It’s been a funny old PR year. Some firms have had a tough time. Some firms have sadly gone bust, but many, possibly the majority, have seen 5-10% growth. And in a decent number of cases, they’ve grown more than that.
So it’s a difficult year to try to sum up, but on the show today, I’m joined by W founder Warren Johnson, and we’re going to talk through the key themes and challenges that 2023 has brought to the PR agency market.
Warren founded W Communications in 2009, and it now has global revenues of £25m and an employee headcount of 200 globally, with 120 in London at W, 40 at Lotus, 25 employees in Singapore and 15 in New York.
W has grown at low double-digit growth rate in 2023.
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2 mins How has 2023 been for W Communications?
“We’ve delivered our EBITA numbers, but it’s felt like a real slog this year.”
“We had a super strong start to the year; the summer was very flat, and we’ve seen a strong recovery in Q4.”
4 mins Ben Smith asks Warren: “Does W have lots of fantastic clients who don’t spend enough money?”
dynamics of the industry have changed radically over the past couple of
years and we’re now at this weird hybrid of low retainers with projects
on top…When the economy starts spluttering, that model collapses a
“Nothing got cancelled. It just got delayed!”
why we’re seeing bankruptcies; this is coming off the back of the
biggest wage inflation we’ve seen in a couple of decades.”
was a massive fight for talent last year. People overpaid for often
mediocre talent… So you’ve got the highest wage bill you’ve looked at,
just as the days of the guaranteed retainer become a thing of the past.”
lot of PR people want to be liked… If your revenue is dropping, the
only way to protect your margin is to reduce headcount. And most people
don’t like to do that.”
10.30 mins Are clients willing to pay for the specialist advice that agencies are employing?
11 mins How is PR’s battle with other marketing services agencies going?
“We’re (PR) is doing great. It feels like there are a lot more social briefs knocking around.”
you can apply an earned media mindset and lens to influencer, to
talent, through to live, through to advertising, you are going to
provide solutions that can often be more cost-effective than what they're (the client) normally getting.”
Have the gradual reduction of retainer accounts and the formation of a
low retainer/project hybrid client relationship made the PR agency
business model less profitable than it used to be?
“We’re looking at a much more dynamic, agile resource-based (talent) system now for agencies.”
14 mins How can PR firms rebuild their margin?
“There is still the same amount of money in the market; you just need a sharper business model.”
opportunity to go beyond PR is vast…we’re increasingly doing earned
advertising campaigns. Clients are interested in a more earned mindset
when it comes to above the line.”
“The last two years have seen a bigger change in the business model of the industry than we have for 20 years.”
16.30 mins What sectors were up in 2023?
“Corporate is great. The CEO always has money to spend.”
18 mins Which sectors were down in 2023?
21 mins One the rise of experiential marketing in 2023: “Coming out of lockdown, people crave live, tangible experiences that you can connect to.”
“All of us should look at the playbook for luxury marketing. It's the gold standard. And that is always experienced based.”
22 mins There have been a lot of M&A deals this year in PR. Is Warren surprised by that? Because it’s a difficult market to try and hit your earn-out, isn't it?
29 mins A conversation about whether: “Digital eyeballs are increasingly worthless” and what that means for PR agency-produced content.
31 mins Has AI meant W is producing more content more efficiently?
33 mins W wants its staff in the office four days a week. Has that made the recruitment process more difficult?
“I like relaxing at home and working in the office. It’s worked for me for 25 years.”
“The idea we have to have one size fits all in every company is madness.”
“(When recruiting) we want people who want to be in the office. It’s a yes or no. If they don’t want to be in the office, it’s a short conversation.”
“The type of person who is excited by high growth typically doesn't want to sit at home in their (jogging) pants for three days a week.”
37 mins Does Warren reckon 2024 will be better than 2023?
“The biggest variable is Trump.”
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