Welcome!

Web 2.0 Authors: Maureen O'Gara, Elizabeth White, Roger Strukhoff, Kevin Benedict, David Weinberger

Related Topics: Open Web, Web 2.0

Open Web: Blog Feed Post

Report Shows Big Drop In PR Agency Profitability

The latest Stevens Gould Pincus report found that profitability at PR agencies dropped more than 20% in 2008
By PR Flex
Article Rating:
June 19, 2009 10:45 AM EDT
Reads:
 820

PR on Ulitzer

Yesterday, consulting firm Stevens Gould Pincus released their “2009 Best Practices Benchmarking Report,” which surveyed 106 PR agencies in the U.S. and Canada and found that profitability at PR agencies dropped more than 20% in 2008.

We all know that the economy is bad. No big news there. But we can’t use that excuse for everything. We Americans love to make excuses and place blame on everyone else, right? Don’t make excuses for your business - just make smarter business decisions.

As the country fell deeper into a recession in 2008, agencies expected big brands to drastically cut their PR/marketing budgets and for smaller companies to drop PR activities altogether, and many PR firms made changes accordingly to make sure that they weren’t left in the dust.

For some, that meant dropping smaller clients and picking up more big accounts. For others, that meant cutting back on staffing. For us, that meant re-creating the whole agency model, hence the birth of PR Flex (you can read more about why we started the company on our website)  So where does that leave the little guy in the scheme of things?

Instead of smaller organizations being forced to get rid of their entire PR and marketing activities, why not make it easier for them to continue getting their name out there in an on-demand way, not their retainer PR agency’s way?

In his blog, Harvard Business professor John Quelch writes, “This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”

How would cutting back on PR/marketing affect a company’s brand? Customers want to do business with the companies that look like they are doing well, not the ones holding on for dear life.

So think before you drop PR, just drop the retainer method if it’s not working for you.  The Stevens Gould Pincus study found that the average minimum monthly fee that PR agencies charge clients also fell, by 26%, to $10,332. That’s still a lot of money. We don’t think that you need to pay this amount to get meaningful results.

Read the original blog entry...

Published June 19, 2009 – Reads 820
Copyright © 2009 SYS-CON Media, Inc. — All Rights Reserved.
Syndicated stories and blog feeds, all rights reserved by the author.

More Stories By PR Flex

In a few short years, the media landscape has changed dramatically. Until recently, companies relied on media coverage – either purchased in the form of advertising or earned in the form of public relations – to tell their stories to key audiences and build their brand. Today, businesses and organizations can achieve those same objectives without buying a single ad or being covered in the press. A steady flow of well-written, informational materials distributed regularly to customers, prospects and partners, as well as to the Web itself via news wires, can make a measurable impact on your business.

The next step is a big one – who do you hire to put this strategy in motion? The long-term commitment of a PR firm is often too costly for many small and mid-size businesses. Assembling a team of freelancers can be a hit-or-miss proposition. Hiring an in-house candidate to do it all is even harder. It’s the rare PR and marketing expert who can write, plan and execute PR and marketing strategies based on well-honed best practices – and they don’t come cheap.

Our network of writers and media relations pros are well-versed in this new and exciting communications world. Our transparent pricing model is a refreshing change from the murky retainers of a typical agency. And our flexible structure means you have access to a deep bench of writing and PR pros when – and only when – you need them.