The economy is “stabilizing,” my daily papers tell me. So why is everyone in PR looking so stressed? There is actual new business to be had out there. Client budgets have settled down, maybe not at the levels that agencies would like them to be, but at least they are somewhat predictable.
Having spent a lot of time with agency CEOs over the past several weeks, I am seeing a clear and reasonably positive picture. There's no great, looming crisis waiting to be discovered; what we know is laid bare. But the green shoots of optimism are in themselves anxiety inducing. Do we dare hope that the environment is really improving? And, most importantly, have we truly seen the worst?
No one knows, and that's the problem. Unlike the dot-com downturn, few PR firms have had to cut into their strategic muscle to remain viable. But if this calm period is merely an exhale before further declines, there is a sense that much of the real agony would then begin. Agencies have done as much as they can to protect margins while still producing quality work. But more bad news on the horizon will start to compromise the weaker offerings.
Some agencies are better equipped to face this than others. The firms that are faring the best are those that have the most stable management teams. Often, they did the hard work of realigning leadership well before this period. In troubled times, the weaknesses in management are painfully obvious, and agencies that did not address these problems in the good times are paying now. High-level departures are one sign, languishing senior vacancies is another.
Desperate attempts at diversification of the client base are equally telling. Some firms are driven to move their firms in implausible new directions to shore up deep declines in traditional areas. This can be an investment and reputational risk if it is not a credible market for the firm's core competencies.
Most concerning are the firms that simply go off the grid, where once they had been actively engaged in the activities of the PR community. There is very little false bravado out there right now –it's simply not fashionable to posture immunity to the overall trend.
So those who are actively in the game and working at it all the time with the PR community, including associations, training, trade media, and other forums, are playing a vital role in helping rebuild momentum. The disappearing act is the most worrying sign of all.