Radical Pixels

Cyrus Afzali asked:


Most independent PR practitioners and, even leaders of larger, established agencies, will tell you with a fair degree of certainty that we’re in the midst of an economic slowdown. While that affects most every business, it presents an even-greater challenge for PR professionals.

As anyone who went through the dot-com boom and its the subsequent bust will tell you, PR is especially vulnerable to wild expansions and contractions. Companies often spend money wildly when times are good and cut back substantially when times get tough. While it’s understandable in some ways that a company would rather cut its PR agency budgets in tough times, it’s often a short-sighted approach.

One of the things that often goes unsaid regarding PR is it offers a superior value proposition not seen with many other forms of marketing. For starters, unlike advertising, PR generally doesn’t require expensive creative budgets to produce its final product. Likewise, there’s no budget needed to buy space since, in most cases, the media secured by public relations is free. There are certain “pay to play” opportunities, especially when it comes to special sections in trade publications, but they’re relatively rare and often don’t present a value opportunity.

One of the reasons that PR doesn’t get the respect it deserves in many ways is because of how it’s sold, as I’ve pointed out on several occasions. In a downturn, one of the best ways to sell PR is to point out that it’s one of the few marketing expenditures that can actually generate more in added revenues than the cost of a campaign. Obviously, this isn’t certain to happen with every client, but even in the case where direct sales don’t rise immediately, there’s often a direct correlation between the fruits of a PR campaign and sales inquiries. I repeatedly tell clients that delivering bona fide opportunities is the best that can realistically be expected of a campaign. Once those come in, it’s up to a client’s sales staff to close the deal.

Just as PR firms do well to emphasize their value proposition to current and prospective clients, they would also do well to include their clients’ value metrics in their PR programs. So, for example, if you’re trying to better position a technology company that primarily serves businesses, when at all possible, point out how the tech company’s products or services have either saved their clients money or increased efficiency, which over the long run does the same thing.

We also often forget that in a down economy, much of the attention is drawn by the large organizations, because they often will have more immediate struggles than small or mid-sized businesses – at least in terms of layoffs and revenue/profit reductions. While small businesses often suffer too, they are also often responsible for the few bright growth spots. This fact gives them a unique opportunity to capitalize on their position and makes them perfectly positioned to benefit from a well-planned and executed public relations program. Even in sectors that are often host to a broad array of problems during a downturn, such as financial services, they will be companies that thrive, including debt-consolidation providers and small, regional banks with lower cost structures, among others.

One of the reasons that PR is more cyclical than many other industries is we drive hard for the low-hanging fruit during the boom times. Most people would probably now admit it wasn’t smart to stack client rosters with dot-com businesses that had questionable business models during the 2000-2001 boom, but they did it anyway – largely because the money was good and the euphoria was contagious. A better strategy is one that emphasizes smart growth, where an agency or consultant is not trying to be all things to all people, but rather a premier service provider within sectors where it has a solid reputation. Obviously, this doesn’t apply to the multinational firms that are part of the ad conglomerates or the few very large independent firms, but most people who work in PR don’t find themselves employed at one of those firms and won’t benefit from the fact that they may experience a relative calm, or at least a less severe downturn, during tough economic times.

I don’t pretend to be an economist, although I do benefit from an understanding of financial issues that comes with covering them for nine years as a journalist. My personal feeling is that we’re in for a bit of tough-and-tumble when it comes to the economy through at least the middle of 2009. Given the fact that the “easy money” isn’t likely to be flowing through PR firm coffers anytime soon, it’s imperative that industry leaders focus on our value proposition and deliver it successfully. In a perfect world, the industry will end up with a client roster that’s better suited to withstand downturns.