Holmes Report 22 Jul 2012 // 11:00PM GMT
Overall we feel pretty good about the prospects for the global PR industry this year. Although the rate has slackened in the first quarter and first five months of this year in comparison to last year, we're still seeing significant growth. Public relations and public affairs have generally benefited from two significant trends: firstly, the growth in importance of data analytics and therefore research; and secondly, global growth.
In particular, Asia Pacific, Latin America, Africa, the Middle East and Central and Eastern Europe are becoming increasingly important markets, although in many cases public relations and public affairs have not yet become part of marketers' DNA. However, with the growing importance of government – not only as a regulator but also as an investor and stimulator of economic activity – these disciplines are becoming more critical.
Another factor is the growth of new media, which is related to data analytics. The rise of search, video content, display advertising, social networks and last but not least mobile has meant and will mean that public relations and public affairs become more and more important.
The challenges remain the same: finding, incentivising, motivating and keeping the best people. Staff turnover in fast growth markets remains a challenge – but growing and having to find good people is a good problem to have.
Although 2012 has a similar pattern to 2011, growth overall for advertising and marketing services has been a little slower, as reflected in public relations and public affairs. Nonetheless, the need for advertising and marketing services continues to grow – driven by key factors such as globalisation, overcapacity and the shortage of talent, the web, internal communications, the growth of retail, the growth of government, global and local structures, and corporate social responsibility and sustainability.
Given the pressure inside clients for efficiency and effectiveness, the role of procurement and finance continues to expand, sometimes out-distancing advertising and marketing. This is a pity for two reasons: firstly, there is a finite limit to what you can do in reducing cost; whereas – at least until you get to 100% market share – there is no limit to top-line growth. Secondly, the rise of finance and procurement can only lead to further consolidation in our industry – you only have to look at the past few weeks for the evidence of that.
Sir Martin Sorrell is chief executive of WPP.