How the recession is affecting the PR industry

We look at how tightening in spend is affecting the PR industry and the strategies PR people are using to stay ahead of the game. There is no denying that firms have been hit and are likely to experience more troubles ahead, but many consultants continue to be optimistic. Susanna Simpson, founder and managing director of Limelight PR, points out that as a sector, PR is still faring better than most, especially advertising. She says, “this is because services such as crisis and reputation management, and the credibility that comes from editorial coverage, have never been as valuable as in the current climate of decayed consumer and business confidence.”

Some PR people may be finding times tough, but more journalists are struggling. Big drops in advertising spend in the press have led to many trade titles folding. This is bound to impact PR too, as Simpson says, “We now have a smaller market to provide content to and fewer contacts in that market, making it a much more competitive media environment. However, many titles have migrated to and set up online and this increasing range of new media opportunities is one of the reasons we can be confident about PR’s future beyond the recession.”

As well as a change in the way PR professionals approach the media, the way that agencies respond to clients also needs to alter. Sally Bratton, head of Bratton PR, believes in being extremely flexible on price and contract terms, to reflect the pressure that clients are under to cut costs. She says “Rather than stopping the retainer fee altogether, we have been suggesting a significantly reduced monthly PR fee in return for maintaining some level of momentum with target media so key titles and broadcasters don’t forget about the client completely. If they did forget, this would mean months and even years of hard work to raise the company’s profile going to waste.” Another strategy Bratton PR has adopted, following customer requests, is to move away from retainer-fee type contracts, to project-based work, which lead to more manageable costs as well as easier to measure PR results for clients.

Because of the recession, clients are also changing their expectations about what they want their PR to achieve. Richard McCann, director of PR consultancy Friday’s, says that he is delighted that the recession has made would-be clients really focus on metrics, such as return on investment. He says:“Gone are the days when firms could pitch armed with little more than a portfolio of well-known past clients, a group of winning smiles and an eager promise to ‘work hard to raise awareness’”.

McCann says that he has also noticed a growing understanding of the power of business-to-business PR, using social media, and this reminds him of how clients slowly took on board the value of online coverage which may be taken for granted now, but was little interest to many big clients for a surprisingly long time.

When every penny counts, it is no surprise that more businesses are focused on getting as much evaluation as possible of the effectiveness of PR spend. James Davies, managing director of evaluation and research company ImpactWise, believes that the increased need for PR professionals to justify every penny has placed media evaluation more centre stage. He comments: “I do believe the lasting effect of this period will be a greater role for evaluation in all its forms. One form, frowned upon by many, is Advertising Value Equivalents (AVEs). The flaws of AVEs are widely understood both in PR and media evaluation. Yet if anything in the last 12 months they seem to be more popular as a way of communicating to non-PR people the great value of PR.”

It may be hard to predict when the recession will end, but the PR professionals who wish to flourish when it does, need to work out long-term strategies now. Limelight’s Simpson’s advice is to recognise that what worked in the past won’t cut it today: “Clients, because of the problems they are facing, are looking for agencies with ideas and energy. They’re looking for confidence and belief, and we must provide the innovation they will need to meet their business objectives. That’s about more than media management; it’s about providing strategic business consultancy.”

Media Perpsective

Independent PR consultant Jeremy Walters gives his view of the changing role of PR professionals in today’s economic climate:

“The PR industry is undergoing a structural change - it has to in order to adapt to the structural change going on in journalism. Add the economic crisis as an additional factor and I've witnessed more change in PR over the past two years than I did in the previous 20.

“For my clients, PR is now less about being seen in the right magazines but more a case of user-generated PR and it's ability to be well search optimised. In any event, the rapid fragmentation of media online means the old magazines have much less influence than before. My role is now more search optimisation than 'PR'. To sum up, PR is now self-generated and is a search-engine-optimisation (SEO) tool.”

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