Final Task of Public Relations Consultants Initiation:

A Case of STIKOM InterStudi Campus Jakarta

Diajeng Herika Hermanu¹, Irwansyah²

Student of Master Degree in Communication Science STIKOM InterStudi

Lecturer of Master Degree in Communication Science Universitas Indonesia

Keywords: Public Relations Consultants, In-house Public Relations, Consultant Initiation, PR Business Unit

Abstract: Modern Organization Theory refers to the efforts to reach sustainable development goal, including in

educational institutions which nowadays not only must compete academically but also have to develop their

profit sustainability. InterStudi is the first educational institution in Indonesia which set up a Bachelor

Degree in Public Relations. This study aims to explore the potential of in-house PR in an educational

institution as a learning implementation facility as well as a means to make an additional profit by

establishing a PR business unit. The conceptual model of this study refers to the previous studies which

focus on how to make a sustainable profit (sustainable development goal) in the context of educational

institutions. This study was conducted using a qualitative method through internal interviews with owners,

management, and users. It also suggests comprehension of how in-house PR might function as a public

relations facility as well as a means to make an additional profit from a PR agency, such as through PR

Consultants, Event Consultants, PR Campaigns, or other external PR activities, by involving external users

as the target audience. The result of this study provides a relevant suggestion for in-house PR in an

educational institution to be established independently by optimizing the lecturers’ role as an educator who

will train the students or alumni as internal PR and external PR consultants later on. The limitation of this

study lies on the students who were involved as the PR Consultants; their lack of experience compared to a

PR agency which has professionally existed makes it important to prepare training and upgrade their PR

skills. This study is also limited to the scope of educational institutions where a further research might try to

implement a similar study approach with a focus on the exploration of in-house PR business unit.

1. INTRODUCTION

The industry of Public Relations Consultants

(hereinafter referred to as “PR”) dated back to the

20th century in the United States. The development

of the production goes along with the growing needs

for organizations/ companies to communicate as

well as the increasingly complex relations between

an organization and its stakeholders. Therefore, PR

consultants are in demand to enhance the

organization’s reputation and to improve the

relationships between the organization and the

public (Hinrichsen, 2005).

In Indonesia, the PR industry also grows rapidly.

It is because there has been alteration in PR

functions, whether in for-profit or non-profit

organizations (Putra, 2008). Nowadays, PR

functions are different from what they used to be. In

the past, PR was in a marginal position in a

corporate’s services of management. In its early

development stage in Indonesia, PR merely served

as protocol officers, such as ushers, in a ceremonial

celebration like an organization’s anniversary.

The development of PR consultants in Indonesia

has started since the Republic declared its

independence. However, PR begun to grow rapidly

when multinational corporations set foot in this

country. PR activities that these multinational

corporations do intend to convince the public that

their arrival is to cooperate with Indonesia (Putra,

2008). Meanwhile, Dahlan (1978 in Putra, 2008)

noted that PR developed professionally in the 1990s.

The foundation of many reputable PR agencies such

as Fortune PR, Imogen PR, and Digital, AsiaPR, and

Cohn & Wolfe Indonesia marked this development.

Hermanu, D. and Irwansyah, .

Final Task of Public Relations Consultants Initiation: A Case of STIKOM InterStudi Campus Jakarta.

DOI: 10.5220/0008928600140021

In Proceedings of the 1st International Conference on IT, Communication and Technology for Better Life (ICT4BL 2019), pages 14-21

ISBN: 978-989-758-429-9

PR is often dubbed as “free advertising.” This

could not be farther from the truth since PR does not

do advertising nor is free because PR activities can

be time-consuming and labor-intensive. PR agency

owners might even claim that their business can

make the best capital return among other companies

in communication. The basis of PR activities is

making use of intermediaries to communicate with

the audience and influence them. The intermediaries

might be, among others, industry spokespersons,

stock analysts, investors, trendsetters, industry

analysts, customers, employees, even electronic and

print media (Newlands, 2014).

The PR Society of America stated that PR

consultants work to anticipate, analyze, and interpret

public opinion, attitude, and issues that might have a

good or bad impact. PR is counseling management

in every line of an organization. PR also reviews

takes action, communicates, and continuously

evaluates programs. It aims to reach public

understanding required for the success of an

organization’s goals (Wynne, 2013).

According to Staff (2013), PR activities are

carried out daily in communication/ advertising

agencies, government agencies, and creative

companies. PR consultants need to master the skill

of writing material and present it to the media. They

also have to seek and obtain media coverage when

arranging an event. Today, PR can creatively plan,

manage, execute, and evaluates an event to boost

branding.

Holmes (2012) suggested that in this digital era,

the PR industry demands more extensive skills in the

field of social media. However, Holmes argued that

the industry must return to its roots since PR has to

be able to benefit from all affiliates and means to

help the client's organization manage its relations

with the stakeholders.

PR consultant agency is a business in

communication with good sustainability. However, a

PR agency should be able to provide comprehensive

and sustainable PR services. Some of the services

are crisis management, electronic business strategy,

investor relations analysis, working relations, media

relations, public affairs, branding strategy, product

placement, event organizing, sports marketing,

exhibition, and other attributes which can contribute

to the marketing and sales of the client’s products

and/or service (Cutlip, 2006).

Every industry has different needs and uses

different approaches to find the best business

solutions. The existence of digital technology in the

industrial era nowadays becomes a new challenge

and potential for PR to accommodate it into their

activities.

Therefore, a program to establish a PR agency

will have a lot of potential for STIKOM InterStudi

business project, and it is in line with the latest

curriculum development towards a creative and

digital PR specialization. In fact, the PR agency can,

later on, serve as a facility for the students to hone

their skills and develop their potential.

1.1. Problem Identification

Based on the background as mentioned above, the

problem identification for this study is what are a PR

agency’s roles and interests in boosting STIKOM

InterStudi progress. The purpose of a PR agency

foundation at STIKOM InterStudi is to research how

far PR agency's functions and existence might

promote the development of an educational

institution in facing competition.

1.2. Purpose Statement

According to the definition communication experts

give, PR consultants is a business or agency which

offers media coverage, media planning, marketing,

or a particular communication service for all kinds

of business, including large companies which have

their public relations or communication team

(Parsons, 2003). PR consultants specialize

themselves in improving full public awareness of a

brand, a product, or an image of a company or

person. They determine the best strategy to publicize

a product which will drive traffic to the product and

increase sales. According to the PR Society of

America, most PR consultants are small to medium

enterprises whose activities specialize in catering

companies and industrial needs. On the other hand,

several large PR consultants, such as Edelman,

APCO, and Ruder Finn perform their PR activities

in a much broader scope from research, marketing,

to playing a role in a company’s marketing strategy

entirely and shape public perception. The foundation

of a PR agency at STIKOM InterStudi will take the

form of a PR Lab with the following purposes, first,

to explore how much PR consultants are needed on a

campus; second, to give the students a chance to

hone their skills in communication especially to

develop their potential in public relations; and third,

to be one of STIKOM InterStudi’s business units

which create jobs by empowering the students and

the alumni.

Final Task of Public Relations Consultants Initiation: A Case of STIKOM InterStudi Campus Jakarta

2. LITERATURE REVIEW

2.1. The Need to Have Public Relations at a

Higher Education Level

A professor at Cornell University, J. Paul Leagans,

has once explained the concept of need. It represents

an imbalance, lack of adjustment, or gap between

the present situation and the ideal situation desired

by many (Leagans, 1964). Still, according to

Leagans (1964), a need might arise when there is a

gap between “what you get” and “what you expect.”

The following figure might depict the concept:

Figure 1 A Concept of Need According to Leagans (1964) 

To discover the need for a person or a group,

facts have to be compiled, selected, and analyzed

first before a decision is made. There are four facts

that must be obtained to find out the need of a

person or a group; namely (1) current trends, (2) the

person/group’s opinion/mind, (3) (visible) physical

factors, and (4) public problems (Leagans, 1964).

In determining whether there is a need for a PR

agency on campus, the first thing to do is to carry

out a survey in the community/group members. The

study will provide an initial picture of the level of

need for a PR agency. By using the aforementioned

facts, the questions to ask, among others, are: (1) Is

it necessary to establish a PR agency at STIKOM

InterStudi, (2) What is the business prospect of PR

consultants at STIKOM InterStudi, (3) What are the

roles/benefits of a PR agency for STIKOM

InterStudi’s students and alumni.

2.2 Public Relations

This study refers to an opinion from Cutlip (2009)

who said that PR is a function of management to

identify, determine, and maintain beneficial relations

between an organization (companies) and the public.

Meanwhile, Grunig and Hunt (2009) in Parson

(2013) described PR as communication management

between an organization and the public.

Furthermore, Public Relations Society of America

defined PR as organizational activities that are

associated with specific kind of public relations and

strategically have short term and long term plans in

order to avoid internal or external

miscommunication (Public Relations Society of

America, 2013). Public Relations also has a function

of management to help an organization achieve its

goals, wherein the process it involves research,

planning, implementation, and evaluation as well as

requires technical skills, creativity, flexibility, and

integrity (Parsons, 2003). The above quotations from

the experts support this project of PR Consultations

foundation in educational institutions since it can

generate additional value in terms of communication

management, making an organization connected to

the public, and building the students’ creativity.

PR is now highly needed by various formal

fields, whether they are for-profit or non-profit

organizations. One of them is higher educational

institutions. A study on the importance of PR within

higher educational institutions in Romania claims

that PR can shape a strong identity of the institution.

PR also becomes a very influential attribute in the

process of selecting superior higher educational

institutions from the weak ones. Higher educational

institutions that employ PR as a part of their

management have a strong image. This will

definitely influence the institutions' performance in

terms of external fund collected, a number of

students enroll, possible research contracts, and

potential cooperation with different parties (Stanciu,

2017). According to Kotler and Armstrong, public

relations may even make an impact on public

awareness with a not nearly lower cost than an

advertisement (Kotler and Armstrong, 2006). The

tools for this are a press conference, lobby, product

publicity, and investor relations.

2.3. The Roles of PR Consultants

There are five main roles of PR, according to Kotler

and Armstrong (2015). PR serves as news provider

for media, to publicize new products, and to build

relations at a national and international level. Other

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ICT4BL 2019 - International Conference on IT, Communication and Technology for Better Life

functions of PR are to lobby the government and

policymakers as well as to maintain good

relationships with investors, donor agencies, and

non-governmental organizations.

Generally, PR has a vital role in maintaining

relations with different parties such as stakeholders,

investors, and the public. Referring to this, there are

two targets in the objective of PR, namely external

organizations and internal organizations. Belch and

Belch (2004) said that external audience is

comprised of people who do not have direct linkages

with the organizations. Danandjaja (2011) stated that

the external target of PR activities is people outside

organizations, both who have linkages with the

organizations and who presumably have ones; while

the internal target is comprised of the stakeholders,

investors, suppliers, customers, and local community

members.

PR becomes a part of management to achieve a

company’s goals, and hence there has to be a fund

the company is willing to spend for PR. On the other

hand, the company also has to consider the

effectiveness and efficiency of any potential cost and

so. Consequently, many companies do not employ

PR staff but hire a PR agency instead. A company

has to consider several things before making a

decision on whether to use PR staff (in-house PR) or

hire a PR agency. In-house PR and a PR agency

have their advantages and disadvantages for the

companies (Stuart & Bond, 2013).

Skinner (2004) elaborated how to define a PR

agency from the following few aspects. The number

of clients who an agency deals with reflects the

agency’s size. Employees whose job is working with

clients are called account executive (AE). Their

main task is to give the clients suggestions and PR

plans and to implement them. The kinds of service a

PR agency provides might vary. The service might

include a full-house service or just a small part of it

as promotion or media relations. The fee and

honorarium are parts of the project value that has

been negotiated previously by both parties (Haikara,

2015).

Stuart and Bond (2013) also listed some

advantages of using in-house PR and a PR agency.

The benefits from employing PR staff are (1) quick

access because PR staff could coordinate directly

with stakeholders, (2) data security is guaranteed,

and (3) the team focuses on dealing with the

company’s PR so that targets are more achievable.

However, not all companies have a big budget to

employ PR staff, and thus many of them make use of

PR consultants. The advantages of hiring PR

consultants are (1) the company has many human

resources so that it can optimize the team functions

because they do not depend on a staff member, (2)

new ideas are likely to emerge, and (3) cost

efficiency (Stuart & Bond, 2013).

Haikara (2015) added four more points to the

advantages of using PR consultants. First, cost

efficiency in the company, by using an agency, a

company might optimize the media and methods of

promotion. Second, working relations are more

flexible compared to the ones with staff. Third, an

agency does not count on one or two people when

there is a heavy workload. Last, a company might

get some advice from professionals in different

fields that might not come from the in-house

PR/staff.

2.4. Micro, Small, and Medium

Enterprises

Micro, Small, and Medium Enterprises (MSME) are

businesses in various fields which touch community

interests. Small enterprises are community economic

activities which are low in scale and meet the

standards of net worth, annual sales, and also

ownership as stipulated in the Law (Primana, 2012).

The Law Number 20 the year 2008 article 6

specifies the criteria for micro, small, and medium

enterprises. Micro enterprises are businesses with a

maximum net worth of Rp 50,000,000 excluding

land and premises and maximum annual sales of Rp

300,000,000. Small enterprises are businesses with a

net worth of more than Rp 50,000,000 excluding

land and premises and annual sales between Rp

300,000,000 and Rp 2,500,000,000. Whilst medium

enterprises are businesses with net worth between

Rp 500,000,000 and Rp 10,000,000,000 excluding

land and premises and annual sales between Rp

2,500,000,000 and Rp 50,000,000,000.

Regarding the type of business entity, there are

several types the business owner might use, namely

Limited Liability Company, CV (Commanditaire

Vennootschap), firms, cooperatives, and

foundations. They are different from each other, and

every type has its advantages and disadvantages

(Salvatore, 2001).

Final Task of Public Relations Consultants Initiation: A Case of STIKOM InterStudi Campus Jakarta

2.5. Conceptual Framework

Figure 2 A Model of Conceptual Framework for PR

Consultants in Higher Educational Institutions

A PR consultant business has the sole purpose of

making and maintaining income and profit that will

ensure financial returns to its funders and fair,

competitive compensation to its employees. Clients

want the best service ever, and advertising agencies

need income and profit as high as possible. A PR

consultant business might make a profit by (1)

serving its clients well; (2) controlling costs (salary

and overhead); and (3) charging fair fees and

competitive rates (Croft, 2009)

There are two types of PR consultant business;

one is an independent agency which is owned and

managed by an individual, partnership, or a group of

people and another one is a department, division, or

subsidiary of a national PR business, parent

company, or PR consultants. To make sure that a

business will thrive and profitable, equipped with

competent, professional staff, the foundation of a

company based on the legality is necessary. As an

act of conformity with the Law, a company has to

legalize its business. The legality here means legal

permissions for its activities and all elements

involved in them. Permissions could be interpreted

as a dispensation from prohibition; in that case,

when a business does not have permissions, then its

activities are not considered legal (Primm, 2007).

3. METHODOLOGY

This project applied a qualitative approach method

through interviews and questionnaires with external

and internal parties of InterStudi. The discussions

with private parties were addressed to the

representatives of InterStudi foundation, including

the owners, also the management and the students.

From the interviews, it was known that the

respondents give their full support to the foundation

of a PR Lab so InterStudi will have its own in-house

PR and the students will be able to expand their

experience by interacting directly with local

communities and implementing the knowledge they

have gained in class. Besides internal PR, a PR

agency is also required for the students to have the

first-hand experience of collaborating with

companies and dealing directly with clients. This is

in line with the course of internship for Public

Relations majors at InterStudi so that the foundation

of PR Lab will help the students go straight to work.

A potential business unit becomes the important

reason the owners agreed on the foundation because

it can be a facility for the students to learn how to

manage a business where the whole operations

themselves will be the responsibility of a PR Lab

business coach. The management of the institution

supports this business unit as a form of learning the

knowledge contained in several courses on

entrepreneurship.

In the external data collected from users,

stakeholders, and alumni, there was a finding that

the foundation of PR Lab is predicted to enhance

InterStudi’s potential in terms of education, science,

and quality. Some of the users also expect the fresh

graduates to be equipped with adequate experience

so that they can immediately perform their PR

activities well in the companies which hire them.

Figure 3 Interview Results

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ICT4BL 2019 - International Conference on IT, Communication and Technology for Better Life

The interviews were addressed to 40 students

and alumni and ten users. From the findings, it is

known that both internal and external respondents,

100% agreed on the foundation of PR Lab with jobs

became the main reason. For the questions about

whether PR consultants support every activity of a

company, 84% of respondents said that they help

solve problems. The kinds of business that clients

much need also can be seen from the interview

results, where 52% of respondents voted for

organizing a company’s events. In terms of interest

in the business unit, 70% of respondents strongly

agreed on the program. Overall, the survey findings

above showed how a PR consultancy is much

needed in educational institutions, especially at

STIKOM InterStudi.

4. PROJECT PLANNING

4.1. Description of Project Plan

A business plan is essential in project planning for

the foundation of PR consultants. It is written for a

business foundation program to be well-organized

and carried out in an orderly manner. The core of a

business plan is to compile an executive summary, a

description of the business, a market strategy or

marketing plan, a competitive analysis, a plan for

design and its development, managerial and

operational plans, and, the most important, financial

plan (Hill, 2013)

In a foundation of a PR consultants business

which is related to or a subsidiary of an educational

institution, a significant portion of income flowing

into the PR consultants will be taken in by the

institution. Weber Shandwick Worldwide, the

world’s largest PR agency, earns more than $ 400

million a year from its 2,800 employees. PR

agencies measure their company’s ability from “net

fee” as their income. It is the total earnings a

company makes from its clients through staff costs

per hour added with a mark-up and project

commission. Billings is the total cost charged to a

client by a PR agency, including a staff honorarium

and the costs of material or service the agency has

prepared for the client with an additional mark-up as

the agency commission. Generally, a mark-up of

17.65% can be generated from miscellaneous

expenses other than 15% commissions from the

media where an advertisement is placed. For

example, when an advertisement costs $100, the PR

agency will charge $100 to the client yet pays the

media $85 and keep the $15 as a commission from

the media (Johnson, 2015). When a PR agency

spends $85 for printing costs, to earn the same

amount of real commission, it adds 17.65% into $85,

which is $15, and sends a $100 bill to the client

(Croft, 2009).

4.2. Stages of Planning

A strategic plan, which should be written clearly and

in detail, is an important prerequisite to winning the

competition. A business plan should elaborate the

organized stages of a business’ foundation,

determine the people responsible for the business

and the ones who are involved in it, include the

design of financial conditions, and a plan for

business development towards expansion (Walker,

1982).

According to Roger Kerin (1990), marketing

strategy, market condition, and service

marketing plan should be parts of a plan made

by a PR agency, including product and service

mastery to create a market (market driving) or

follow the market (market-driven).

A business plan, according to Freddy Rangkuti

(2005), is about finding out customers’ profile,

market potential for future growth, current market

share, analysis of research data on customers and

competitors, customers’ characteristics, level of

competition in terms of how strong the existing

competitors are and what their pricing and strategy

are, competitive advantage, and last, future

development plans.

InterStudi PR consultant agency, whose business

specializes in public relations activities, will focus

on publicity management in the form of events. This

kind of activities guarantees the precise control of

any open event a company should do for the

community. This specialization is chosen by

InterStudi PR consultants because of InterStudi PR

graduates major in Creative Public Relations,

particularly events. Target clients include different

kinds of business, such as hotels, banks, food and

beverages companies, telecommunication

companies, and government agencies. By making

use of their competitive advantage, InterStudi PR

consultants will develop their customer base fast.

Having unique skills due to their study of creative

PR, which is supported by competent lecturers will

give InterStudi PR consultants precious insights, no

other PR agencies can offer.

Final Task of Public Relations Consultants Initiation: A Case of STIKOM InterStudi Campus Jakarta

4.2.1 Vision and Mission

The vision of InterStudi PR consultants is "Attention

to Detail, Think outside the Box, Professionalism,

and Creative Result." With the vision, the mission

should be accomplished to increase clients'

satisfaction by paying attention to their needs

thoroughly and carefully, to offer different ideas,

and to deliver a creatively satisfying result.

4.3 Company Profile

InterStudi PR consultant agency is a micro-

enterprise in the field of service. It specializes in

publicity event management and collaborates with

companies that the public considers as the ones often

hold events to shape a right image. InterStudi PR

consultant agency associates with InterStudi, an

educational institution in communication,

particularly its PR Program. It also provides PR

services for other cases, such as CSR, government

relations, and company crisis, whether the cases

need immediate help or long-term management. The

agency ownership is in the founders' hand.

Concerning the need for capital, both for fixed asset

investment and for operational costs in the start-up

period, STIKOM InterStudi makes a financial

contribution to the business. The world of PR is

evolving fast in the reformation era, and technology

demands PR to be not only the mouth for an

organization but also its eyes and ears. This

profession requires skills more than mere

communication. The relations between PR as a

profession and marketing, legal, human resources,

finance, and operation are getting closer. PR should

be responsible for the management, brand, and

advertising and comprehend a wide range of

disciplines from marketing to social media.

Therefore, the market opportunity for PR services is

widely open, including in campaign activities.

4.4 Funding

Regarding working capital, this PR agency will

receive aid, either financial or assets, from STIKOM

InterStudi in line with the submitted proposal and

first-year expenditure prediction. The financial

needs for the agency foundation refer to the business

needs and opinion of an economist, Sadono Sukirno

(2000), who said that funding consists of the initial

fund, which will be spent for business foundation

affairs such as legality fees, and initial capital.

Meanwhile, operational costs consist of fixed cost

and variable cost. Fixed cost covers all expenses

with a constant amount incurred every month for

one period, whilst variable cost is expenses incurred

periodically, and the amount of them might vary

(Utami, 2017).

As for the fixed cost the PR agency should prepare

as a start-up business includes office equipment,

namely desks and chairs as many as two each, a

filing cabinet, a personal computer, two laptops, a

printer, a DSLR camera, a website and paid

subscription to a research tool like LexisNexis, and

employee salary. While what go into variable cost

are marketing, transport, electricity, internet, and

consumption.

4.5 Pricing Strategy

Pricing strategy often becomes the main incentive in

setting the project bid price. The price sent to

customers could be an important tool to

communicate the positioning of a PR consultant

agency positioning (Madura, 1997). Premium

product with premium price will be a package which

can be offered to the customers; it covers certain bid

costs for most customers, primary, and secondary

profit price (Smith, 2012). Initial price is not the

center of primary profit. For example, when a PR

agency gets a project with fees below the bid price,

it can then offer a considerably more profitable

maintenance or support contract for mutual use in

long run. To match the market level, the package

price must be in accordance with the customers’

demand and expectations. If the bid price is too high,

there might be no customers. If the price is too low,

the customers will be misjudged or disrespect the

agency’s offer (Nagle, Hogan, & Zale, 2016).

In this case, there are three approaches to pricing

strategy. First, to set a price based on a number of

factors. This is usually called “cost plus pricing” and

can be effective for producers who must cover the

initial costs. The second is “market based pricing.”

This method sees the landscape of current

competitors then sets a price based on market

expectation. It can be applied in the high-end or low-

end market as a PR agency positioning. Last, the

value of a price, which is a "value-based pricing"

model, where a price is set from how much value the

PR agency can give to the customers (Schindler,

2012).

5. CONCLUSION

The findings from the interview method of this study

showed that the foundation of PR consultant agency

ICT4BL 2019 - International Conference on IT, Communication and Technology for Better Life

at STIKOM InterStudi is necessary, because the

agency, according to the respondents, will help the

clients with their business. Besides that, the

respondents need the agency as a facility for jobs

and training. As for the kind of service offered by

the agency, 52% respondents agreed that the agency

should handle events communication, 18% food

products, 8% political PR, 10% PR in hotel industry,

and 12% for other fields. From the questionnaire, it

was also found that the respondents had an

educational reason to have the agency. From the

academic point of view, the students can gain extra

lessons from their first-hand experience in dealing

with real cases in the world of PR, particularly in

this era where they are required to catch up on all

creativity in the current development. Another

finding showed that for a practical reason a PR

agency can be a facility to increase skills in running

a business unit, which actually has become a

demand for the administrators to master. Therefore,

according to these findings in the survey result, it is

agreed that the existence of a PR agency and its

roles are long-awaited and needed at STIKOM

InterStudi.

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