Arun Sudhaman

Working the angles around media, comms and marketing.

The numbers don’t lie…do they?

with 5 comments

It is results season, which offers us the best window into exactly how hard-hit the marketing communications sector was in 2009.

Unsurprisingly, it hasn’t been pretty reading. But one thing in particular has attracted my attention.

Last year, there was plenty of anecdotal stuff going around the PR industry, about this being the first recession where (a) PR was not the first budget line to be cut by clients and (b) advertising spend was being funnelled into PR.

The Economist even ran an article on the industry, looking at how the rise of digital and perceived cost/value benefit of PR was helping the industry withstand the recession, in comparison to its peers in advertising, media buying and DM.

I have to admit I was always a little unsure about this theory. And now the holding company results are making me wonder whether my doubts were well placed.

I should point out that these doubts were not borne of a lack of faith in PR’s effectiveness. Instead, it was simply the lack of genuine evidence that made me pause.

A look at the holding company results offers some grounds for comparison. Omnicom’s PR revenues dropped by a remarkable 15 per cent, a much bigger plunge than that recorded by its advertising and media unit.

WPP has not reported its full 2009 numbers yet. But its 3Q figures revealed that PR had fallen off by roughly the same amount as its ad unit. Interpublic, with its two out-performing agency brands, will likely buck this trend to a degree. Particularly as its ad shops have endured a particularly tough year.

A better picture will also emerge when Chime and Huntsworth report numbers. Publicis Groupe, meanwhile, refuses to break out its PR earnings – never a good sign.

Maybe I am missing something here, and if I am please let me know, but  there is little in the holding company results so far to demonstrate that PR had a relatively easier ride in 2009 than its peers in other disciplines. And even less to suggest that spend is shifting into PR.

Of course, these are only the holding company results and do not take into account all of the independent agencies out there. But I do think they offer a useful insight, given how much of the global PR market is accounted for by holding group PR brands.

I think it’s fair to accept that PR spend was not slashed as heavily as previous recessions. In certain regions, such as Asia, this is the first time this has happened. Undoubtedly, clients should be aware of the various trends that make PR spend more effective than other budget lines.

But, if the PR industry hopes to be taken seriously, it should probably be supporting its assertions with some statistical evidence. That particular quandary, of course, will be nothing new for people working in PR.

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Written by Arun Sudhaman

February 22, 2010 at 2:44 pm

5 Responses

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  1. […] The numbers don’t lie…do they? […]

  2. The numbers don’t lie but currency impact can make things a tad confusing. I think what’s clear though is that advertising hasn’t suffered more than PR. In large part I think that’s because advertising has done a better job of embracing digital. It remains to be seen if PR will gain greater benefit as it wraps its arms around that shift.

    timdyson

    March 2, 2010 at 11:40 pm

    • To do that, presumably it will need to either start making money out of social media, or try moving further into ‘pure’ digital (like your Project Metal experiment).

      But don’t the currency fluctuations impact all disciplines equally?

      Arun Sudhaman

      March 2, 2010 at 11:49 pm

  3. […] The numbers don’t lie, do they? – exactly how did the PR industry perform in 2009? […]

  4. […] Despite lagging other units, Omnicom’s PR results demonstrate a solid turnaround over 2009, when PR earnings plunged by 11 percent. […]


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