What is going on in the PR industry?
22 January 2014
This month’s PR Week highlights three themes that we all recognise:
Theme 1 – Stressed to kill
The industry is over working many of its employees who are on the way to burn out. Is this really true?
Theme 2 – The rise and rise of social media and 24/7 conversation
John Waples on City PR agencies (arguably the worst for stress levels – see our blog) and how the sector needs to embrace social media. He says ‘it will be fascinating to see how regulators keep pace with the application of social media’ ie with the sort of ‘full-on’, 24/7 engagement with stakeholders that brands are used to. Read the article here.
Mark Borkowski, writing about brand reputation, says ‘crowds (people) are shifting. They demand more, they want to share their views; to participate and have access at all times.’ People want to connect and ‘connection, along with love and well-being, is why we exist and it is what gives us purpose and meaning to our lives.’ He says businesses must turn up everywhere ‘as themselves, understanding how they exist in the real (and virtual) world’ – 24/7 authentic connectivity.
Theme 3 – The pressure of profit margins
‘You’ve got a perfect storm,’ says Matt Neale of Golin Harris. ‘There is fierce competition in the market and salary costs are going higher for the best people; meanwhile procurement is growing in strength so you have to work harder for fees’.
Graham Goodkind, founder of Frank PR, echoes this: ‘business model inefficiencies are a prime culprit. Over-servicing has always been the bane of our industry. Why do clients care if the work has taken ten hours or 100 hours? It should always be about the results.’
The upshot of all of this is that profit margins hover around the 14% mark, according to Kingston Smith’s Esther Cardew. She adds: ‘this points to a fierce battle for market share – those that have not adapted their business models to service higher margin work since 2008 will inevitably get left behind.’
When you join all these themes together you get an interesting picture of the industry –
Fierce competition for talent leading to inflated salaries
Focus from procurement on harsh negotiations for fees charged
Over-servicing by agencies to win and retain business at whatever cost, leading to over-stressed employees
Consumers (clients’ customers) wanting access at all times, and therefore response at all times, & the financial sector about to enter the world of social media
Lower profit margins leading to less wealth to put towards bonuses to reward staff for their hard work, leading to risk of burn out and shareholders (whether for private or public companies) disgruntled with their ROI
The industry continues to grow, however. The over-riding message and a theory that is gathering momentum is this: has the industry we call Public Relations (both in-house professionals and the agency model) passed its sell by date as we know it?
Robert Phillips, in his lecture – Trust and the Fall of the Public Relations Industry, believes so. He says ‘we are entering the final decade of the Public Relations industry as we know it. To many, PR has sought to manage the message TO the people rather than let the people speak for themselves.’ Phillips believes that the smart organisation is the one that changes course now rather than spending the next ten years chasing a redundant model.
His views on Public Leadership replacing Public Relations inside companies and the re-definition, perhaps, of the modern state can be read here.