Clients are demanding more bang for the same buck

As 2014 advances, there are several questions in the minds of PR professionals. What will growth be like, what do clients expect from us, how to shorten the pitching process, will budgets rise, and how will the economic downturn affect the PR business?

In a bid to answer some of these questions, MSLGROUP has taken out an executive report, ‘Public Relations in India: The Impact of the Economic Downturn and the 2014 Outlook’. The report, conducted by third party surveyor Leadcap, is based on interviews with account directors and in 8 cities: Delhi, Mumbai, Ahmedabad, Pune, Chennai, Bengaluru, Kolkata and Hyderabad.

What will growth be like in 2014?

PR professionals predict an optimistic growth rate for 2014. About 20% of the respondents said industry growth would be in the 15%-20% range in 2014, (from a prediction of 13 percent in 2013). Industry experts generally agree on a growth rate of 12%.

According to MSL, this growth would happen despite clients cutting overall communication budgets due to the downturn. MSL believes this indicates that money is being diverted from other disciplines, such as advertising, to PR.

Which part of the marketing ecosystem has been most affected by the downturn?


Source: MSLGROUP

Deepa Thomas, Head - Corporate Communications, eBay India, explains the reasoning for this: “PR is more strategic. It has more of a focus on building reputations in the long term and it also puts a high importance on brand consideration and influence. Companies are starting to understand and invest into that. As the famous Al Ries book says, ‘the rise of PR, and the fall of advertising’… That said, advertising is not necessarily going away and companies will continue to invest there but perhaps with a more ROI driven approach.”

According to Marzin R Shroff, CEO (Direct Sales) and Vice President, Marketing at Eureka Forbes Ltd., who is quoted in the report says: “In these testing times, the cost effectiveness of PR has become a key reason for companies to focus on it as a solution to their communication needs. PR’s ability to address the desired target audience cost effectively makes it a viable communication option for marketers.”

Clients demanding more bang for the same buck

According to the report, an overwhelming majority (90%) said clients were demanding more for the same fees.

Jaideep Shergill, CEO of MSLGROUP in India, says that: “Clients are demanding a wide range of new services from their agencies. Topping the list is crisis communications and management, followed by training, content, and research and insights.”

Deepa agrees that: “Clients are demanding more from their PR agencies. They want campaigns that deliver business impact, innovation, and brand immersion, best practice sharing by the team and value additions. For example getting two clients to connect or even explore a joint campaign or help on creative, infographics to support a release.”

This will mean PR agencies will be under pressure to acquire the talent to offer more services. Jaideep points out that the survey also shows that talent is a make-or-break issue for the industry, more so at this time than any other.

Jaideep advises: “The industry has no choice but to bite the bullet and make the investments required. Otherwise, it faces relegation to the lowest rungs of the brand-building function. On the positive side, the industry realises this and has aggressively begun introducing the services brands are demanding of them. It has also recognised the need for training and getting the right talent on board.”

Main challenges in the downturn, pitching process a major concern

According to the report, the top challenges for PR due to the downturn are services, talent, pitching and investments to help growth. 55 percent of respondents said their biggest challenge is clients expecting more services from the budget, followed by 48 percent highlighting attracting talent due to low salaries. 45 percent said that clients take too long to appoint agencies after pitching and 43 percent said that an inability to invest in infrastructure and new services is a big problem.

Which of these will persist in 2014?


Source: MSLGROUP

The long pitching process has emerged as a top concern for agencies. According to Deepa agencies must understand that: “Evaluating the right agency partner for the long term is a very critical task and may need to factor in multiple internal stakeholders and a thorough process which is in keeping with the companies’ code of conduct. A good pitch process is likely to take 2-3 months and I think agencies must recognise that and perhaps pitch for projects which would be quick wins in between to keep their teams busy.”

Jaideep believes that the key is to communicate the strategic value you are bringing to the table. “As long we concentrate on low-value work, this won’t happen. You need to demonstrate in the pitch the research that you have done, the insights that has led to and the strategy that you have evolved from those insights. Similarly, you need to demonstrate your expertise in the use of various services – from social media to thought leadership and media relations to public affairs – to achieve the brand objective.”

Written by Paarul Chand