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.
