VALERIO DE MOLLI
MANAGING PARTNER AND CEO,
THE EUROPEAN HOUSE—AMBROSETTI
The European nations would become a vast common market in which none of the members would find restrictions on individual development, without, however, creating difficulties for the development of others.
It is specifically for the purpose of peace that the League was founded: not for that simulacrum of peace which exists at present, but for a peace based on law and secured by justice, a peace which will allow the peculiarities of national character to develop freely; so that the convenient exchange of the world’s goods may become possible; that every man may be given ease to work in the field in which energies can be employed in the service of the community; for a constant exchange of ideas and knowledge for the benefit of all countries; and for that freedom of trade, that unrestricted exchange of natural and industrial products which, alone, can supply the material needs of nations.
—Giuseppe Mazzini
Before discussing communication and how it is done in Europe, I feel we should dedicate a few lines to some geographical and cultural aspects of Europe, reaching back to its origins, that still affect the socioeconomic structure of the modern age. As everybody knows, Europe is not a single country. Indeed, it is a modest western peninsula of the vast Eurasian continent. The total area is about 10.4 million square kilometers, comprising 6.7 percent of the earth’s land surface. Although quite small geographically, it is a dense patchwork of many different countries. After a long process, today the European territory counts 50 different states containing more than 740 million inhabitants, 10 percent of the world’s population, and around 225 languages. As the southwestern extremity of Eurasia, Europe experiences the biggest variety of climates and terrains on the continent. The result is a diversity that manifests in numerous realms: culture, customs, religion, food, and cuisine. This variety, while keeping Europe from becoming a uniform state, is truly its most valuable trait.
Approaches to communication, therefore, must account for this degree of complexity and heterogeneity to reach its entire target audience. First, however, we need to understand what communication is. Etymology helps us in this regard: the word “communication” derives from the Latin communis agere, meaning “to put in common.” What do we have to put in common? The purpose—the reason to exist—of a company, organization, government. Purpose is defined through a process of listening and dialogue with internal and external stakeholders: colleagues, suppliers, citizens, associations, social partners, institutions, the media, or shareholders. It means sharing with those interested in a company, and investing in it, why it exists and what kind of influence it wants to have on the world. For companies, therefore, developing effective communication approaches becomes increasingly strategic as they create value that improves their chance of establishing relationships, growing market share, and being recognized globally.
Testifying to the importance of communication for companies, in Europe total advertising spending exceeded €105 billion in 2019, an increase of around 20 percent over 2009, when ad spending dipped to €84 billion. From a global perspective, Europe is the third-largest advertising market in the world, with 20.9 percent of total spending, behind the Asia Pacific region with 34.0 percent and the United States with 36.1 percent. The US remains the largest global advertising market, with around $500 billion invested in advertising in 2019 and growth exceeding the global average of spending increases.
Within Europe, per capita ad spending varies between countries. Austria, Switzerland, and Sweden were the top spenders in 2018 (€501, €392, and €339 per capita, respectively), while Italy was only thirteenth at €130. Spending in the United Kingdom exceeded the global average between 2013 and 2018, while Germany and France were growing at rates below the global average in the same period.
From our vantage as the number-one think tank in Italy, number four in the European Union, and among the most respected and independent out of 11,175 think tanks globally (according to the 2020 edition of the University of Pennsylvania’s “Global Go To Think Tank Index Report”), and as a leading strategic management consulting firm, we can observe unprecedented changes in the fields of business and communication, driven by a few megatrends. Beyond increased advertising spending, other exogenous macro-trends in progress might be identified as elements affecting how communicators, including public relations professionals, should approach communication in Europe.
First, technology is one of today’s most relevant drivers of change, affecting the daily lives of businesses and individuals. Technologies particularly disruptive to the communications field include artificial intelligence, robotics, virtual reality and augmented reality, the Internet of Things, and blockchain; all have the potential to open new opportunities in the company–consumer relationship. The collective effect of these innovations is to shorten response times in every field of business, including communications. In fact, digitization has changed the communication relationship between a company and a client, especially in business-to-consumer areas.
Before digitization, the basic equation of communication was based on cycle times that were measured in months along a linear structure: the transmitter used to identify a message that was transmitted to the receiver, who returned feedback to the transmitter months later at the soonest. In this paradigm, communication was mainly based on unidirectional media (print media, radio, and television), with characteristics conventional to mass communication. Today, digitization has changed the rules of engagement, and the cycle has shortened in some cases to microseconds. Moreover, communication is conducted predominantly online and must be designed and created ad hoc for digital channels. The content and the container of the message are no longer two different entities.
Second, since the 2000s, social media has changed the world. As Esteban Ortiz-Ospina wrote in “The Rise of Social Media” for the World Economic Forum’s Our World in Data project in September 2019, “The rapid and vast adoption of these technologies is changing how we find partners, how we access information from the news, and how we organize to demand political change … The increase in social media use over the last decade has come together with a large increase in the amount of time that people spend online.” For instance, in Europe people spend an average of more than four hours per day online, with some countries reaching six hours per day. This rise has had obvious repercussions on companies’ communication approaches.
Observing the dynamics of communication expenditure by channel over the last few years, we can see a progressive shift from traditional channels to online ones. It is interesting to highlight how, starting from 2003, European investments in internet communication have sustained the overall performance of the advertising sector, growing by fifteen-fold and rising from 2 percent of total investment in 2003 to 38 percent in 2019. At the same time, spending on traditional channels such as TV and newspapers has contracted, reducing their percentage of total investment by 7 and 20 percentage points, respectively, between 2003 and 2019. Meanwhile, the share dedicated to radio is stable at around 6 percent of total investment.
Examining growth in the 2016–2018 period shows the online channel to be the only one experiencing a steady increase in communication investments, by 8 percent, 7.5 percent, and 7.8 percent, respectively. A recent analysis by the European Communication Monitor in 2020 reinforces this change in paradigm. Indeed, when asked about their perception of the importance of different communication channels and instruments for addressing stakeholders, gatekeepers, and audiences in 2020 (and comparing them with future expectations for 2023), communication practitioners put social media and social networks at the top (87.6%), followed by online communication via websites, email, and intranets (82.1%), spreading news via online mass media (80.0%), and mobile communication (phone/tablet apps, mobile websites; 75.3%). The biggest winner in the 2020–2023 period will be mobile communication (85.7% of communication experts believe they will be highly important), while the biggest loser will be media relations with print newspapers/magazines (with a drop in importance of 23.7% by 2023).
Third, companies’ communication approaches are also evolving in accord with changes in sociodemographic structure and with people’s preferences and lifestyles. The increase in communication through social media allows companies to reach a younger public, one characterized by specific values, habits, and communication styles. In particular, younger generations such as millennials (born 1981–1996) and Generation Z (born 1997–2012) tend to privilege sharing over possession. They are interested in sharing their purchasing and consumption experiences through social networks, and exert considerable effort in collecting information before making a consumption choice. Eighty percent of millennials in Europe, before buying a product, want to receive detailed information about it (vs. 63% of baby boomers), and 85 percent of them (vs. 67% of baby boomers) show interest in its production process. In addition, consumers are less interested in price and brand when assessing a product, and more interested in the values a company conveys. According to an analysis conducted by the media investment company GroupM on European citizens, only 6.4 percent of consumers consider brand communication activities to be superfluous.
On this topic, the year of the pandemic has been a game changer, disrupting companies’ communication approaches as they have tried to anticipate people’s needs by communicating values such as empathy, being together, courage, and resilience. COVID-19 has brought to the fore the need to bring the human-to-human approach back into focus. Still, during the pandemic, we have seen communication genuinely rooted in emotion, capable of bringing us together in times of great difficulty.
As a fourth element of disruption, the public debate is increasingly focusing on the need to adopt models for sustainable development adhering to the United Nations’ Sustainable Development Goals, further strengthened by the targets of the European Green Deal, as well as showing commitment to Environmental, Social, and Governance criteria, which growing numbers of investors and stakeholders deem essential. For companies and communicators, conveying and translating the idea of sustainability has become one of the most challenging goals. Practitioners should ask themselves: Is it possible to model and measure communication itself along principles of sustainability? How—and how much—can communication reach its own set of sustainable goals? For years, most of its energy has been dedicated to establishing codes of conduct, transparency, and compliance. However, companies do not always monitor compliance to these codes, so they might not be enough. Communication today has a social role, as it influences the public debate and delivers ideas that can shape societal consensus. Hence, European companies have started to discuss a new model that would allow communicators to set goals and key performance indicators to measure the sustainability of communication. Such standards would establish a common language that promotes diversity and inclusion while publicizing its ability to inspire a collective sensibility toward the creation of a more sustainable future.
The extensive use of social media, the integration between channels, the evolution toward two-way communication, the personalization and speed of the messages conveyed, the analysis of the data, the adoption of new technology, and the availability of extremely heterogeneous sources of information have contributed to make information more easily and quickly accessible to everybody. Moreover, in this scenario, information is subject to continuous fact-checking by an increasing number of users, which protects and guarantees the social role of communication in supporting democracy.
The phenomenon of “fake news” has existed since humans started to communicate. However, the internet revolution has amplified it, leading to the emergence of a new digital ecosystem in which misinformation has found fertile ground—and companies, via their external communications, are overexposed to this threat. This is a very delicate issue that might compromise not only companies’ reputations, but also the quality of the information ecosystem. For example, according to a 2018 study in Italy, 8.8 million people have been victims of fake news during the last year, and 3.5 million parents have come across incorrect medical information. Therefore, the issue of misinformation must be addressed and managed by individual companies and national institutions, but above all at the European level. Indeed, since 2015, the European Union has started to understand how important challenging fake news will be to the survival of Western democracies and for the advancement of European integration. For this reason, the European Commission created a specific task force against disinformation (East StratCom) with a dedicated website (https://euvsdisinfo.eu/).
Looking at this phenomenon from the side of companies and communicators reveals that fighting or supporting conspiracy theories and fake news might be the cause of severe ethical challenges to companies and communication professionals. As stated by the 2020 edition of the European Communication Monitor,
“almost half of communication practitioners (46.5%) has experienced several ethical challenges in their day-to-day work during the last 12 months. A smaller portion reports about one issue (18.3%), while 35.1% have not had any issues during that period. The frequency of moral hazards and the overall share of affected communicators has grown within the last years. Ethical challenges differ significantly across Europe: the highest portion of practitioners without any ethical issue can be found in the Nordic countries, Belgium, and Germany, whereas several ethical challenges were most often reported from Croatia, Portugal, and Poland.”
According to the report, the use of digital technologies—social bots, big data analytics, sponsored content, and social media influencers—is rarely regulated by codes of conduct compared to traditional media relations or advertising while it offers many opportunities for communications. For this reason,
“most communication practitioners are challenged by those practices: two out of three (67.6%) state that using bots to generate feedback and followers on social media is extremely or very challenging in terms of ethics. The majority thinks the same for other practices like exploiting audiences’ data by applying big data analyses, paying social media influencers to communicate favorably, motivating employees to spread organizational messages on their private social media accounts. Less problems are identified when it comes to profiling and targeting audiences and editing entries in public wikis like Wikipedia.” (2020 edition of the European Communication Monitor)
When thinking about the new paradigm of communication, another potential threat is related to cyber-attacks, which are becoming more and more frequent especially during 2020, the year of the outbreak of the pandemic emergency. Cyber security is indeed a trending topic in communications across Europe: “nearly two thirds of experts (63.2%) have given attention to the debate about cyber security, and 59% of them see cyber security as relevant for their daily work and more than half (54%) of communication practitioners in Europe have already experienced cyber-attacks on their own organizations” (2020 edition of the European Communication Monitor). With regard to cyber security, hacks of website and/or social media accounts by cyber criminals, damages to the digital infrastructure, and stealing of data or sensitive information about stakeholders are the major causes of threats according to the communication practitioners in Europe, especially for the governmental and public sectors. Despite the strong awareness related to cyber security in the field of communication, in Europe a small amount of investment is oriented to the construction of a resilient communication structure. Indeed,
“nearly half of communication professionals (45.5%) are often involved in handling cyber security crises and a third of them (31.1%) address cyber security in internal communications. But only a quarter of them are involved in employee cyber security education (26.0%) and even less in developing cyber security guidelines and in implementing cyber security technologies (17.7%).” (2020 edition of the European Communication Monitor)
In order to deal with current and upcoming challenges, strong competencies—both communication-specific and general—are considered a key driver of success for outstanding communication within companies:
“Most practitioners (80.9%) believe in the need for constant improvement. Specifically, 68.5% of practitioners thinks that technological competences are crucial, but only 50.6% of them has a highly developed competence in this area. Despite data handling being an important skill for all communicators, a lack of data competencies is particularly striking across all levels, with 50.6% of communicators in Europe under-skilled in this key area. Educational and training efforts to reduce the competence gaps in handling data and technology come mostly from the younger generations of communicators.” (2020 edition of the European Communication Monitor)
At The European House—Ambrosetti, we believe that every company has huge challenges in communication today, which gave rise to our mantra, “Every company is a media company.” Indeed, we are strongly convinced that companies, in their communication approaches, should fulfill an ethical and social duty toward the public as they ensure easy and quick access to information for everybody sustaining the development of democracy.
Given the numerous challenges and opportunities just described, I believe the three most important strategic issues for the development of communication in Europe in the next few years will be:
■building and maintaining trust toward audiences;
■addressing sustainable development and social responsibility; and
■dealing with the speed and volume of information flow.
To conclude, I would like to underline the extreme importance of the communications capability that each European company must develop. Corporate communication approaches indeed contribute to the image of their country of residence and, consequently, of Europe overall. The ability to effectively communicate the strengths and core values of companies and countries in Europe can therefore represent a key element for future growth strategies by strengthening the geopolitical role of Europe within the global milieu. For this reason, I would like to take the opportunity—in this chapter, dedicated to Europe—to address a thought-provoking consideration to all practitioners and communication experts in every European country. The European House—Ambrosetti recommends the creation of a European Steering Committee on Communication, staffed by institutional representatives of the European countries and a multidisciplinary technical task force, with the aim of defining and dealing with a common communication strategy. In this scenario, the Committee would act as a tool to enable global companies to become more aware about the relevance of communication as a tool to improve their perception across Europe. Specifically, this Committee would be responsible for:
■analyzing how individual European countries are perceived at the global level;
■designing and promoting a uniform European image by identifying common values and attributes among European states and cultures;
■enhancing best communication practices of each country within the wider European context; and
■defining common rules and codes of conduct at the European level, especially regarding communication through social networks and internet-related channels.
In sum, a European Steering Committee on Communication would represent a further step toward a more integrated Europe from a communication point of view.
I thank my assistant, Giulia Tomaselli, for having joined me in writing this chapter.
TAKEAWAYS
1.Europe is a patchwork of several countries with different cultures and traditions that affect the communication approaches they have developed.
2.Communication approaches and content need to be multichannel, consistent, and driven by a unified governance.
3.Some global macro-trends are changing the dynamics of communication in Europe, leading to a radical shift in the hierarchy of communication channels in favor of internet and social networks.
4.Millennials and Generation Z in Europe have a growing need for speedier communications and access to information, but also for ethical consumption and concern regarding the values of the companies they patronize.
5.The extensive use of social media, the integration between channels, the evolution toward two-way communication, the personalization and speed of the messages conveyed, the use of technology, and the availability of heterogeneous sources of information have combined to make information more easily and quickly accessible to everybody.
6.Fake news, misinformation, cyber-attacks, and ethical issues are some of the potential threats arising from the new digital paradigm of communication.
7.In the next few years, the development of communication in Europe will be strictly related to the project of building and maintaining trust toward citizens, addressing sustainable development and social responsibility, and dealing with the speed and volume of information flow.
8.Every company is a media company. We need to be aware of this and behave accordingly.