EDITORIAL: PR’s e-vision is a futuristic one

The 2000 PR Week Top 150 reveals an industry poised for change.

Over the last couple of years, the dot.coms growth has had substantial

impact on PR practices, but for the first time in 1999, the influence of

the e-conomy really made itself felt on agency business.

While the number of new clients serviced by the Top 150 companies

continued to rise, fee income growth was three per cent below the 1998

rise of 17 per cent, and fell slightly below the 15 per cent growth

years of the mid-1990s. This is, in part at least, the result of the

increasing willingness of companies to take on loss leaders in their bid

to establish their stake in the e-conomy. This trend is reinforced by

those agencies which have been willing to take share options in dot.com

start ups in lieu of fees.

This week also sees the publication of a report by Willott Kingston

Smith which claims that while marketing services companies are currently

experiencing a boom in business from internet-related marketing, this

expansion is not necessarily boosting profitability. WKS attributes the

nine per cent drop in operating profits among PR firms to the increased

employment costs of bringing requisite skills in-house. This would

certainly seem to be supported by PR Week’s own survey which identified

a willingness for PR agencies to recruit ahead of their needs to ensure

that they were fit for the future.

A large number of agencies also undermined their profits this year by

reinvesting in restructuring and the creation of specialist new media

divisions. In fact, a significant number of companies were willing to

rationalise their own client lists, on the premise that by taking a cut

in their immediate profits and fee income they would be better poised to

take on a new breed of new business.

There is no doubt whatsoever that of all the marketing services, public

relations is best poised to benefit from the development of the dot.com

e-conomy - it is the only marketing discipline that can handhold a

company from design to IPO, and can advise on the crucial management of

reputation via the internet.

Only time will tell however, whether the turbulence of the dot.com

e-conomy will settle and enable these companies to build on the

foundations they have now established. The wisdom or otherwise of this

strategy will be illustrated by next year’s Top 150. If the dot.com

bubble fails to burst, then we will hopefully see a significant rise in

income on the existing base of clients, as fledgling start-ups operating

on a wing and prayer, begin to deliver the goods in terms of real PR

spend with their agencies.