Service companies find silver lining in recession

NEW YORK: Companies providing PR products and services are reporting an uptick in business due to customers hit by new economic crisis-related needs.

NEW YORK: Companies providing PR products and services are reporting an uptick in business due to customers hit by new economic crisis-related needs, including smaller staffs and a greater demand for ROI.

Vocus, a software provider for PR management, posted record revenues last week for both its fourth quarter and 2008 overall. It earned $20.6 million in revenues for Q4, a 26% increase year-over-year, and total 2008 revenues were $77.5 million, a 33% increase.

The company also provided guidance for the first time, expecting revenues for 2009 to fall between $88.5 million and $89.5 million, a more than $10 million increase from 2008.

Bill Wagner, CMO of Vocus, said that in-house PR teams are the “vast majority” of the company's clients, and as they go through layoffs, some are turning to its services.

“In this economy, people are looking to do more with less,” he said. “You're seeing staff cuts, not just in the agency world, but [also] on the in-house side. When you're looking to cut dollars versus getting the tools and doing it yourself, the economics become really compelling.”

Wagner said senior executives are now handling tasks once the responsibility of junior staff. “You have VPs of marketing now having to deep dive into PR,” he added.

Vocus isn't the only PR services company that is improving sales in the recession, and a number of clients are confirming that boost.

At Canada's ScotiaBank, Frank Switzer, director of public affairs, said although Canadian banks are doing better than some, it hopes to manage costs by working with dna13 to put its global operations into one issues management system.

Dna13 CEO and founder Chris Johnson said the company has experienced a 35% increase in business in its first quarter of 2009 so far.

“The C-suite is looking at PR to manage the brand... because PR is now driving more credibility in the market,” Johnson said. “Those companies that invest in protecting brand reputation... come out better in a bad situation.”

Mark Stubis, VP of communications for KidsPeace, a nonprofit serving the mental health needs of children and teens, once had a communications staff of four and outside consultants – now he works alone.

“As a result, I'm the VP and have had to take on a lot of responsibilities that I didn't have to fulfill before,” Stubis said. “[I need] software that I can use simply and I can get to the editors and reporters simply.”

Stubis enlisted MyEdCals, an editorial calendars and contacts database service. The company grew threefold last year, and last month's sales equaled 50% of Q4 sales, said Eric Hill, president and chief strategy officer of MyMediaInfo, producers of MyEdCals. “People are looking for an alternative... that fits into their budget... [and] something easy to use since our average customer has changed,” he added.

“The message is to spend smart, to focus spending on tools that are going to help [organizations] work smarter,” said Gail Nelson, SVP of marketing at BurrellesLuce. “More PR clients are doing more measurement and... more deeply, making sure they can prove their worth.”

VMS CEO Peter Wengryn said despite a “difficult fourth quarter,” he believes organizations' need for PR monitoring and analytics at a good price will turn things around.

“In the last two or three weeks, people are realizing they don't have the staff to do things on their own,” he said. “They find it more important than ever to know what the marketplace is saying about them.”

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