The trends within the Indian PR Industry
26th September 2013
The Public Relations Consultants Association of India (PRCAI), has recently released the ‘PRCAI Trends Report 2013’.
The PRCAI is a trade association that represents India’s public relations consultancies, and they have conducted this report addressing the issues surrounding the PR industry in India today. They spoke to around 54 PR executives, including CEO’s and Chairman’s, from all over the country.
The graphs below show some of the findings:
1. What is the business outlook for the Indian PR Industry?
2. What year on year revenue growth do you expect for PR firms for the year ending 2013/13?
3. What do you expect to happen to the profit margins for PR firms?
Social Media was a prominent feature in the report. 100% of the people asked said social media had emerged as a focus area in the industry. It was also placed highest in the list of areas expected to grow in the next financial year. See below:
|Social media (PR 2.0)|
|Corporate Financial Communications|
|Social Media Monitoring|
We spoke to Siddharth Baad, Corporate Communications Manager for Heubach Colour Pvt. Ltd in India, to find out an in-house perspective on these issues.
Siddharth explains: “Economic slowdown has certainly affected PR budgets to a greater extent."
However, Siddharth does believe that the PR business overall hasn’t had to change too much because of the Indian economy: “Due to economic slowdown, PR business has not been affected too much. The economic slowdown has certainly put pressure on corporate clients to not pursue advertising opportunities and those same opportunities are now being tapped by PR agencies to gain client attention. PR clients, who earlier believed in strong advertising mediums to send out messages are adopting a more strategic approach of content PR, through utilization of PR professionals.”
Siddharth continued to stress the transition from advertising to PR that he believes is trending in India: “The economic slowdown has forced companies and corporate clients to look up to PR as a strong strategic tool for communicating their message. They are opting out of advertising and making a shift to PR since communication through PR is more strategic, targeted, focused and cost-saving than its counterpart i.e. advertising. Based on a strategic approach of individual clients & customers (which include corporate companies & organisations), PR budgets are preferred over conventional advertising budgets as a better option that will not only position the company / brand image in a strategic way but will also curtail unnecessary communication costs (which are a part of the advertising industry).”
Q & A
We spoke to Sara Gourlay, COO of communications service group, IPAN Hill & Knowlton Strategies, and Sharif Rangnekar, CEO & Director of public relations firm, Integral PR, to find out their thoughts on the trends in India's PR industry today.
Has India’s economic slowdown affected the PR budgets?
Sara Gourlay believes: “It’s true that there has been some consolidation of budgets but in general we’re seeing that clients and prospects still have money to spend for the right campaigns. What we have seen, rather than a slashing of budgets per se, is a greater focus on the ROI and the impact of the campaign and the spend. Clients want campaigns that really hit their audiences and drive a change, whether that’s in attitude, a call to action or a buying behaviour. What we see a lot less of is a desire to spend on events and stunts just for the sake of column inches and that can only be a good thing.”
Sharif Rangnekar said: “The slowdown coupled with a negative sentiment has impacted businesses across the board. The PR industry has witnessed slower decision making in terms of closing out pitches and has also seen a growing need from clients to reduce fees. Also, often there have been renewals that have come through without an increase in retainers which effectively means a lower fee than the previous year when you consider inflation. Having said that, what is interesting is that the value generation in terms of ROI has gone up from the PR industry. The situation, while it may hurt our businesses today, is pushing us to come up with more impactful ideas so that we can support client mandates in a more effective manner. This, without a doubt will put us in a better position when the economy improves.”
The latest PRCAI trend report for India showed, while the PR business is expected to be between 11 and 20 percent this year, profit margins are expected to remain flat. Why do you think this is happening?
Sara: “Clearly it’s hard for me to see inside other people’s businesses but my suspicion is that PR agencies are investing more in talent and the cost of that talent is rising ahead of the rise in budgets.”
Sharif: “As mentioned above, fee structures have more or less remained stagnant while the cost of talent, a key component in our business, has not moved the same way. Other infrastructure costs have also been at similar levels for the most part of this year. This is bound to leave us with flat margins.”
The PRCAI report, identified growth challenges for 2013 are creating new demand, managing client expectations, hiring new resources and managing costs. How do you think these challenges can be addressed?
Sara: “There are two things that keep me up at night – insomnia and the constant struggle to find the right talent. I’m sure that IPAN H+K Strategies is not alone in finding that the result of some fairly aggressive poaching agency to agency is that real talent, with the right level of experience, skills and aptitude is incredibly hard to find. I think we need to be more mature in the way we treat our talent as an industry – you don’t see McKinsey swiping people for inflated salaries from their rivals after all. We need to invest in the development of our people and give them experience – something that employer’s value more highly than the number on the pay cheque. Managing costs is an on-going business issue, but the one thing I think that links that and creating new demand is the need for communications consultancies to value their work more highly. We too often accept the old view of PR as being the cheaper brother of advertising whereas communications, storytelling, PR and advocacy play a crucial role in the simplest of buying decisions and the most complex of business decisions. We need to own that space with pride. We too often undersell the impact of our work as an industry.”
Sharif: “I don’t think there is a formula that can address all of the factors mentioned in your question. It is all about looking beyond today. Dips and slowdowns often create opportunities as constraints forcing each of us to innovate and find our way through and out of a situation.We have to showcase the bandwidth of services and the impact that PR can have on image, reputation and sales and we have to absorb such costs to realise more business now and later. We also have to consider moving beyond metro cities to create appetite in other parts of the country. Businesses in any case have started doing that and we have to be where our clients are. What is also important is to look for new, fresh talent that does not necessarily carry the baggage of the ‘old way’ of approaching PR. I would prefer not to look too much at costs but measure the impact of investment at this time and look beyond into the future where PR continues to grow into a strong option if not a preferred one in the space of outreach including marketing, advocacy, image and reputation.”
Does the increasing integration of social media offer greater cost challenges?
Sara: “Actually I’m not sure that it does. I think there are economies of scale in integrating social media and traditional media as we have at H+K Strategies globally. Content can be taken to a wider audience. That audience then responds and feeds into the campaign. It becomes a much more organic relationship between the communicator and the recipient.”
Sharif: “I would think otherwise. We add value and deepen relationships with clients as we expand our competence in the communications space and bundle the social media offering. And even if we offered it on its own we have an advantage since as PR professionals we know what it is to communicate and engage with the public and so it should be natural to our instinct.”