PR Week’s annual survey of the top 150 UK PR agencies has just been published – with extremely encouraging results.
The research found a striking 11.5% growth in the UK communications business from 2011 to 2012 – at least as far as the top 150 firms indicate, representing a big £878 million slice of the sector.
Even with inflation running higher than the Bank of England would like, this is real terms expansion of around 9%.
The smaller consultancies stand out as doing especially well – with the smallest 30 in the survey experiencing 14% growth (compared with 5% for the biggest 30).
I suspect this stems from clients increasingly turning to smaller agencies because, with investment and results increasingly under the spotlight, the higher levels of energy, commitment and personalised attention the smaller firms deliver have never been more important.
With national economic expansion barely running above zero, such growth figures would be more than respectable for any industry.
But they’re particularly good for one which has been hit hard by previous recessions. It’s all too easy for an FD under pressure to weild his red pen on the marketing budget: it’s much less nerve-wracking than laying off staff.
I believe the encouraging growth is down to two main factors.
Firstly, organisations are increasingly recognising that slashing the marketing budget may be easy to do up-front, but is damaging in the long term. When times are tough, they need to engage their audiences as intelligently and vigorously as possible in order to compete and survive – and to be ready to take full advantage of the up-turn when it follows.
Budget cuts were a knee-jerk reaction when this downturn first hit, just as in the past; but when organisations realised it wasn’t blowing over any time soon, they gradually began to reinvest. This has certainly been our experience with clients, and we saw it from the Coalition Government as much as from the private sector.
Secondly, I suspect there’s been a big shift from costlier forms of marketing – particularly advertising and hospitality – to public relations because it’s recognised for delivering better value and being more effective at building trust.
Clearly the public relations industry needs to repay this faith and investment. It needs to prove it can deliver serious commercial benefits and help drive its clients’ industries to similar levels of growth.
When done well, I’ve no doubt that it achieves exactly that.