Sir Martin Sorrell's grim pronouncements on the health of the
marketing services sector last week will no doubt have sent a shiver
down many a PRO's spine. But while the results for WPP's PR interests
represent something of an anti-climax on the previous highs recorded by
the group, it is far too soon to surmise that PR has caught a cold.
The group's PR revenues have, in fact, showed continued growth and the
slowdown is mainly confined to the technology market - Ogilvy's problems
in this area, in particular, have been well documented by PRWeek in the
UK and the US.
The real danger to the PR industry is firmly linked to levels of
confidence, both in terms of innovation and investment. Anecdotal
evidence points to a healthy level of new business out in the
marketplace, with pitches continuing even through the traditional summer
What is clear is that some companies are moving towards hiring on a
project rather than a retainer basis. While some view retainers as a
life-raft at a time of uncertainty, project work can be highly
profitable if an agency has the flexibility to handle an increase in ad
hoc new business.
And therein lies the rub. In a business that counts its people as its
main assets, staffing levels often tend to be cut back as a pre-emptive
measure to keep an agency fighting fit. However, knee-jerk lay-offs will
only serve to undermine the very flexibility required to ensure the
health of the industry, in both the short and long-term.