PR firms have been sacrificing profits at a rapid rate as they rush
to claim a stake in the PR e-conomy, according to a new survey by
marketing services group Willott Kingston Smith and Associates.
The Marketing Monitor survey showed operating profits per head fell by
nine per cent across the industry - despite a gross income increase of
5.3 per cent over the last quarter.
In spite of increased productivity from internet-related activity,
profits fell short of expectations as firms expanded their on-line
divisions and chased the limited supply of staff qualified to undertake
’PR companies will have to change their remuneration packages for
e-commerce related staff or face wage cuts and massive job losses
somewhere down the line,’ said Amanda Merron, who co-ordinated the
The survey, which examined the top 30 PR companies, showed the profit
decline had been fuelled by increased employment costs of over 2.5 per
cent per head and predicted that the boom will ’bottom out with more
losers than winners’ during an anticipated market correction.
’Pay will have to be performance-related, both on the part of the
individual’s productivity and of the company’s if positions are to be
safeguarded long-term,’ said Merron.
’Linking reward to performance is essential for reaching a balance,’ she