As the economic downturn bites, small and vulnerable PR firms are
beginning to fall by the wayside. This week saw news of the death of
tech firms Evus and Anderson Soames, following last month's folding of
consumer shop Kable.
Evus was an obvious candidate for micro-corporate failure - it had
nailed its colours to a mast that has been rotting for most of the year.
But in all these collapses, there are lessons to be learnt for other
agency heads.
Putting all of one's fee income eggs in too small a client basket is a
dangerous game. For Anderson Soames, having a client list just one name
long - Thomson Financial - meant that when that client axed its PR
spend, the PR firm immediately ceased to be viable. Likewise Evus, which
had positioned itself as the dot.com's choice, has paid the price for
the dot.com crash.
Such extreme cases are rare, but to operate with overly-narrow revenue
streams is perfectly common. If more failures are to be avoided,
agencies need to spread risk more widely.
