EDITORIAL: Spread the risk in times like these

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.

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