Editorial: Even blue chip PR firms rely on staff

This week’s City Insights survey - which separates financial PR companies into the premier league of those who handle FTSE 100 clients and the rest - will come as little surprise to those who follow the sector. Although the message is somewhat crushingly delivered to those further down the scale, the dominance of certain agencies among blue chip clients is well understood.

This week’s City Insights survey - which separates financial PR

companies into the premier league of those who handle FTSE 100 clients

and the rest - will come as little surprise to those who follow the

sector. Although the message is somewhat crushingly delivered to those

further down the scale, the dominance of certain agencies among blue

chip clients is well understood.



What is more surprising - and worrying - is that the survey claims that

clients almost never differentiate between financial PR advisers based

on quality of service. The reputation of agencies rests entirely on the

quality of their client list and the visibility of the deals they

handle. Changes of adviser are said to be prompted usually by a change

in client management rather than by the pursuit of excellence, although

the negative factor still applies - incompetence will get you fired.



The survey paints a depressing picture of a sector in which the juiciest

accounts are carved up between a few top players while the rest struggle

to compete. It also suggests a rather sheep-like mentality among clients

in selecting their advisers. The reality is somewhat different.

Naturally, high profile mergers and acquisitions will continue to

attract the biggest fees because so much is at stake. For the same

reason, such deals will always carry a ’safety first’ element in hiring

PR advice.



But many of the so-called ’second tier’ PR firms are experiencing

vibrant growth. And clients are becoming acutely aware of the need for

quality advice at the highest level - not just in financial PR but

across the board in corporate and public affairs. The ability of

financial PR firms to think ’outside the box’ will therefore become

increasingly important.



Meanwhile the survey rightly concludes that even the top agencies are

vulnerable to losing key individual staff to smaller rivals or

breakaways. Which brings us to Shandwick Consultants, where the shock

waves caused by the loss of five senior players to form the Hogarth

Partnership earlier this year, led the parent group to issue a profits

warning along with its interim results last week.



The reaction of the City to this news emphasised the volatile nature of

people businesses - at least as far as the markets are concerned. But

the group’s strategy of focusing more on global client relationships -

and it has now set up a unit to tackle this - should eventually reduce

its reliance on individual staff. Put bluntly, the bigger the account

and the more widely spread, the more difficult the relationship will be

to dismantle. And the less likely it will be for the client to jump ship

when individuals leave.



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