From the editor-in-chief: lost revenues, big media cuts – how PR must adapt post-COVID-19

It’s the end of July. Many of us have now been working from home continuously for 20 weeks. So how are comms professionals doing after nearly five months of this enduring crisis?

The quick answer is that most people are pretty exhausted. Thankfully many are now taking a break, or are trying to, in the face of fast-changing quarantine restrictions and fears of a second wave.

Speaking to a number of senior PR executives this week, one senses a weary optimism that the industry’s doing ‘OK’ so far. I say ‘OK’ because there are clearly few winners out of the disaster that commenced in early spring.

There’s also a sense that comms, as a discipline, has subtly but palpably changed. As to how, the answers can be found in a changing media landscape and shifting societal perceptions of business and influence.

The first-half results from marketing services groups, now coming through, confirm the impressive resilience of the PR discipline.

Omnicom, the world’s largest marketing services conglomerate, this week revealed a collapse of between 25 and 28 per cent in revenues from disciplines such as advertising, CRM and experiential during the second quarter of 2020. But in the same period Omnicom’s PR earnings were down only half as much – a 13.9 per cent drop.

Despite the significant hit John Saunders, global CEO of Fleishman – Omnicom’s biggest PR network – said he was "thrilled" with his agency's performance in the first half of the year, adding: "If I had known back in March that we would perform this well, I'd have bitten your hand off."

A month or so earlier, WPP boss Mark Read – whose portfolio includes the BCW, Hill+Knowlton and Finsbury Hering Schuppener networks – had expressed admiration for PR’s ability to outperform the other disciplines since March.

And yesterday Interpublic Group, owner of Weber Shandwick, Golin and De Vries, said while its overall revenues were down 12.8 per cent, PR’s decline was in the ‘single digits’.

Some areas of comms have even thrived, particularly healthcare. Omnicom reported a Q2 revenue growth in its healthcare arm of 3.2 per cent – a similar story to WPP and Publicis.

In-house professionals report a hectic spring and summer so far, in which their role within their organisation has been enhanced and appreciated. A typical comment from one comms director: “This crisis has allowed the light to shine more strongly on my team. We have advised on complex positioning issues and getting the right balance of dealing with so many stakeholders.”

And yet comms leaders, both in-house and agency, have also needed to make significant cuts as a result of the crisis and accompanying recession. Many have lost staff, many will still need to do so, or have colleagues on furlough. All of which leaves them with a daunting challenge for the rest of this year.

Crucially, the media environment in which comms professionals operate is also experiencing heavy cuts. This month alone, The Guardian has announced 180 job losses and said it will scrap the longstanding Weekend, The Guide, Review and Travel print supplements from its Saturday edition. Mirror and Express owner Reach has just slashed 550 jobs, while the BBC has revealed a further 70 job losses in its news division.

“The truth is that we’re going to need to be innovative as we come out of the crisis,” the director of one large UK PR consultancy tells me. “The media has contracted; it’s very hard to get coverage. Stunts are pretty much out. Purpose is key, but everyone is doing that. It looks like other marketing services businesses are in worse shape than us, so can we steal their lunch to drive growth?”

Another agency chief executive sees a big opportunity here: “The media are more of a captive audience than ever and their content appetite is growing, whether that is news or views or entertainment. Less media but more output is the key – and that counts for all sectors and all channels.”

The founder of one of the UK’s largest consultancies believes the ‘earned media’ discipline has reached a critical juncture; meaning the PR industry will have to seriously innovate to be effective.

“There was a curve where journalism was underfunded and PR was easier. But we are now in freefall and the impact of conventional consumer-facing, old-media PR activity just doesn’t move the needle,” he says.

“Conversely, the media still has the power to damage brands, so defensive work has never been more valuable.”

This certainly explains why corporate comms and crisis management have been booming of late. He sees the answer for comms professionals focusing on the promotional/marketing side of PR as being able to deal with new patterns of influence via social media.

“PR professionals now have to develop skills to influence social-media content in the same way that they used to attempt to influence journalists. Not easy. It’s the deployment of soft power on people with soft power,” he says.

Most PR bosses I speak to are seeing a huge amount of social-media work on their desks. “Most new business is social-media or digital-content briefs at the moment,” says one.

But there is also growing interest in cracking new codes of influence or behaviour change via technology and data analysis.

Hill+Knowlton this week launched an extension to its behavioural sciences operation with a COVID-19 ‘habit change’ offering.

In terms of the big themes on the client side, comms directors seem to believe the debate around corporate and brand purpose continues to hold the key for the PR profession.

“The big change is that business purpose is now about social purpose in the post-COVID-19 world,” the global head of PR for a big British brand tells me. “And social purpose not being used just in external comms, but something that is lived within businesses, as part of their internal culture."

She adds: “Consumers are buying less, so they now want to buy with brands that are built on good, not those who just use it for comms. Consumers can see through that.”

One former blue-chip comms director, now a consultant, agrees: “Purpose can give a company a firm reputation foundation, so that if you do mess up, you get the benefit of the doubt,” she says. “There is a strong role for the corporate affairs director to make that link between purpose and employee engagement or purpose and reputation – using net promoter scores, for instance. The data and experience/nous is in corporate affairs and it can flush out some surprising findings.”

Whether one works in corporate affairs or in brand PR, the comms discipline has never looked so challenging, so complex, so interesting. The good news is that it is therefore among the professions least likely to be easily replaced by AI. Hopefully the same can be said for journalists.

With that cheery thought I wish you a happy holiday, if you can get away, as I too take a break for a little while. Stay safe.

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