Continuing with the PRmoment India Leadership series; a look at whether Indian PR firms now prefer to stay independent, fast and better in tune with changing client needs. PRmoment catches up with Ashraf Engineer and Jaideep Shergill from Pitchfork Partners.
The phase of consolidation in the Indian public relations (PR) landscape is virtually complete. This has readied the industry for another wave that will transform it fundamentally.
Just look at the facts. According to recent industry surveys, globally industry growth slowed to 5% in 2015. Survey estimates peg the global industry’s size in 2015 at $14.2 billion, up from $13.5 billion in 2014. By 2020, the industry was projected to reach $20billion.
Compare this with the Indian scenario. Estimated at Rs 1,120 crore ($165 million) in 2016, the PR industry will nearly double in size in just four years to Rs 2,100 crore ($309 million), per a recent report by the Public Relations Consultants Association of India. In fact, the Indian PR industry doubled in size over the previous eight years too with revenues in 2008 at a mere Rs 490 crore ($72 million at today’s dollar value).
The report correctly pointed out that there was comprehensive consolidation at the top of the pyramid, channelling the bulk of the growth to the large players. At the lower end, we saw several smaller firms springing up but accounting for a very small proportion of the revenue.
Most leading independent firms in India have now been acquired by global networks, but now we are seeing the birth of exciting firms tailored to today’s communication needs. And they’re thriving.
This is because of audiences’ changing communication patterns as well as a shift in relationships with clients. Many now prefer project-based engagements to retainers, enabling greater focus on outcomes and underscoring the need for specialised services.
Also, as we’ve said consistently, the older model of output-based deliverables is losing relevance. Most communication heads now expect their agencies to focus on strategy and deliver outcomes through multi-channel proficiency and content.
The larger agencies, part of global-network long tails, tend to be slower on this front. While they have the resources, and are willing to commit them, they take longer to effect mindset and institutional changes. Often, these decisions get lost in a global bureaucratic maze. There are many virtues inherent in global networks, but speed isn’t one of them.
Therefore, so many small, but sharply-focused agencies are taking centrestage. These range from boutique strategy consultancies – like Pitchfork Partners, which we are part of – to specialised creative or digital shops. These smaller players are offering impactful, full-service or specialised models at lower costs to clients. Many clients are saying they’re rather work with lean agencies that are more committed to them than gargantuan ones with attention deficit disorder and large bills.Therefore, it’s silly to think that size equals success and longevity.
Not surprisingly, agency leaders flag off new technologies, content, new communication channels and data – not size – as the drivers of change.
It is this nimbleness and freedom that is turning many agencies away from the idea of being acquired. They understand that the key to the future may not necessarily be higher billings, but getting the model right.
The days of clients handing over all their PR budgets to an agency and getting out of the way are gone. Now, it’s about partnerships. Already we are seeing clients consolidating their agency pool with business success at the centre. This means that brands need quicker response times from agencies, which in turn need to work as extensions of clients’ marketing or communication departments.
Large agencies must understand that there is no such thing as security anymore. They can't control the communication landscape, but they can benefit from it. A shakeout is inevitable, but it will be creative destruction. It won’t be the largest that survive but the ones that understand the curve and make sure they are ahead of it.
Ashraf Engineer is principal consultant and Jaideep Shergill, co-founder of Pitchfork Partners Strategic Consulting LLP