PR’s Existential Meltdown

Will McInnes, blogging after the Nov. 20 NMK confab, said the world has changed, PR agencies haven’t .

The event, which gave an opportunity for the UK-based PR industry to put its insecurities up for discussion on a very public stage, covered all the different areas that make the world today, and way forward more uncertain for PR: encroachment of digital agencies and advertising on PR’s turf, defining PR’s role in a disintermediated, social media dominated world, and the question of how we measure results.

The wrap on the NMK blog included the following excerpt:

Chair Roger Warner of Squiz and Velocity Partners
kicked off the discussion by remarking that in the four years since
he’d left corporate PR, the landscape of the industry had become almost
unrecognisable. … What exactly has happened?

What’s happened, Will McInnes responded, is disintermediation.
This is quite an issue for PRs, since their business, for some time,
has been ‘mediation’: placing themselves between the client and the
world at large, feeding messages to the established channels. Nowadays,
though, everyone’s got access to their own printing press, and – if
they have the ability and/or the authority – an audience as influential
as those of mainstream journalists. At the same time, companies have
felt the pressure to start exhibiting a little more transparency. Dell,
for example, has moved from a position where it churned out products
from its secret R&D labs and refused to comment on complaints about
customer service to a point where it’s a very different company. The
Dell blog allows members of the public to hear from and talk to senior marketing and product managers, while the Ideastorm site takes suggestions from customers and turns them into product offerings.

Then, in roughly the same time frame – and as I mentioned in one of my posts last week – Sir Martin Sorrell of advertising giant WPP said that “revenues from PR are growing strongly and… ” the  reasoning behind it is to do with social networking and the web.

So, you have head of a large advertising group – WPP, for which PR is presumably only a drop in the revenue bucket – giving props to PR, due to social networking and the Web.

And a raft of agencies having an existential crisis over the same.  What gives?

I thought I might do a reality check on the health of the PR biz by checking out the reported numbers of the publicly held firms.  I quickly realized that this is no small task, and in any event does not tell you much as far as fresh data because YTD quarterly filings of large conglomerates (most agencies that are public are operating units within more diversified marketing and advertising driven entities) do not break out results by line of business.  Oh well.  I now see why stock analysts make so much money, and real reporting is not easy.

Anyway, not one to give up too quickly, I did unearth this relatively recent press release from the Council of Public Relations Firms, which reported the following results of a survey last month:

More than three-quarters of public relations firms in the survey
reported revenues ahead of last year’s 3Q numbers. Additionally, nearly
half (48%) of participating firms claim that bottom lines will likely
best their original 2007 forecasts; 27% of participating firms expect
revenues to come in below their initial forecast…43% responded that they expect budgets to increase [in 2008]

Other findings from the survey included:

• More than half (53%) of survey participants author a blog
• A majority (57%) of firms have or follow best practices related to working with bloggers

Perhaps the glass really is half full, and the current and emerging landscape offers opportunities as well as threats.