<b>WEB EXCLUSIVE</b> Agency Business Report: The year ahead

As part of PRWeek's Agency Business Report, we asked leaders of selected firms to identify the three big trends they felt would impact the PR world throughout 2004 and early 2005. Below you will find their answers.

As part of PRWeek's Agency Business Report, we asked leaders of selected firms to identify the three big trends they felt would impact the PR world throughout 2004 and early 2005. Below you will find their answers.

APCO Margery Kraus, president and CEO
  • Increased attention to CSR, in part fueled by corporations trying to regain the trust of consumers through corporate giving and sustainable development programs
  • Continued emphasis on corporate governance, ethics and reputation issues
  • Increased activity related to food/health issues especially in North America and Europe The entire PR industry will benefit from the economic recovery and indeed we are already experiencing a pickup in new-business activity compared to this time last year. Brodeur Andrea Coville, CEO
  • Customer focus: Anticipating and addressing customer needs is driving relationships and long-term brand value
  • Strategic: Changing market factors requires reinvention of the communications function to win in the market
  • Integrated: The blurring lines of communications disciplines requires more integration between marketing efforts Burson-Marsteller Chris Komisarjevsky, president and CEO
  • The US presidential election will have a major impact on the economic agenda in 2004 - 2005. Growth in the US economy, trade, jobs and corporate governance will have a direct impact on the business climate
  • Client's perception of conflicts
  • The growing influence of procurement I think the opportunity lies in being "at the table," when and where important business decisions are made. It is here that we can help anticipate public reaction to corporate actions or assist our clients through communications. Campbell & Co Kevin Kennedy, VP
  • More emphasis on measurable objectives/ROI
  • More emphasis on Hispanic initiatives
  • New products that will continue to replace traditional advertising Carmichael Lynch Spong Doug Spong, managing partner
  • Caution: I'm worried the economic recovery will give new life to the marginal players once again. We don't need a repeat of the dot-bomb years by over-promising and under-delivering to clients from overpaid firms loaded with inexperienced talent
  • I'd like to see our industry rebuild with bright, talented, experienced and driven professionals who give our industry a good name
  • Between the economic recovery and the need for public relations to restore trust, forge relationships, resurrect reputations, resolve issues and manage reputations, the PR industry has never faced a more golden opportunity than right here, right now Darwin would argue these past few years have been very good to the PR industry. Our profession weeded out plenty of weak-minded, poorly skilled people. I keep reading about the PR industry losing so many people these past few years. While that's certainly true, I'm sure the vast majority of these people were not so-called "keepers." The PR industry was in dire need of a cleansing from the inadequate people who had pooled in overpaid and over-titled positions during the go-go '90s when the only qualification for a new hire was a pulse. Chandler Chicco Agency Robert Chandler and Gianfranco Chicco, cofounders
  • The increase in focus on policy, especially as the Medicare and healthcare benefit debates rage on
  • Consumers having a larger voice in how companies spend money, especially in terms of grassroots outreach and educational needs assessment
  • Motivational research into the mind of individuals will become an increasingly bigger and more important part of PR Finally, we believe corporate branding and cultural alignment between brand and corporate goals will surface as an important industry trend in 2004, specifically in the biotech and emerging pharma industries. DeVries Public Relations Madeline de Vries, CEO
  • The steady convergence and blurring of news/information and entertainment, which will challenge us to create new kinds of vehicles to continue to ensure diverse dissemination of credible messages
  • The Presidential election, which will be a dominating news story bringing myriad social and political issues to the forefront of media and consumer attention and requiring us to adjust accordingly
  • The economic recovery, which should lead to increased spending on public relations across all practice areas Dome Communications Doug Dome, president and CEO
  • Measurement: We believe that agencies will continue to be required to innovate new means of measuring the impact of public relations, and that clients will begin requiring traditional measurement services (Nielsen, IRI) to find a way to track and report on PR activities
  • Creativity: Continues to be an underutilized tool in the PR world, but as clients, consumers and media alike expect more, it has become increasingly important. None of our audiences are settling for the same old tactics with the same old spin
  • Convergence: Whether it be PromoPR or other guerilla tactics in concert with traditional media relations and PR programs, PR must become more sales-driven These are really extensions of the same trend: Clients are looking for truly measurable PR solutions that impact their sales impressions. The economic recovery will certainly loosen client purse strings in some cases and bring back dormant accounts in others. It will also change the playing field for small to mid-size agencies that suddenly found themselves competing with huge network shops during the downturn. Edelman Richard Edelman, president and CEO
  • Marketers will continue to challenge the value proposition of advertising
  • Likely to see employees evaluate job opportunities, not just among PR firms, but with other industries. This will lead to salary pressure
  • The importance of demonstrating ROI and program measurement and evaluation will continue to be vital. Smart firms are going to be much further along in demonstrating value at the end of 2004 than we are now Reading any marketing column from the national and trade media or attending any conference, it definitely feels like we're at the beginning of reassessment of traditional advertising-led approach. More companies realize that advertising alone simply isn't credible and effective. PR as an industry needs to provide a more compelling case that it deserves a greater role in building brands. In 2004 there will be more opportunity for public relations to take marketing mindshare from advertising. More than at any time during the past three years, we're likely to see client budgets grow as companies invest in their reputations and brands. Euro RSCG Magnet David Kratz, CEO
  • Integration, to provide strategic, unbiased, and comprehensive marketing execution
  • Innovation, to stay ahead of changing consumer and business practices, and tap into the "Prosumer" mindset that drives product/service growth
  • The right balance of global resources and local, personalized and expert service Growth will come from the expanding power of Hispanic consumers, the exploding recognition of many marketers of the need to communicate to Hispanics in culturally relevant ways, and - importantly - the increasing need not to view the Hispanic market as a monolith, but rather the aggregate of many distinct cultural and generational groups. We see growth from national and international brands, shaking off the effects of a sluggish economy and looking for services that are integrated across marketing disciplines and geographic boundaries. Financial Dynamics Brian Maddox, MD of media relations
  • As 2004 elections shift from policy debates into character issues late in campaigns, crusading regulators and an aggressive judiciary should slip into the background. In consequence, the stalking of corporations, especially financial service fiduciaries, should abate somewhat.
  • The supposed large-scale loss of jobs to India will likely fade as a subject. The weakening of the dollar against the euro will continue to drive our exports and fuel our recovery, papering over many problems and giving Bush an edge over Kerry.
  • For the PR industry, which thrives on flux especially if economically positive, we will see continued industry recovery, probably a few early acquisitions. At full-spectrum firms, the mix will shift to include fewer crisis assignments and more that are oriented towards growth, such as the launch of new companies and the completion of mergers. R&D investment should recover and give us a few new ideas to bandy around, for a change. Fleishman-Hillard Richard Kline, regional president
  • If there are no new threats of terrorism...growth in most every sector, especially traditional key practice areas, continued growth in public affairs and life sciences
  • Technology PR emerging as business-to-business PR versus pure technology
  • Increase in corporate mergers and acquisitions resulting in financial sector growth. GCI Group Bob Feldman, CEO
  • Fact-based knowledge
  • Superior client service
  • Quantifiable communications solutions that align with the business goals of our clients Gibbs & Soell Cos Mallozzi, president and CEO
  • Economic recovery: Expect to see total PR spend increase driven by the need to re-establish trust and credibility in corporate America (as a result of the number of corporate scandals, etc). We also predict that clients will return to reinvesting in customer communications
  • M&A activity rebounds: Expect to see more deals in '04 than in the past couple of years but not necessarily bigger deals. At the same time, expect to see better than average revenue growth among independent, mid-size shops
  • The role of procurement will continue to gain strength Golin/Harris International Ellen Ryan Mardiks, regional managing director, Southeastern region and worldwide director, public affairs
  • Recovery: The economy will improve
  • Opportunity: Questions about advertising's impact will continue to be raised, opening the door for PR to play a more central role in communications
  • Trust: Transparency and accountability will grow, even more, in importance. The challenge will be to play offense, not just defense. In other words, we need to build trust as a strategic asset Hill & Knowlton Paul Taaffe, CEO and chairman
  • Globally, we will continue to see companies pressed on budgets, continued strong growth in pharmaceutical marketing, and to a lesser extent, technology
  • Emerging marketplaces, like China and Latin America, will see continued growth, notwithstanding economic situations
  • In the US, we expect to see increased specialization while cross-disciplined approaches will rise in importance Also, we expect that the profession will be pressed to show ever more accountability, in turn, driving the perceived value of what we do and therefore the need for what we do. And as the economy bounces back, taking care of talent will remain imperative, while retaining talent more difficult. With the economic recovery anticipated in the next 12 to 14 months, more opportunities will open for talented staffs, but it remains unclear that the recovery will translate into dramatic increases in client budgets. Incepta Richard Nichols, CEO
  • Investors expecting better communication after scandals like Enron and Parmalat will drive the financial PR sector
  • Issues like obesity striking at the heart of the food industry - Cadbury's, Kellogs, McDonalds etc - will create a need for sophisticated crisis and consumer PR
  • Consumers becoming more savvy and cynical of above-the-line marketing will need to be influenced more by less obvious below-the-line marketing, such as consumer PR Corporate and consumer trust and integrity are shifting from a long-term commercial objective to an immediate imperative and this can only make PR a more important tool. MS&L Lou Capozzi, CEO and chairman
  • Consolidation will continue
  • Focus on measurement
  • Return to growth - creating retention challenges for leading firms MWW Group Michael Kempner, president and CEO
  • ROI value equation - need to justify ROI on PR dollars
  • Procurement process
  • Staff retention as economy begins to turn and more job opportunities are available Ogilvy PR Marcia Silveman, CEO
  • The pace of acquisitions will continue to increase. While we feel it won't be as active as in the late '90s, we see an upswing of activity around the world
  • Companies continuing to look for unique and creative ways to reach their targeted audience. PR will play a big role in this as it continues to be one of the most cost-effective ways to reach a target. As part of this, clients will continue to rightfully demand a higher level of evaluation for the programs they conduct
  • Movement for agencies to differentiate themselves from each other. Agencies will finally practice what they preach and do a better job at showcasing what makes their firm stand out OutCast Communications Margit Wennmachers and Caryn Marooney, cofounders
  • Clients have more money to spend on PR, and are interested in doing more high dollar projects across the board
  • Start-ups are being more thoroughly vetted by the venture community and PR agencies that pay attention to this can benefit
  • Larger companies seem to be focused on a best-of-breed approach rather than one stop shopping when reviewing agencies Peppercom Steve Cody, managing partner
  • As the economy picks up, you'll see lots more acquisition activity
  • You'll also see more and more agencies launching their own proprietary benchmarking service offerings (as we individually continue to seek the Holy Grail that is ROI)
  • I'm hoping we'll finally begin to see a more diverse workforce entering the industry Porter Novelli Gary Stockman, CEO, Americas and PNI Director
  • As the economy recovers there will be a risk of talent flight, given the changes that so personally impacted people over the past two years. Generally our industry needs to focus on nurturing talent for the future, as the talent shortage is still very much with us
  • The need for agencies to differentiate themselves - both large and small - in a discipline that has increasingly faced commoditization. Much of that has to be around greater agency focus and the particular value each agency brings to the client's needs
  • The growing need for integrated communications solutions that PR can deliver We believe the economic recovery - which many of us are seeing in expanded budgets and new-business opportunities - will add optimism to the business overall, and give people more incentive to create (rather than cut). As a result, we should see innovation returning to our industry. Our industry has undergone fundamental change, however, and our overall health will not be at its peak until we rethink and retool our business model to create more value for our clients and new opportunities for our staffs. Publicis Dialog Debbie Yount, COO NY and Salt Lake City
  • Nutrition and wellness with a heightened emphasis on obesity
  • Corporate governance with a board-mandated emphasis on internal communications
  • International relations with an emphasis on cross-border economic and social issues such as the current debate on job outsourcing Qorvis Mike Petruzzello, CEO
  • An increase in the level of spending by technology companies and organizations as the economy finally begins to turn around
  • Public affairs campaigns that revolve around the Presidential election - both positive and negative
  • Further integration of investor relations and public relations as opposed to IR reporting to the CFO and PR reporting to marketing Ruder Finn Peter Finn, co-CEO
  • Increased priority of public relations at top level of corporations as trust with key stakeholders continues to be a large issue
  • More global thinking as information quickly crosses borders
  • PR consultants getting a seat at the table for strategic discussions and critical decisions Schwartz Communications Steve Schwartz, president
  • Increased interest in PR measurement and evaluation
  • An increased awareness of the need for thoughtful crisis communications plans
  • An increased demand for aligning PR goals with business goals and PR results with business results We are also seeing PR beginning to re-emerge as a platform for companies seeking to gain access to the public financial markets. Schwartz is already seeing a significant upturn in demand as a result of the gradual economic recovery. With the upturn in the economy will come increased PR budgets and an eventual return of the IPO. Text 100 Aedhmar Hynes, CEO
  • A continued emphasis and demand by clients to see strong correlation between the value and effectiveness of their communications activity and their investments
  • The emergence of communications through non-media channels as a more important forum than just traditional media channels
  • As we emerge from the economic downturn, we're seeing the resurgence of a more customer-led approach to communications over the heightened focus on the sales-lead approach we saw as the hallmark of the last three years Waggener Edstrom Suzanne Shaw, SVP
  • Research and measurement
  • Business transparency
  • Changing media environment We recognize that the past few years have been challenging for the PR industry and we are hopeful that the health of the industry as a whole will improve this year. We are already seeing an increase in RFP activity in 2004, which is good. Weber Shandwick Andy Polansky, president
  • Public relations campaigns will, in many cases, become increasingly global in scope as corporations look for more consistency and related efficiencies
  • Agencies and their client counterparts will continue to focus on measurement and will develop new standards and techniques to gauge the effectiveness of campaigns and programs
  • More corporations will turn to holding companies to seek best-of-breed solutions across brands as they seek to consolidate more business with fewer agencies

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