Is the PR industry still in recession?Posted: December 14, 2009
PR people tend to be glass is half full people. This means that when the recession started they tended to put a very brave face on it and were almost in a north African river (denial). Indeed it was only when things had hit the bottom that many PR heads would really talk about how bad it had been. But has the industry really started a recovery? Here are some arguments for and against:
1. Clients have released project dollars that had otherwise been held on to
2. Budgets cuts are no longer taking place and in some cases clients are modestly increasing their spend
3. Staff are starting to get recruited as agencies feel more confident of their revenue streams
4. Staff who are moving are starting to look at agency work rather than in-house. In-house is often considered the safe place to be in a recession (relatively)
5. New business opportunities have improved for agencies and the process has become more normal (number of agencies involved and budgets are back to normal)
1. The release of project dollars is potentially just a year end phenomena. Many clients have calendar fiscal years and so they are now starting to think about their budgets for 2010. If they don’t spend their ’09 budgets they will have a challenge getting $$ in 2010.
2. PR budgets are generally linked to the sales of companies. Given sales are still sluggish, across the board rises in PR spend are unlikely for quite some time.
3. While the new business environment is much improved it is still very tough relative to a non-recessionary environment. Procurement departments have used the recession to sharpen their teeth and get better deals. It will be some time before agencies can get back the concessions made during the recession – if ever
The above would suggest that as an industry we are still in the early stages of the recovery (assuming you are still a glass is half full person). But what it really says to me is that we should not be looking at the recovery as a chance to get back to where we were but rather as a reminder that we need to innovate and come out of the recession offering a better solution to the one we did going in. This is easier said than done and I suspect that many agencies will look at progress in social media and feel that they can tick the box called innovation. I’d urge them to think again. The shift towards digital is important but every part of the industry has embarked on that mission. Real innovation is spotting the less obvious challenges and embracing them along with the obvious. Good luck in that challenge. Oh, and if you figure it out, do let me know!