only in the US for the general or US Hispanic markets. Over the years it’s been our clients that pushed us to expand into US programs. For example, British Airways was initially just Latin America, and then the client contact took on more responsibility, so we extended the British Airways work into Florida and the Southeast. When we won the FedEx business in 2001, they were organized in such a way that Florida was handled along with Latin America.

We’ve had other clients such as Lycos where the US Hispanic market was managed by the same client contacts that handled Latin America.

The Jeffrey Group has grown by client requests. The significant change in the business model was last year, when very traditional PR firm activities (media relations, events, spokesperson training) were hit by the economic cutbacks (particularly in Latin America, which was hit very hard). We started to report into marketing managers and directors instead of PR people on the client side, and these contacts had control over a lot more than just media relations. We started to expand with art directors, designers – changing into a marketing/communications/public relations firm. Instead of just going to clients with a list of things we do, we’re now much more solution-oriented which I think makes us a much more valued partner.

The Jeffrey Group comes up with a whole variety of tools, beyond just the media that offers our clients solution-based campaigns.

In the past years, there has been a heavy emphasis on acquisitions by the conglomerates. Why have you decided to stick it out alone? Do you work with the big firms a lot on projects?

We work very frequently with the big firms, since we focus mainly on Latin America, and now the US Hispanic market. Many of our clients work with other agencies globally, so we work a lot with those firms.

The people with the big agency experience that we bring in, there’s a tremendous focus on short-term profits, a tremendous pressure for profits. We take a long-term view with the client, investing in the client relationship where we might lose money at first, but my philosophy is one of client service, for that long-term relationship and account.

Yes, we are here to make money, but we do not have the pressure of a public company to always meet certain profit targets, every single month, every single quarter. That’s not to say that there isn’t good work being done at the mega-agencies. The big agencies are great training grounds and much of what I learned when I was at big agencies is the knowledge and experience I use every day in my work.

But, that is not to say that we would not look at the right opportunity to be part of a larger agency. It just has to be the right fit - it’s not just a question of dollars and cents.

Your company does not have a blog - what are your views on the blogosphere and pitching blogs? Any short-term or long-term plans for launching a Jeffrey Group blog or blog practice, or has blogging not really caught on in Latin America?

The blogosphere is still just evolving, but we are paying attention to it. We know that the blogs are out there, and keep track of the information out there, but are not spending a lot of time on it right now.

Blogging will be more of a factor moving forward. Right now, it’s just not a big factor in Latin America, because there are not a lot of home computers. But certainly it’s something that all PR people need to pay attention to.

What are some of the proudest moments or campaigns in your career?

The proudest moment was the first year we took in $1M at The Jeffrey Group. For me that meant we had evolved from “Jeff Sharlach consultant” to a real agency. When we were at that point back in the late 90s what when we stared opening other offices, hiring talented people in other countries. It was a great turning point for the agency.

The other thing was when I was elected to the board of the Council of PR Firms. It’s interesting that we both started at about the same time. The Council is a great resource to support people managing agencies, to help them move forward. The Council has done a lot for entrepreneurs, people that are starting agencies, in using their guidelines and benchmark studies.

Right now, there's a bit of discussion on what are the differences between public relations and publicity. Do you envision yourself as more of a PR professional or publicist?

Definitely a PR professional or better still, a communications professional. The days of the publicist getting news out there are really numbered. These days, it’s so fragmented – the media and the audience.

You have to be more strategic on getting the message out there, and what you don’t want out there. And the media is just one avenue for getting the message out.

It’s why the industry is changing into more of a marketing communications profession. It is not just the media, but Websites, blogs, cell phones – there are more avenues for getting out the message than we have ever had before.

Public Relations seems to be under fire right now - both internally and externally - with the different crises of late. What do you think is the biggest issue for PR in 2005 and beyond? Can PR survive the recent spate of bad news?

PR will definitely survive. There are certain ways the processes have been abused – not just VNRs, but the line between PR and editorial process. People are taking a long hard look at the practice of PR and its relationship to journalism.

A lot of the issues that have surfaced have highlighted how content is reaching the public, leading to a more skeptical public. It makes our job more challenging, but shows the importance of good PR.

What do you see as the differences between Latin America and US PR?

What we see in Latin America, from when we first started down there in 1992, is things have evolved tremendously. When we started, the public relations business in Latin America was almost non-existent. When I first traveled to Latin America, people would tell me if you want something in the newspaper, it’s easy - you just pay for it!

As firms like ours and the other big agencies expanded down there – and refused to pay for coverage – it helped the media become more sophisticated, as well as PR.

People like us opened offices, refused to pay journalists, and if the journalists wanted to cover the big companies, they needed to do so without receiving payment. We were giving them access – spokespeople, photos, good releases – and the journalists responded.

We have strict policies, as do other firms. We do not pay for coverage, and that has been adopted by the other local agencies, raising the bar on PR in Latin America.

I have some students that read my blog. So, for their edification, what are you looking for in interns and account coordinators?

Writing skills are the most difficult thing to find. Once people can write, I feel that pretty much everything else we can teach.

If people cannot write a good, compelling sentence, it makes it difficult to teach anything else.

Writing is such an integral part of marketing communications, public relations. We give everyone a writing test on site before we even take them to next stage of the interview process.

Any last words or advice for PR people?

The big thing is to really try to focus on the thinking. These days, anyone with a PC can basically get the names of all the journalists they want, and hit the “send” button. So it’s no longer about execution, since anyone can send out news releases nowadays.

What the real value public relations agencies offer is the strategic thinking. That’s why I think PR professionals do us all a disservice when giving away our thinking, recommendations and best ideas for free as part of the pitch process. It’s not about execution, and PR agencies will not be needed for media relations, if that is all they can do. Counseling and strategic thinking is what we provide, and the real value of public relations and marketing communications in 2005.

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