Creston spins out of a difficult US marketPosted: February 26, 2008
If you read the latest PR Week UK front page news that Creston has pulled out of the US you may have come to the conclusion that the US was a dangerous place for PR agencies to be right now and that firms such as ours and Huntsworth must be struggling. I’d like to refer back to our recent AGM update where we talked in positive terms about our business here in America and also refer people to Huntsworth’s update where they suggested they too were trading well.
The story inferred that large agencies are going to find it harder if a recession strikes (shocking news) but fails to make a coherent argument as to why – there only real suggestion is that in tough times people go to smaller less expensive firms. As an agency head that has worked through a recession or two I’ll tell you that in recessions clients get cautious, which means they tend to want to work with firms they know will still be there when a recession ends. Equally, better talent tends to also play it safe and opt for agencies that are likely to survive and that tends to be the bigger firms. So as you can see I’m not really following the logic of this news piece.
My next observation is that even having read the following paragraph several times I’m still not sure what it means: “Agencies under the umb¬rellas of mid-sized conglomerates such as Chime, Next Fifteen Group and Huntsworth, which are reliant on central costing, could now find their budgets under close scrutiny from clients, according to analysts.” What exactly is “central costing?” Do they mean that PR budgets are somehow managed centrally by big customers across the globe? If so I suggest they interview a few clients and they’ll soon learn that the vast majority of budgets are set market by market.
My last point is that I’m rather surprised PR Week didn’t contact the midsized holding companies they referred to for a perspective on this news. Perhaps if they had the Creston spin would have been exposed. My hat goes off to Creston though. Let’s face it, they did manage to deflect some pretty bad news and suggest that they were now better placed than others to deal with the US. I just wonder who really bought that news.