How will PR cope if the economy gets even worse?

There may not be a double-dip recession, but whatever happens, times are likely to remain tough for a while. Although there are some positive results from the major PR groups, and encouraging new business movement, with the UK Government’s plans to make heavy cuts, trading conditions are not set to improve. PRmoment.com investigtes what this means for PR.

But there is no need to get too despondent. Lloyd Gofton, director of social media agency Liberate Media, is one practitioner who can see light at the end of the tunnel. Gofton points out that recessions are uneven and in some cases marketing spend (PR included) can stay level or even rise to combat market conditions. He continues: “That said, the industry will not enjoy a return to the boom days; we are in for a bumpy ride whatever happens. Agency rationalisation, along with cost-cutting and fresh investment will lead to new forms of cross-sector merger/partnership and the emergence of a different type of agency. New measurable and tangible services should see the sector ride out the worst of any downturn and hopefully come out the other side stronger and more agile.” 

One way to cope is to learn lessons from the 2009 recession. Wendy McAuliffe, director of agency Populate Digital, says that one of these lessons is to ensure that social media knowledge and understanding is shared across campaign teams, and does not rest with one or two individuals. She adds: “Since the 2009 recession, competition for social media and online PR work has heated up, with digital and search agencies coming into the mix, and the PR industry cannot afford to lose its footing again.”

McAuliffe also believes that post-recession, the PR industry has learnt to not rely on heavy monthly retainer fees: “While it was nice to have that security blanket, it was a risky game to play, and in many cases led to campaigns that were lacking in energy and innovation.”

How PR agencies can compete in a difficult market
Tips from Richard Ellis, communications director at PRCA:

“Ensure that you have great lines of communications with your existing clients. Not only do you need to know whether they are happy with the service that you are providing (so you can change things if they’re not), you also need to make sure they know the full range of services you can provide to help their business.

“Make sure that clients have a compelling reason to keep working with you, and this means measuring the impact you are making for their business. A client may feel featuring in Hairdresser Weekly is unimportant, but if they know that last month’s articles generated 20 calls to a dedicated phoneline which resulted in £10,000 of sales, they can go back to the marketing or finance director and tell them that cutting the PR budget is moronic.

“Don’t just accept it’s a tough market. Put in place a business development programme – invigorate old contacts and incentivise your team. Innovate – make sure that you are making the most of the assets and skills you have and find out what new services your clients would appreciate.”

Tips from Jay O’Connor, president of CIPR:

“For consultancies, a broad spread of clients across sectors will fare better, especially those with overseas interests in the developing and growing economies. Balance is key as over-reliance on one sector leaves consultancies vulnerable to sector specific cuts or downturns.

“Practitioners can develop new skills in response to the changing needs of their organisations and clients, working in partnership to anticipate and plan for change and to communicate change to audiences. Now is the time to think creatively to generate new opportunities to innovate, collaborate and to help organisations to listen and assimilate feedback from audiences.

“When times are hard, organisations must continue to communicate. Falling off the radar is not an option”

Soundbites

Are you resigned to a double-dip recession? 
Alan Twigg, managing partner at agency Seventy Seven PR:
“Most definitely ... banks are still not lending, The high street has been booming, but signs are that it is beginning to slow, and cuts are yet to hit ... ouch!”

Jim Hawker, director at agency Threepipe:
“Personally, I think I have become conditioned to the recession – it's almost as if it was always like this. The challenging economy has been a positive in many ways for agencies – we are better run, more financially aware and so are our staff when planning and managing clients. On the other hand, clients have become far more risk averse with their budgets which can stifle creativity and competitor stand out.”

And finally, without being too depressing, the reality is that any recession will see winners and loosers, so you can always have a look around for a new PR job!