The public relations agency business is in good health

Francis Ingham, Director General, PRCA and Executive Director, ICCO reports that the story of public relations agency is one of constant innovation and evolution but the business fundamentals remain strong.

Any overview of the public relations agency scene must start with the undeniable truth that it is growing, and doing so in every region of the world.

We know from the ICCO World Report that agency income grew by 7% in 2015, breaching the $13 billion mark; and that agency employment grew from around 80,000 people to more than 85,000.

Moreover, this growth is not an aberration – agency income has grown in every one of the past five years.

In challenging economic times, the public relations agency story has been one of success in the face of adversity. It’s easy to ignore the good and concentrate instead on the areas where improvements could be made.

This first #FuturePRoof report, sponsored by ICCO and the PRCA, has some great thoughts on addressing these, and many other issues.

Each contribution is well worth reading, studying, and learning from the brainpower of others, who are offering their thoughts for free in the spirit of industry collaboration and learning – itself a great feature of our industry.

But one theme stands out for me - our industry needs greater confidence in itself, in its story, its future, and its value to organisations.

PRCA and ICCO whitepaper launches aimed at building better public relations agencies

Stephen Waddington, Partner and Chief Engagement Officer, Ketchum explains how this latest #FuturePRoof project set out with a bold and simple ambition: to characterise a cross section of agencies that make up the modern public relations business. 

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Download the whitepaper here.

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Progressive public relations agencies are rapidly modernising. They are embracing new skills in data, research and paid media, and are investing in creative teams.

The public relations agency sector is strong. Profits are healthy in well-managed businesses, and the market overall is growing according to both the PRCA and ICCO.

Innovation is everywhere in practice from freelancers through to the largest agencies. 

However one area in which there remains surprisingly little innovation is around billing models. The dominant structure continues to be fees charged on an hourly basis, albeit on retainer or project basis.

These are the headline findings of this #FuturePRoof project on the future of the public relations agency, backed by ICCO and the PRCA.

The project identified eight drivers of change in the agency business.

Value

1. Public relations is outsmarting rival disciplines through innovation. It is helping clients build better organisations. Therein lies its future, and huge value.

Drivers of innovation

2. Clients, shareholders and staff are the three drivers pushing agency-owners to build better businesses. That can only be a good thing.

Opportunity

3. There’s a chasm emerging between the business model of traditional agencies, and the demands of modern clients. Smart agencies are building businesses in this space.

4. Agencies are limited only by their skills and ambition. Small agencies are able to compete with large thanks to communications and travel.

Billing models

5. Agencies are simple businesses that are well understood by clients. Innovative business models threaten clarity and risk confusion.

6. Better measurement systems are fundamental to business model innovation. It remains a work in progress for agencies.

Service innovation

7. Core services within a modern agency include storytelling, creative and content, as well as paid, earned and shared media, as they shift from traditional media and publicity based services.

Threats

8. A shift to 24/7 working and the cost of infrastructure are two big issues that need to be tackled by public relations agencies.

Project ambition: characterise agency models

The goals of the project were straightforward. We wanted to build on the issues raised in #FuturePRoof, the project developed by Sarah Hall to explore the future of public relations.

We wanted to identify how agencies were responding to the shifting client and media environment.

The project started with a roundtable at the PRCA in London, where we debated some of the macro issues.

My thanks to the following people for helping set the agenda for the project: Sam Theobold, Text100; Alicia Mellish, Stir PR; Colin Cather, Bottle PR; and Dominic Shales, Lexis.

Next, we reached out through the #FuturePRoof community, ICCO, the PRCA, and via personal networks, and invited agency bosses to tell us about their businesses.

We’ve worked hard to get a cross section of contributions but also to balance the gender diversity of contributors. The public relations profession is frequently criticised for poor representation of women in senior positions. Female contributors to this project outnumber men.

We wanted to cover a broad cross section of agency services and types:

• Business types – freelance, owner-managed, independent and public; regional and international; specialist and integrated
• Agency models - project, retainer, payment by results and performance based
• Services - creative, integrated, earned, paid, shared and owned

We asked about the shape of each consultancy, and their responses to the demands of modern clients.

Thank you to the contributors

Seventeen agency bosses have candidly laid bare their agencies. Trade associations have also shared their expertise.

My thanks to Francis Ingham for supporting this project on behalf of ICCO and the PRCA.

Thanks also to all the contributors: Ruth Allchurch, George Blizzard, Alison Clarke, Colin Cather, Julius Duncan, David Gallagher, Jim Hawker, Nicky Imrie, Dieter Lloyd, Pam Lloyd, Ella Minty, Alex Myers, Laura Richards, and Renee Wilson. 

You'll meet them all in the essays that follow. Each contribution contains valuable insights. You can download them HERE and we’ll be publishing them one a day on this #FuturePRoof blog. I hope that you find them useful.

#FuturePRoof: Crowdsourcing The Future Of Public Relations And What Happened Next

Sarah Hall, Editor, #FuturePRoof, and Managing Director, Sarah Hall Consulting, talks through how the #FuturePRoof project brought together thinkers and doers in an uplifting study of the future of public relations and how the initiative has developed since publication.

#FuturePRoof was launched in November 2015. Featuring 35 leading public relations professionals, the book’s aim was to remind public relations practitioners and the wider business community of the value of public relations and assert its role as a management discipline. 

The reception to the book has been extremely positive. More than 1,800 downloads and 100 hard copy sales later, practitioners are still sharing their favourite chapters and feeding through their own thoughts on where the public relations industry is headed.

A series of events has been organised across the UK looking in greater depth at the opportunities and challenges faced. 

From emerging areas of practice such as public relation’s shift towards paid, how to map workflow and freelance business models, to more traditional topics such as measurement and evaluation, ethics and stakeholder management, #FuturePRoof has generated much food for thought.

This practical guide aimed at driving up standards has instigated debate about how our profession can better professionalise and innovate. It has also provoked discussion about how we stay fit for the future and prevent other marketing disciplines from stealing our turf.

#FuturePRoof PRCA and ICCO policy unit

Work hasn’t stopped there. We’ve continued to build the community and challenged people to apply their expertise to the future of professional practice.

Francis Ingham invited Stephen Waddington and I to create a policy unit and work with the PRCA and ICCO to think through some of the issues raised by the #FuturePRoof project with PRCA and ICCO members. 

Just four months on we will shortly be publishing our first white paper on agency business models for the PRCA and ICCO, one of three we have committed to in 2016. 

In this whitepaper, due out on Tuesday 5th April, a progressive group of agencies is seeking to break with tradition. Each consultancy has carved its own niche and some are moving beyond people to charge not for time but for creative, insight, and results.

These are real pioneers and I’m grateful to everyone who contributed for their generosity in sharing their knowledge and the lessons they’ve learned along the way. 

Many of the discussions generated by the book and this first project have identified a number of topics and issues that we’ll develop in the second edition of #FuturePRoof which will be published later this year.

A call out for contributions will be made once the final book spec has been confirmed, so please do join the community if you’d like to be involved. 

To be part of the conversation, join the Facebook group and follow @weareproofed on Twitter.

#PRTalk on #FuturePRoofing the industry; what got practitioners talking

Last night #FuturePRoof editor Sarah Hall and members of the community teamed up with @PRTalkUK to host a Twitter chat. Here’s what people had to say.