The Council’s Q4 survey results are in, and our industry is surpassing even last year’s strong showing.
A full 81% of firms reported that 2012 revenues would come in higher than revenues the year before. In our survey a year ago, that number was only about 70%. Firms this time around reported revenues increasing by an average of just under 14% year over year—an extremely healthy uptick. A full 61% of firms reported a higher headcount compared with the previous year, with less than 10% of firms reporting fewer employees on the rolls. No firms anticipated lower budgets in 2013, and about a third anticipated higher budgets.
It gets better. Nearly half our respondents claimed that new business opportunities in 2012 were “more integrated than ever,” as opposed to 39% who said it was in “mostly traditional PR, plus social/digital” and only 5% who said it was “mostly traditional PR.” A small majority (53%) reported that they were gaining more of clients’ budgets than their competition from digital/social shops and ad agencies, with the rest saying the situation was remaining stable.
In a recent blog posting entitled “PR Agencies’ lost year?” Peter Himler worried that public relations shops are losing out in digital marketplace. “Over the past year,” Himler wrote, “I’ve been keeping tabs on the “strides” PR agencies have made in social media and the analytics/measurement game. Unfortunately, the picture isn’t all it’s framed out to be. With a few exceptions, I believe that agencies are losing their birthright in the battle to lead in social media communications and measurement. Other “marketing” entities have eaten the PR industry’s lunch through their ready embrace and leverage of new digital content strategies, channels, and data analytics tools.”
Our results paint a much different picture. Public relations may have its roots in traditional media assignments, but it’s been leading the market, not struggling to keep up. Last year wasn’t “lost”—it was great! As our Chairman Dave Senay observes, “While the battles for supremacy still rages in the area of social media and analytics, we’ve come to the point of being unable to account for ‘social revenues by category’, since virtually every program conducted in the industry today has ‘social’ at its heart. It’s all ‘social by design’ now. Our ability to grow as an industry well beyond the GDP is solid proof that we are taking market share from other disciplines in the social area. Anyone who cannot see that is in a serious state of denial.”
A rosy picture of firms’ competitiveness is borne out by other hiring data we accumulated. Similar to last year, all firms we queried expected Q1 hiring to either rise or stay the same year over year. When we asked firms what kind of people they most wanted to hire, “social media expertise” and “senior strategist” ranked first and second, respectively, followed closely by “generalists” and “media relations.” Firms seem to be branching out into non-traditional roles even as they retain a clear dominance in traditional media tasks.
Should we worry that many firms still remain so linked to traditional PR? Not at all! Firms have a ton of revenue to scoop up in media relations—and they’re doing it. Far from irrelevant, media relations is a strength. We’re solid in our core while continuing to expand. Our member firms’ desire to hire strategic thinkers suggests that many clients are seeing us as affording wise counsel as much as effective tactical help. It’s great to be strong in digital media, but today’s firms are so much more than the kid out of high school who knows how to tweet—one good reason revenues are so far in the black.
Finally, PR firms are continuing to innovate, with almost 60% reporting the launching of new internal processes. Last week alone saw three major acquisitions of public relations firms: Ketchum bought Capstrat, Dentsu bought Mitchell Communications, and IMG took over Catalyst Public Relations. As these deals suggest, public relations capabilities remain in demand and hugely competitive compared to other marketing disciplines.
We welcome critical voices like Himler’s, since they rally us to become better and to do more. At the same time, we think it’s also important to give credit where credit is due. So often PR firms are reluctant to cast the spotlight on themselves. When the news is as positive as our latest survey results are, it’s worth shouting about.
I would like to take a moment to recognize a leader and an industry icon, Dan Edelman who passed away yesterday. Industry “fathers” like Edelman had the vision that helped set the stage for today’s successes.