'The most over-supplied PR market in the world': Why we need fewer agencies

Competition is a good thing, but I've come to believe that clients and staff would be better served if there were fewer PR agencies.

'The most over-supplied PR market in the world': Why we need fewer agencies

Anyone who is brave enough to set up their own PR agency in 2020 should be congratulated. But they should also know what they are letting themselves in for.

London has the most over-supplied PR market in the world. There are a few hundred agencies employing more than five people, but there are thousands more registered, trading and competing for work.

Often, smaller PR agencies are lifestyle businesses. You have to start somewhere, but many of them are also not designed to go anywhere.

More often than not, they are run by senior professionals fed up with working for networks where they can achieve no work-life balance.

They tend to be reliant on one legacy client relationship and only a handful go on to employ more than two or three people.

The trend for going-it-alone isn’t going away. The shareholder-led business model of some of the networks is under threat, as they squeeze more margin from fewer, younger staff.

It’s this model that distorts the market and generates some terrible human consequences, including overwork, burn-out and low pay. I also believe that it inhibits diversity by judging individuals only on their economic utility.

The good news for cynics is that advertising is in a much worse state than PR, inhibited as it is by the dwindling costs of content production that once supplied the fat around creative fees.

But PR could also serve clients a lot better. The sheer volume of choice can be overwhelming, and it leads to some negative behaviours including ultra-short, AVE-led project work, aggressive switching and even bullying.

Agency principals respond by tightening up contracts and behaving more ruthlessly, which poisons what should be deep relationships.

We should do more to bring transparency to the market. Some, notably Stephen Waddington, call for higher professional standards, and this would be helpful on the advisory side in public affairs and corporate PR.

But standards are more useful for judging individuals than agencies and it’s easy to see how accountancy-type rules could inhibit creativity, which at its best pushes against convention.

Other promising models like B Corps and the PRCA’s revamped CMS let clients judge if an agency is properly run. And we’re also seeing more activist worker movements like Women in PR and BME PR Pros that seek to change industry dynamics from within.

But these movements on their own can’t do everything. Agency principals like to pretend on here that they are all-powerful, that everyone else is weak and only their agency is bucking the trend. But there are structural problems in our industry than no one individual or leadership team can solve.

We need the market to help us by creating fewer, better, more sustainable PR agencies. If that means a correction, then so be it, but if not then we should find ways to work together to change things.

Mark Lowe is co-founder, Third City

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