Jade Eckardt 09 Aug 2017 // 1:44PM GMT
NEW YORK — Approximately 55% of US PR firms with an annual net revenue of $4m or less are outsourcing digital and social account work, according to a new survey of 800 PR agency CEOs by M&A consultancy the Stevens Group.
The agencies reported a lack of the necessary in-house capabilities required to keep up with client demand for digital, mobile, social media and online marketing services. While 70% of respondents said they are confident their agency is up to date as digital platforms change over the next two years, nearly 30% said they were not.
"PR agencies in the $4m and under revenue range apparently are not keeping up with internal staffing requirements needed to provide clients with end-to-end digital services," said Rich Jachetti, senior partner, Stevens Group. "A much larger percentage of firms in the small-to-medium size range are depending on outside contractors to meet client demands. They haven't as yet committed to building internal staffs that are capable of fulfilling clients' ever-expanding digital marketing needs."
Over 10% of CEOs queried responded to the survey, while one third of all agency CEOs surveyed said their digital needs are met by utilizing outside resources. Yet 30% said they rarely need additional resources beyond their existing in-house staff and their network of freelance digital service providers.
"Most firms claim to have a full suite of digital marketing capabilities. But the central question is which firms are actually staffed with full-time, or even part-time employees, to hand new media marketing assignments, and which firms are mainly outsourcing the work?" said Jachetti.
The survey also found that 30% of agencies employ 10% or less of their staff full-time to focus on digital and social media. Meanwhile, 20% employ 10 to 25% of digital staff full-time; nearly 25% employ 25 to 50% of digital staff full-time; just 10% employ 50 to 75% of digital staff full-time; and just shy of 15% employ 75% of their digital staff full-time. Even so, 53% of CEOs surveyed said they intend to put more time and energy in the next year into recruiting staff with relevant overall digital marketing skills and experience.
"Apparently, the smaller size firms still either don't have the resources, or the sense of urgency needed to beef up for the inexorable and inevitable transition from legacy to digital and social media," said Jachetti.
He added that less than half of CEOs surveyed said only one third of their overall work for clients included digital services.
"The question remains, are PR agencies sitting on the fence to see which way the digital wind is blowing?" said Jachetti. "Or to what extent will agencies that are used to the tried and true traditional scope of PR work venture more aggressively into areas that they're not as confident in or knowledgeable about?"