After tough third quarter, PR industry hopes to pr
Charting the future of public relations
Holmes Report
President/Editor-in-Chief

After tough third quarter, PR industry hopes to pr

Arun Sudhaman

If any evidence were needed that the PR industry is by no means out of the woods, it came from WPP's third-quarter results yesterday. The holding group owns the largest set of PR operations of any company, so its results provide a useful industry barometer. And, by declining 1.7 percent, they indicated that any revival since the 2009 recession remains beset by heavy pressure. Coming after Omnicom reported its own slight PR decline in the third-quarter, WPP's results were disappointing news for the industry. Of particular concern, it noted specific weakness in its North American PR operations and forecast a continued slowdown for the remainder of the year. So, four years after the collapse of Lehman Brothers, the PR industry can still find basic quarterly growth elusive, much less the double-digit ride that characterised the years leading up to 2008. Anecdotal evidence, at least in more mature markets, suggests as much - few firms in the UK for example, appear publicly bullish about prospects for 2013. This is not how the recovery was supposed to play out. We have already examined the difficulties facing publicly-held agencies compared to their independent counterparts. Encouraging returns today from Interpublic's stable of high-performing PR agencies, and from MSLGroup, suggest that public ownership, in this case, is not the defining factor. Instead, it is worth noting that WPP has particular exposure to the US public affairs industry, via Burson-Marsteller, via Hill + Knowlton's new overlords at PSI, and via PA specialists such as Quinn Gillespie, Glover Park and polling business Penn Schoen Berland. And that industry, as expected, is suffering in a presidential election year. Indeed, it has found growth difficult to come by because of the political deadlock that has gripped Washington DC for the past two years. Meanwhile, large firms like IPG's Weber Shandwick and GolinHarris, and privately-held Edelman, can point to consumer PR growth as a key driver in the US. Elsewhere, an acquisitive MSLGroup is boosted by strong operations in emerging markets. As developed markets struggle, the importance of high-growth markets, such as China, Russia and Brazil, rises commensurately. In its first-half results for 2012, WPP praised the performance of Cohn & Wolfe, a firm that combines a strong US consumer practice, with substantial progress in Asia this year. That seems to be a good template for global network development in difficult times. Moreover, any negativity should be tempered by two observations. First, our own research indicates that the global PR industry has grown by around eight percent in each of the past two years, which is not exactly the stuff of which nightmares are made. And, second, it hardly feels like a bad time for the public relations discipline. Without getting too Dickensian, it is hard to recall a time of greater opportunity, despite the economic headwinds. WPP's Sir Martin Sorrell has emerged as a well-respected economic prognisticator. The PR industry, though, will be hoping that his predictions this time prove wide of the mark.  
View Style:

Load 3 More
comments powered by Disqus