| Even before the downturn was officially dubbed a "recession," businesses
were preparing for a leaner 2009. They don't, however, appear to be blindly
slashing their PR and marketing budgets. In fact, a random — and unscientific — sampling
suggests clients continue to value the counsel of their agencies, but they
are going to be more focused on results. They will insist accountability. And
while they probably won't sever agency ties altogether, they may do some
serious trimming.
The message to agencies is clear: Clients are going to expect more from their agency and they will need your cooperation and guidance.
A survey conducted in March — before the Wall Street meltdown — hints at this trend. The 2008
Client's Perspective on Economic Conditions (www.rswus.com/survey)
was commissioned by Reardon Smith Whittaker (RSW), a lead-generation
and business-development firm focused on PR and marketing.
While 77% of the businesses responding said that the economic conditions had
moderately or greatly affected their operations, 76% indicate that they had
no plans to alter their use of outside agencies.
 |
Mark Sneider
Managing Director
Reardon Smith
Whittaker |
 |
Lisa Visconti
Director of Marketing
VAI |
 |
Clifton Lambreth
Zone Manager
Ford Motor Company |
 |
David McCulloch
Director, Public Relations
Cisco Systems |
 |
Cheryl P. Heiks
Director of
Communications
and Events
BeWell.com |
But while the relationships may remain, look for
budgets to shrink, says RSW managing director Mark Sneider.
Clients "aren't sure of where things are going as we head into 2009,
so their natural reaction is to hold back."
Sneider's analysis captures the attitudes of several of the companies The Firm
Voice contacted.
Commitment to PR on a tighter budget
"A recession forces businesses to re-think
all budget expenditures and determine adequate return on investment. At this
time, VAI's [2009] PR budget remains intact, but should we need to re-evaluate
it based on the current economic conditions, we will do that," says Lisa
Visconti, director of marketing at VAI, an enterprise
software developer.
Clifton Lambreth expects Ford
Motor Company to cut its PR budget, but only commensurate to sales
volume — he expects a roughly 15% drop. Lambreth is zone manager for
Ford in marketing and sales operations; he's involved in decision making
for Ford and its dealers' advertising budgets. He's also the author of
the book Ford and the American Dream -— Founded On Right Decisions.
"You know what Henry Ford said: 'Stopping advertising to save
money is like stopping your watch to save time.'" And that applies to
PR. "We are a traffic-driven business. We have to create demand." In
the coming year, damage control will also be important. For instance, he says,
one challenge will be to get the media to refer to a bridge loan as just that — not
as a "bail out."
Cisco's financial year runs August to July, and
it doesn't anticipate major fluctuations in PR spend before the end of
the fiscal year, says David McCulloch, director, public relations, Cisco
Systems.
"What we will do is ensure our budgets are aligned behind those priorities
that best position Cisco for the upturn when it comes. We believe economic
downturns present us with opportunities to get closer to customers, to differentiate
ourselves from our rivals, and to gain market share at their expense. PR certainly
plays a key role in that strategy."
Don't expect any dramatic shifts. Cisco "manages obsessively for
the long term, which means we tend not to make dramatic changes in our PR strategy
or spend from year-to-year. Of course, we tweak our strategy as we see long-term
trends unfolding, but it's impossible to drive meaningful, global communications
programs if you revisit your budget or priorities too often."
[HEIKS PHOTO >>] One organization plans to increase its PR budget in
2009. But that's to be expected. BeWell.com, a social
network that connects consumers with physicians and health experts, officially
launched just this month, explains Cheryl P. Heiks, director
of communications and events. (It's is owned by LLuminari, a health media
firm.)
As she points out, health is always a concern for consumers regardless of
the economy; healthcare may not be recession proof, but it is less subject
to the vagaries of the economy.
But there's another reason, she says: LLuminari's conviction that
PR is an important factor in any successful consumer offering.
Greater accountability
Whether budgets go up, down, or remain stable, expect clients to demand even
greater accountability and transparency.
Help clients execute a PR plan based on their needs,
but be prepared to do so on a smaller budget and/or fewer hours, counsels Diane
Dady, marketing manager at VAI. "PR consultants should have
open discussions with their clients about what they want to achieve and what
PR vehicles will make the most sense based on the company's budget."
"We're keeping an eye on how we spend money," says Heiks.
And she expects the same from her agency. Lambreth, too, predicts greater emphasis
on tracking results and more accountability.
McCulloch is blunt on this point. "Bottom line: A client should never
need to ask its agency whether its money is being spent effectively." The
best agencies are proactive and transparent in reporting budget information
and results side-by-side, he says. "If the agency can see a program isn't
working well, they should be the ones to suggest killing it and refocusing
the budget elsewhere. That's one of the key ways in which a PR agency can become
a trusted advisor, and it's especially true in more difficult economic times."
Another thing that's true during stressful economic times: A craving
for the fundamentals.
Back to basics
"In a tough economy, people go back to basics," Heiks says. Here's
what that looks like to the clients consulted:
- Cultivate relationships. Relationships are more important
than ever, Heiks says. In a tough economy people turn to those they can trust.
- Tell the story. Lambreth and Heiks both stress the importance
of actively telling the story.
- Do more with less. Budget constraints will require you
to think creatively about what you can and can't live without, says
Heiks.
- Solve the client's problem. "If you come in
with solutions, we're listening," says Lambreth.
What they're listening for, of course, are your ideas on how they can take
advantage of a less-than-ideal situation.
Crisis and opportunity
Smart agencies recognize that difficult economic times present opportunities,
not only risks, McCulloch says.
"Companies such as Cisco will be fiscally prudent and look for ways
to save money, but we may do so by looking for economies of scale through the
expansion of existing agency relationships into more international markets,
or perhaps by consolidating work with fewer vendors," he explains. "When
companies like ours take these sorts of action, it certainly presents upside
opportunities for agency leaders who are proactive in discussions with their
clients versus those who are passively sitting back hoping budget cuts won't
be forthcoming." | 
