Marketing budget cuts: a view from the PR industry


By Cameron Clarke, Editor

December 27, 2011 | 3 min read

PR agencies are having to stomach shorter contracts and a continuing pressure on costs because their clients' confidence has been dented by the economic gloom.

That is the view of Francis Ingham, chairman of industry body PRCA which represents around 300 consultancy and 100 in-house team members.

Earlier today The Drum reported on research which indicated that design and digital agencies are facing dwindling budgets and ever more demanding clients because of the uncertain economic outlook.

And it is a similar picture in PR, according to Ingham, who told us "confidence started to wane around the summer".

He said: "The continuing economic uncertainty in Europe and the weakness of the UK recovery is destructive to confidence and longer term planning. Every sector, every part of the country and consultancies and in-house teams alike are affected by this.

"So there's a continuing shift towards project rather than retainer relationships; greater use of freelancers; shorter term contracts; and a continuing pressure on costs.

"Nonetheless let's not talk ourselves into a problem here. PR continues to grow - just at a lesser rate than would be the case if this atmosphere was better. It is eating into other marketing disciplines' budgets; [PR's] value is if anything more respected rather than less when times are tough.

"But essentially, we are not immune to the unhelpful mood music all around us."

Ingham's sentiments are borne out by the experiences of Rich Leigh, an account director at 10 Yetis PR Agency, who said: "In our case, retained clients are, as you'd expect, keeping a very close eye on costs, which has us working with their wider marketing efforts closer than ever.

"It wasn't until some time after the worst of the credit crunch that we noticed a difference in spend - and fortunately, one of our biggest clients (a leading discount site) prospered as a result. We've spoken to people at other agencies and the story is always different - it obviously depends upon the sector your clients operate in as to whether or not they see an immediate financial impact and as such, have to address PR costs.

"One good thing that did come out of the most recent downturn is the fact that prospective clients now come to us with tighter and better defined objectives. This can only be a positive thing for the industry, as we all learn to become a bit more accountable."

Leigh added that there is also an increasing strain on project work.

"Particularly frugal project clients we hoped to have retain us in 2012 have already mentioned that they'll be keeping a tighter hold on their purse strings and may continue to opt for intermittent project work instead.

"Although this wasn't money in the bank at any point, it's still indicative of nervousness and a sign that our own marketing - and perhaps that of the industry - may have to adapt."


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