We were having drinks with a PR firm owner when we started talking about long-term planning. “It’s an oxymoron,” said the owner, stressing that the marketplace is so fluid these days that if PR firms get too far ahead of themselves planning-wise it could be downright counterproductive.
The point is well taken. We can’t recall another time in recent memory when being in the prediction business was such a precarious occupation, what with an ever-changing PR marketplace.
Nevertheless, PR firms still need to plan at least somewhat ahead of time for such items as capital spending, headcount and, of course, budgeting.
How PR firms handicap such items greatly depends on the size of the firm, the management structure and the culture. But, in terms of big-picture, industrywide trends we see a few things taking clearer shape in 2017.
> More roll-ups throughout the PR field. Toward the end of 2016, there was a flurry of PR transactions, as larger PR firms started to scoop up smaller and/or boutique shops that bring a new dimension to the buyer’s operation. For example, MMGY Global’s acquisitions late last year of both NJFPR and Myriad Marketing. (Myriad Marketing last year also acquired PR firm Spring O’Brien.) We expect the trend to continue throughout 2017, as a consensus seems to have emerged in public relations circles that bigger is better. There are a growing number of PR firm owners, many of them baby boomers, have read the writing on the wall and realize that at a time of tremendous upheaval throughout the business it may be a fortuitous time to sell out to a larger firm that can provide the resources needed to compete in a post-digital age. Another accelerating trend in M&A: foreign buyers, from such countries as the UK, Japan and India, are giving a much sharper look at PR properties in the States to purchase.
> Hypercompetition to acquire PR firms. Both private equity companies—such as The Stagwell Group and other private equity firms that Gould+Partners is presently in discussion with—as well as management consulting companies, including Accenture and Deloitte Touche, continue to invest in (and acquire) PR firms. We see their appetite for PR firms growing in 2017. That’s because marketing dollars that once supported advertising schedules now increasingly go to PR and marketing communications firms that can tell stories, build online communities and drive strategic communications. Private equity players will look to flip acquired firms in several years, while the management consulting companies are making strategic acquisitions with an eye on the long-term.
> Embracing New (and Nontraditional) PR talent. The PR field is notorious for having a revolving door of talent. You know the drill: managers or account executives leave one agency (or are let go) and cross the street to a competing agency. It makes for a fairly incestuous business. However, as a function of a rapidly changing market, more and more PR firm owners have started to go beyond their comfort zone and recruit nontraditional talent for their agencies, such as Web designers, journalists, broadcasters and NGO (Non-governmental organizations) experts. That trend is likely to accelerate in 2017, as PR firms face rapidly changing demands among clients for services that transcend traditional PR channels. These demands range from content marketing programming to social media messaging to, the Big Kahuna, online analytics.
> The Rise and (Rise) of Thought Leadership. “Thought leadership” has been knocking around PR precincts for the last several years and only will become more pronounced this year. The term is a catchall phrase meaning how to best position PR firm owners and C-suite executives as experts not only in PR and business communications, but in the markets in which they serve their clients. Thought Leadership takes on many forms, including blogs, bylined articles, infographics, video, webinars and live events catering to specific markets and audiences. Indeed, thought leadership is pretty much synonymous with content marketing, branding and distinguishing your firm and senior leadership from the pack.
> More Visual Communications. Are we about to embark on a post-literate society? The notion is debatable, but there’s no denying that online video in many ways is starting to supplant the written word. Digital video ad spending figures to be the fastest growing format in 2017, according to eMarketer. The online research firm estimates that U.S. video ad spending will grow nearly 22 percent this year, far outpacing overall digital ad spending growth. Meanwhile, as time spent with TV falls, the minutes spent with video across devices continues to rise, more than five hours per day. Whew. PR firms will have to ramp up their online-video strategy in order to feed the appetite and figure out unique ways to tell their stories through visual communications. Plus, millennials—75-million strong—have been conditioned to online video and expect it to be a prominent part of companies’ messaging and marketing. It’s high time to sharpen your online-video strategy or, quite likely, be left behind.
Rick Gould, CPA, J.D., managing partner of Gould+Partners is the author of “The Ultimate PR Agency Financial Management Handbook: How to Manage By The Numbers for Breakthrough Profitability of 20% or Greater,” and “Doing It The Right Way: 13 Crucial Steps For A Successful PR Agency Merger Or Acquisition.”
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