Wednesday, July 14, 2010

The PR Industry: An Economic Bellwether? / from MediaPost

Happy days are here again. Or are they?

On June 29, WPP, the global behemoth marketing and communications firm reported a significant uptick in earnings and growth. WPP's Sir Martin Sorrell reported that "in the first quarter, branding and identity, healthcare and specialist communications (including direct, digital and interactive) continues to show relatively stronger growth at over 2.0%, followed by consumer insight at slightly over 2.0% and public relations and public affairs at 2.0%." Congrats, WPP -- that is great news for stakeholders, but what about the rest of the agency world?

Roughly six months ago, as the new decade broke, agencies started the year in a cautiously optimistic mindset. And they had reason to; the recession was over (almost), consumers were shaking out the cobwebs from their wallets, the White House promised to put some sort of chokehold on Wall Street, and firms were hiring again. We saw green shoots.

Today, however, that somewhat rosy picture has failed to materialize for a lot of the PR industry and its clients. It was like a mirage in the Gobi Desert. An illusion.

As PR agencies find themselves at the crossroads of sticking to old-school tactics versus the social-media-as-an-everything Goliath, reinventing their model -- and really, trying to stay relevant to their clients, another major hurdle is facing them -- companies say can no longer afford PR. Seriously.

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