That’s the verdict of panellists on a special Top 150 Consultancies episode of The PR Show, which featured Golin London MD and Women in PR president Bibi Hilton, Ketchum London CEO Jo-ann Robertson and W Communications founder Warren Johnson.
The podcast, hosted by PRWeek deputy editor John Harrington, tackled the current trading environment, margins, talent, pitching and a host of other market trends identified in this year’s PRWeek Top 150 Consultancies report.
Robertson summed up 2018 and 2019 in one word – "rollercoaster"; with moments of "extreme highs" tempered by moments of "real difficulty".
"It’s great to see the industry as a whole in growth, because it’s never been harder for everybody – no matter their size or scale – to really drive that growth," she said.
"[Agencies] are really having to prove themselves to every client that they have and every opportunity that comes."
Robertson said that clients have never been more "open-minded" about PR agencies being able to deliver more than traditional comms services.
She added: "There’s also a recognition that our talent base thinks more broadly and laterally than some of our creative industry’s brothers and sisters. As long as we keep earned at the core…[we are able to] surround that with new skills and different talent, which is a path to continued growth."
Golin’s Hilton told The PR Show that the meaning of ‘diversification’ has changed for PR agencies in the past couple of years.
"We went through a phase as an industry where we thought diversification means that we can sell advertising and everything that others in marcomms can sell. We lost sight a bit of our PR roots," she said.
"Now we have moved diversification to mean that it’s about other disciplines and skills, but they are much more intrinsically linked to what we do as a PR business."
An example that Hilton noted was using data and analytics to power better creative communications work, rather than being sold as a separate service offering.
Johnson said that although PR agencies create ads and can compete in this space, they do so "with a PR lens on it".
"The PR view on it is [sometimes] more interesting than the ad agency’s view. We can produce content for about a tenth of the cost of some of the ad agencies. To be able to be agile and creative for big multinational brands is really effective for them,’ he said.
"All of the agencies that are doing well at the moment are able to help charter the quite challenging waters with our clients. If we are able to help them do better in terms of cost savings and not reducing output then we are going to do well."
Later in the podcast, Hilton, Roberston and Johnson reveal how they manage healthy profit margins through "hustle and creativity". They also discuss managing the costly pitching merry-go-round, championing diversity within the workforce and where agencies need to invest in the future.
"I’d certainly predict there will be [a merger or acquisition that is] significant in the next year or so," Johnson said.
"As costs look to increase in terms of cost of pitching [and] acquiring talent, at some point people are going to look to pool together back office costs. I think we’re close to breaking point. If people are looking to sustain margins further, they’re going to have to start finding other ways of cutting costs."
Check out The PR Show episode 1: 'Lazy marketing responsible for the worst influencer campaigns'