Not long ago PR Week carried a news piece on the growth of the PR industry. This was based on a survey by the private equity firm Veronis Suhler Stevenson (VSS). VSS's survey says that US PR industry produced revenues of $3.41Bn in 2004, a 12% growth over the $3.05Bn in 2003. The survey went on to say that Technology remained the largest sector, with 27.4% share. Tech PR posting its first growth of any year since 2000, with a 5.8% rise over 2003. Meanwhile the consumer sector posted a hefty 20.7% increase over 2003 now accounting for 25.5% of the PR market. The last, and perhaps most interesting point in the survey, was the view that the PR industry has a relatively bright future, forecasting a 10.1% growth rate in 2005 and an 8.9% growth rate for the next five years, on average.
At first glance this is great to read. It certainly matches what I think most agency heads are experiencing when it comes to market opportunity. In our case we far exceeded these growth levels in our last year, with our US business posting a 23% gain in revenues. These kinds of growth numbers are of course reminiscent of the dot com boom years and we all know what happened after that. While I'm still seeing a great climate for PR in the US I wonder if the growth curve is even. I suspect it is not. I suspect that what we are seeing is some agencies growing rapidly while others are in decline. The net effect being solid industry growth. I also suspect that within sectors we are seeing some very uneven growth.
The good news overall is that our industry is growing though. That growth is sparking new firms to appear, for example I noticed a new Tech firm being launched in Boston last week. The emergence of new firms is also a sign that people are seeing an opportunity to capitalize on a weakness in the market for a certain type of service. The current 'weakness' that seems to be on the lips of the founders of these new firms is 'senior counsel.' I'll be blunt here, I think the real weakness is not senior counsel but value for money. Of course it doesn't sound as appealing to say you are launching a new firm based around value for money but that is where the market is. The growth of the PR market post the dot com boom is different. In the boom it was a simple supply and demand problem. Now we have the same problem BUT we have both an experienced client base and the procurement factor. By procurement factor I mean that for most large clients that agencies not only have to convince marketing communications professionals of their credentials but they also have to persuade procurement departments of their value.
Welcome to the new PR economy.
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5 comments:
Tim - It's nice to see an agency leader that is stating publicly that delivering "PR value" is perhaps a bigger concern than a lack of senior counsel. Meanwhile, I have met with many CEOs and VPMs in tech firms lately. They are not complaining about senior counselors...they are asking me to assess the value they are getting for $10k a month or more on PR.
I am rarely seeing decent value for $10-15k a month. Only a few firms are doing it. I am often telling them that their money may be better spent on BD relationships and more sophisticated sales techniuqes -- and I am a PR guy!
Our industry is in interesting times. PR used to be one of the premier marketing vehicles for any tech firm, with obvious value for everyone to see. While it still is in many cases, we are now in a maturing market where PR is "just another marketing channel," to be proven by the numbers, just like any lead-gen or direct campaign.
For a good wakeup call, all one has to do is talk to a senior level PR counselor that serves P&G, Starbucks, or IBM. Their jobs are quite different from those who serve smaller and newer tech firms, and they are often more savvy at proving the PR investment in tangible business value.
Tim - It's nice to see an agency leader that is stating publicly that delivering "PR value" is perhaps a bigger concern than a lack of senior counsel. Meanwhile, I have met with many CEOs and VPMs in tech firms lately. They are not complaining about senior counselors...they are asking me to assess the value they are getting for $10k a month or more on PR.
I am rarely seeing decent value for $10-15k a month. Only a few firms are doing it. I am often telling them that their money may be better spent on BD relationships and more sophisticated sales techniuqes -- and I am first and foremost a PR counselor.
Our industry is in interesting times. PR used to be one of the premier marketing vehicles for any tech firm, with obvious value for everyone to see. While it still is in many cases, we are now in a maturing market where PR is "just another marketing channel," to be proven by the numbers, peer-to-peer with any lead-gen or direct campaign.
It's clear to me that the industry is re-inventing itself, and I am looking forward to seeing some of the current innovations take hold.
kf
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