Half of PRCA members expect client budgets to drop, survey says

Almost half of PR professionals believe client budgets will be reduced in the next 12 months following the EU referendum result, according to an exclusive PRWeek/PRCA survey.

Half of PRCA members expect client budgets to drop, the survey found
Half of PRCA members expect client budgets to drop, the survey found
The survey of 120 PRCA members, nearly 85 per cent of whom worked for agencies with the remainder in-house or freelance, found that 39 per cent expected clients budgets to reduce while nine per cent expected them to reduce significantly.

When asked why they thought this, one respondent said: "No change until we have political clarity, though clients will exercise caution." Another told the survey that "uncertainty means clients will be reluctant to invest in big projects".

However, other respondents took a more optimistic stance regarding the referendum result last month, in which 52 per cent of people voted to leave the EU, with one adding: "My clients are all forward-looking and realise that Brexit, while challenging, presents great opportunities."

The survey asked what the industry expected to happen to new business levels in the coming 12 months and, once again, 45 per cent said they expected either a reduction or a significant reduction in business.
Once again, the outlook of clients was cited as one of the major reasons for this.

One respondent said: "I think we can continue to grow but perhaps client caution means we'll grow at a slower rate," while another said: "People will wait to see what happens."

However, despite the gloomy outlook because of the uncertainty caused by Brexit, few expected their staff levels to reduce because of it, with 36 per cent telling the survey they expected not to shed workers, while 40 per cent said they expected team numbers to rise slightly.

"We have a small projected increase in staff numbers that remains in place," one respondent told the survey, while another confidently wrote: "The agency is growing regardless of Brexit."

A small majority, 51 per cent, felt less optimistic about the future of their consultancies post-Brexit, while 39 per cent said they felt the same and 10 per cent said they felt more optimistic.

Asked why they gave this response, one told the survey: "Because a market that is fast, innovative and exciting is more compelling than a slow market."

Those surveyed said they were responding to the change brought on by the referendum result in a variety of ways.

One simply said "pay freeze, recruitment freeze", but another said their organisation was not doing anything about it because "our owner is clueless".

One welcomed the result for their business. They said: "Our strategy suits the outcome of the referendum."

Those from in-house background told the survey what they expected to happen to their PR and comms budgets in the next 12 months.

Half said they expected those budgets to stay the same, while 25 per cent expected them to be reduced and a similar proportion expected them to increase.

Almost 60 per cent of in-house practitioners expected their use of agencies to remain the same, while 32 per cent expected a reduced use of agencies in the coming 12 months.

Finally, respondents were asked for their general views on the referendum result, with several pointing to limits on the free movement of people as a significant problem.

"We have several non-British EU citizens working in the agency and are always open to sourcing the right people internationally. Any increasing isolation of the UK in terms of skills would definitely be detrimental to this country's ongoing pre-eminence in marketing and communications."

However, some thought the industry was guilty of pessimism over Brexit and told it to stop navel-gazing.

They said: "Look for the opportunity – PR can cut through the noise for clients and help to present the story."

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