There is sense of both hope and frustration among PR professionals as 2015 draws to a close. Hope that 2016 will be the year, the PR business really starts to overcome the challenges of growth, but frustration because the solutions are not easy to implement.
The PR pie has grown, but not value for services
The good news is that the overall PR pie has grown due to the influx of a large number of start-ups and companies have benefitted from this in 2015. However, Subhash Pais, founder and business head - i9 Communications, says that he believes that, “This has camouflaged the overall stagnation of the industry. We have seen a good amount of parallel or downward movement by large and medium sized brands towards medium and small sized agencies and that trend will continue in 2016.”
Pais believes that clients and in-house PR teams are increasingly picking medium and small size PR agencies, which impact large PR agencies negatively.
Supriyo Gupta, CEO, Torque Communications, agrees, “If there is growth, it will be for individual organizations if they are at the front of the line in the turnstiles of clients in and out – often with very little change in the deliveries. So growth will be for the company whose turn it is at the turnstile.”
Gupta points out that, “Even the retainers that look very large are actually quite small when averaged out across the markets they serve. There is virtually no joy in a Rs 4 crore annual account if it gets divided up across 50 odd markets – the net result is a very small investment in each market and the same bunch of stringers handing out press releases across India’s non-metro towns.”
Fighting brand fatigue with PR
Pais also believes that brands are a bit fatigued. He says, “The plain vanilla PR agencies overall haven't done enough in terms of creating excitement for these brands, so they feel the money being invested is not giving them the right bang for their buck.”
Gupta says, “The reasons are not hard to fathom – PR agencies are under-invested in both by themselves and their clients. Resources have become costlier without the commensurate improvement in capabilities and yet it is a business that rarely attracts the best of talent.”
What could drive growth in 2016?
The biggest shift in PR is that managing the entire business environment for a client can become a vital role of PR consultancies. If PR can transition to that, Nitin Mantri, CEO, Avian Media and president, PRCAI feels the PR business will maintain its’ clip of 15 percent growth in 2016.
Aniruddha Bhagwat, co-founder and director, Ideosphere Consulting, says, “On a conservative estimate, the industry should grow at 10-15%, but if as an industry, we can work on pushing the envelope of the possibilities through insights and new content-led communications, the industry has potential of 20-25% growth in 2016.”
Bhagwat suggests a bi-focal communications model to spur growth. He says, “One team would focus on strategy and alignment of business goals of brands, and the other on creation of content, insights, and measurement analytics. The talent requirements for each team are different, and they would need to integrate together.”
Mantri however feel, “This growth will come from integrated work. Most forward-looking agencies had seen the writing on the wall and switched to integrated campaigns. But now there is only one way forward: reinvent and remodel. Agencies need to innovate and expand their communications ambit to include CSR, government affairs and digital using tools, gadgets and platforms that speak to a more discerning audience.”
Content could double PR growth
Gupta has a two-part suggestion for reviving growth, one which he says is easy to figure out, but hard to implement. He says. “First, focus on content. Sadly, it remains the weakest link of most agencies and yet I see a multi-million-dollar opportunity in that direction though it has to be thought of very, very differently. The returns may not come in the next two years but the winner after a decade will be the entities which became great at managing content.”
Next, Gupta recommends making, “Large investments in technology tools. Given the dearth of money in the PR business, easy to say but difficult to actually do so. The key is simple: Anyone with a war chest of Rs. 20 to Rs. 40 crores can transform and dominate this market – and raise revenues alongside profitably.”
There are other ways PR could continue to grow. Pais says, “I feel the next 12 months even though challenging will lead to better topline and bottom-line growth especially for the mid and small sized agencies like ours. I feel most of this will be fueled by the startup segment which has started to make its presence felt in 2015. I think we will at least see another year of the same, till investments into startups start seeing a pull back.”
Pais also believes that, “Smaller brands are quite likely to look to re-package and reposition themselves and that will also see new entrants into the PR industry. Rural marketing is likely to see quite a bit of growth and that could also give a push to the PR industry especially in Tier 2, 3 and 4 cities.”
Solving the talent issue
Ultimately the talent issue will have to addressed to bring fresh impetus to the PR business.
Sunayna Malik, managing director and senior vice president, Text 100 says, “Our talent mix and hiring patterns need a complete overhaul. We need to focus on both enhancing and adding new skills on a regular basis.” Malik believes the PR industry needs to, “Focus on building and skilling our talent pool, because they really are at the heart of our business. Our key talent needs to be retained, nurtured and equipped with pertinent skills to strengthen their understanding of the changing dynamics, whilst simultaneously we should be adding ‘specialists’ with deeper understanding of specific domains to our team.”
And all this needs to be done really fast.