Budget concerns spur businesses to slow down on RFP decisions

SAN FRANCISCO: As budgets hang in the balance, some decisions on RFPs appear to be on hold until 2009. The delays come at a time when PR agencies are already bracing for leaner budgets and cutbacks.

SAN FRANCISCO: As budgets hang in the balance, some decisions on RFPs appear to be on hold until 2009. The delays come at a time when PR agencies are already bracing for leaner budgets and cutbacks.

A president of a midsize tech agency told PRWeek, “We're seeing reviews are getting pushed back, they're getting delayed, and decisions aren't being made as quickly as they normally would. But for the most part, we haven't seen an instance when an agency went through all the work and then [the RFP] was cancelled.”

The firm was also involved in an RFP that has been delayed indefinitely because the issuer planned to use the proposals to lobby for funds.

“In instances like that, they may not get the money,” the source noted. Decisions will likely happen in January as earnings are announced, the source speculated.

Dan Orsborn, a senior partner and PR practice leader for Select Resources International, echoed similar sentiments. He said the fourth quarter tends to be busy with a rush to decide on new business because clients like to “hit the ground running” in January. However, Orsborn added, this year appeared to moving at a slower pace.

“I'm hearing from a lot of agencies that RFPs are being delayed or they had new business, but the company is now holding off on starting work,” he said. “They're not stopping, but they are holding back.”

He noted, however, that clients working with his company haven't shown signs of slowing down. “People pay for our services,” he explained, “so you get the most serious searches.”

Another head of a midsize firm said the agency was recently involved in an RFP in which the client ultimately made a decision, but took extra caution in finalizing the budget.

“Do I think it would have been quicker in a different economy? Absolutely,” the source noted.

But Jerry Swerling, a PR staffing consultant and PR director at USC Annenberg Strategic Center, said while the economy is having some impact on RFP schedules, it's not a major factor. He was involved in Toshiba America's RFP, which was awarded to Access Communications in early November, and said the process “went like clockwork.”

“What I am seeing is [that] people are saying, ‘If it takes us a little longer to do it, that's OK,'” he said. “They want to be sure to do [the RFP] right.” But clients with events planned in early 2009 are moving ahead, he added.

Yet at a time when the country's economic forecast is increasingly dire, several companies say the RFP delays are just the normal course of business. Bluetooth Special Interest Group, Hewlett-Packard, and Samsung are among companies that began the RFP process this fall, but have yet to select a firm.

HP issued an RFP for a social media agency around October that has yet to be filled; however, the company did just select a firm for analyst relations work. David Shane, VP of corporate external communications, said the timetable was not related to the economy.

Bluetooth SIG, a trade association that promotes wireless technology, issued its RFP on September 5 to a number of firms, and PRWeek previously reported that it planned to make a decision by the end of November. But Mike Foley, executive director for Bluetooth, said the exit of two team members prompted a delay in selecting a firm. Among the two to leave was Kevin Keating, global marketing director.

“With the change [at Bluetooth], we are slowing down a bit,” Foley said. “[The RFP decision] won't be until after the New Year. Also, it isn't a foregone conclusion that there will be a new agency.”

Additionally, a source familiar with the Samsung review said the final decision is believed to be on hold until 2009. The company has not returned calls or e-mails requesting comment on its search.

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