At a Council planning meeting a few months ago, several of our members were discussing the rising prospects for the PR business.
One agency CEO boldly declared that firms should be able to capture at least $1 billion of marketing dollars migrating from other disciplines to PR. After an initial stunned silence, the others in the room warmed to this idea. The more we discussed why it was a plausible scenario, the more it made sense. And why not? There is plenty of evidence that the momentum is there.
Revenues increased in 2006
Based on results from more than 60 Council members that participated in our Q4 survey, 2006 was indeed a very good year, with more of the same projected for 2007.
According to the survey, an overwhelming number (87%) of Council members grew their revenue at an average rate of nearly 14%.
Council members are also bullish on 2007, with 95% of our members projecting growth at a rate of 12.5%.
While firms will continue to capitalize on the strong demand for their services, there are acknowledged challenges that must be met to help sustain growth. When we asked what business-related issue will most likely "keep them up at night" in 2007, the top five responses were:
1. Staffing - hiring and development;
2. New business acquisition;
3. Client turnover/client relationships;
4. Profit margins;
5. Demonstrating the value of PR to clients
The fifth-ranked issue on the above list is still the top one in many ways. Demonstrating value is something the industry continues to chip away at, and progress is continually being made. To that end, helping members demonstrate value to clients remains a top Council priority.
In addition to available measurement services, publications, and cases that help bolster the "value" argument, recent quantitative and qualitative examples of PR's value are what we seek, such as:
- Procter & Gamble's groundbreaking measurement/research in 2005 provided evidence that PR works quite well, usually even better and more cost-effectively than other marketing disciplines.
- A May 2006 Association of National Advertisers survey reflected PR's rising stature in the marketing mix. Respondents characterized the value to their business of each of a dozen different marketing disciplines - and PR scored the highest.
- Reputation management. A recent report on the importance of "intangible assets" published by The Institute of Practitioners in Advertising claims that intangibles (reputation, customer loyalty, leadership, etc.) make up 78% of the market value of Fortune 500 companies. Warren Buffett would concur. The Oracle of Omaha
once wrote: "If you lose dollars for the firm by bad decisions, I will be understanding. If you lose reputation for the firm, I will be ruthless."
Here's a challenge. The Council is seeking your help.
1. Can you provide more examples that would fit on this list?
2. Do you have case studies that demonstrate tangible results? (Don't mention media impressions.)
3. Have you been able to shift dollars from other areas into PR?
Please e-mail us at CouncilofPublicRelationsFirms@prfirms.org.
Kathy H. Cripps is the President of the Council of PR Firms.
The Council is dedicated to strengthening the recognition and role of PR firms in corporate strategy, business performance, and social education, serving as an authoritative source of information and expert comment and helping set standards for the PR industry. For more information, call 1-877-PRFIRMS or visit our Web site at www. prfirms.org.
This column is contributed and paid for by the Council of PR Firms.