As we enter year 3 of the pandemic, PRmoment India spoke to a range of PR leaders both consultancy and client side to understand what lies ahead for 2023.
Time for PR firms to rethink their value proposition?
Sujit Patil, VP, head of corporate communications, Godrej Industries Limited and associate companies shared that he was happy to read former Niti Aayog Vice-Chairman Rajiv Kumar’s quote where he said that India will still grow at 6-7 per cent in the next 2023-24 fiscal.
Patil added, "I would tend to believe that. There is cautious optimism overall and I feel it when I speak to my peers and many of the business leaders. As an eternal optimist, I would like this sentiment to prevail."
Main Challenges for the PR business
Commenting on the primary challenges to the PR business in 2023, Patil said, "I was intrigued to read the 2022 Asia-Pacific Communications Index. It reveals that PR firms are becoming less integral to client work. Multiple in-house communications professionals across Asia-Pacific are questioning the ROI of PR firms even though they use more than one. Conducted by the Asia-Pacific Association of Communication Directors (APACD) in conjunction with Ruder Finn Asia, the study mentions that communication leaders are bullish about the communications function's prospects, as corporates emerge from the pandemic. In my peer network too, the discussions around PR consultancies are based on aspects like client-consultancy relations, service orientation, outcomes, effectiveness, and value-add.
On an optimistic note, Patil said, "I think more than the challenges there are a host of opportunities for PR consultancies to be better embedded in a client organizations scheme of things. For example, PR consultancies' adoption of CommTech will help them be more data-driven and hence demonstrate authentic returns. Firms that can provide research-based PR, deeper engagement with the stakeholders and robust measurements have the strongest chance of continued profitability and growth.
Archana Jain, managing director, PR Pundit, says, "Our forecast is one of cautious optimism, where we believe that our economy will be dented but is unlikely to drown. As expected in a downturn, companies and brands keep a close watch on ROI, hence some budget outlays on marketing and PR are anticipated to get hit, but as PR spends are a smaller subset of the larger marketing spends, and the efficacy of PR more impactful, we have projected a continued focus on PR to ensure brand saliency.
We would peg the growth of the industry in the range of 10-12% in CY 2023."
Sectors of growth
Jain also picked hospitality, health tech, beauty and personal care as key sectors that will uptake PR in 2023, the last specifically needing a PR approach to build trust.
A key challenge to growth
"Skilled and vested talent in the fast-growing sector & measurement of ROI", opines Archana Jain.
PR is the differentiator in a recession
Asawari Sathaye, director of communications and patient advocacy, at OPPI agreed that PR will remain key even in a recession. Sathaye states, "The role of public relations and communications becomes even more important in tough times as it is the most effective tool to build and sustain credibility and trust. During previous economic downturns, it has been proven that factual communication both external and internal about the company's activities and progress has helped demonstrate resilience and agility. Hence, I believe that PR and communications will continue to remain the bedrock of any organization."
Increase in PR firms' profitability
Nitin Mantri, group CEO, of Avian WE says, "Despite a slowing economy, I am cautiously optimistic about the industry’s growth.
The ICCO World Report 2022 recorded an overall agreement score of 7.3/10 on this point, with most agency heads agreeing that an increase in agency profitability can be expected, going ahead. The APAC score on growth was 7.8, the second highest after the LATAM and North America score of 8.4.
The talent challenge
Quoting the latest data, Mantri says, "Alongside economic conditions, PR firms across markets will face staff recruitment and retention challenges. According to the latest ICCO World PR Report, retaining key talent is the biggest challenge PR agencies are facing when it comes to their talent strategy, up 7% from last year (59% 2022, 52% 2021)."
Opportunity in C-suite counsel
Vandana Sandhir, India Lead, Six Degrees BCW and chief client strategy officer, BCW India Group feels there is a big need and opportunity for C-Suite counsel.
She says, "Given the major shifts in the business environment, the need for counsel in areas ranging from business transformation to ESG and purpose, from DEI to employee engagement, crisis management to fears of a recession, and more, is and will continue to be high. The C-suite has a lot on their plate with these, and I see us being the best placed to help them mobilise their stakeholders as they navigate that.
The challenge will be to ensure that we can get our people to continuously evolve and upskill to be able to provide that counsel. Things are changing every week, every month, and we need people who will stay on top of that."
Single-digit growth in PR budgets in 2023
Jaideep Shergill, founding partner at Pitchfork Partners explains, "There is the real danger of a mild recession in the US, which will naturally affect India too. India will not go into recession but it would grow slower in such a situation. That, in turn, will affect the growth of marketing and PR budgets.
Overall, I see budgets remaining steady or growing only in single digits. This would still make us among the fastest-growing PR markets in the world."
As per Shergill, "The biggest challenge would be adapting to how we deal with audiences’ shifting consumption patterns – from new platforms to tastes. This is happening at a great pace and it’s a challenge for the industry to keep up."
India insulated from global headwinds
As per Amit Misra, chief executive officer, of MSL South East Asia, I think there is a real opportunity for agencies in the greater India region, which is really coming into its own. As discretionary spends go up in these geographies, the opportunity to partner brands and services to win mindshare will be huge."
Key Challenge: Amit Misra
"The main challenge for us in 2023 as I see it is going to be aligning our deliveries with client expectations to ensure fair compensation. We need to earn more to pay more."
2023 opportunity for PR to expand its ambit
Kunal Kishore, founder and director, of Value 360 Group feels there are clear high-growth sectors for PR in 2023, primarily tech-led businesses and start-ups.
He outlines, "Electric mobility, a sector that has now found its feet in the Indian market, will evolve with several new players entering the market over the next few years. Healthcare, which received a big push after 2020, may also see start-ups using public advocacy to catapult growth."
Commenting on the impact of the recession Kishore said, "Currently, experts are predicting that India will not feel as strong an impact of the recession as other markets.
In fact, India is deemed to be a beneficiary of the ongoing developments, thanks to its internal demand-focused economy and a vast pool of young talent. These factors point towards positive growth trends, albeit at a slower pace than in previous quarters. "
Could 2023 see a return to mergers and acquisitions?
Nikky Gupta, co-founder & CEO of Teamwork Communications, says, " I believe the PR industry in India will continue to spike in growth and profitability. Mergers and acquisitions will happen as a growth strategy for most firms."
Growth sectors for PR
Apart from health, and tech, Gupta also feels a niche area like speciality chemicals will do very well and will have demand for b 2 b communications strategies, "There are a large number of players in this industry that are focusing extensively on enhanced research & development capabilities to launch new and improved offerings."
New offering models for PR firms?
Xavier Prabhu, founder & MD, of PRHUB, says "2023 will continue to be a dynamic year with some sectors, particularly start-ups being cautious with investments. This has nothing to do with the resilience and value of PR and the PR firms but more to do with the fact that the macro economy worldwide and in India will continue to evolve and be difficult to predict. Being a mixed bag depending on how each firm smartly navigates the year and makes its choices, they will be able to emerge unscathed or with exponential growth out of it."
Prabhu adds, "On the opportunity side, clearly see the reinvention of the business model as the greatest opportunity before PR consultancies. It allows us to innovate, redefine what PR was defined and perceived as and move up the value chain. Am not talking about the often chanted buzzwords like storytelling etc. but am talking about newer practice areas and offerings. The day is not far off when we will see Indian PR firms that don't offer media relations as a service in any form at all."