Being paid and being recognised for the value they provide are two issues facing independent PR agencies
We’ve had three multinational client wins in the past four months, and three regional start-ups who we’ve taken on as new clients,” says Tara Rogers-Ellis, managing partner of Mojo Group. “We’ve had one longstanding regional client who hasn’t paid us for a year, that we’ve now had to resign, and one regional client who has proved more trouble than they’re worth and we’ve resigned them too. The market is tough, but there is still great opportunity and we’re quietly confident about our future.”
Welcome to the life of an independent PR agency in what is a volatile, unstable and complex market. As with Rogers-Ellis, the majority will tell you it’s also a market filled with opportunity, but you can’t succeed if you’re not being paid.
“PR services tend to slip down in order of priority in payment schedules and ironically, the most longstanding clients are often the ones who delay their payments the longest….”-- Tara Rogers-Ellis, managing partner of Mojo Group
“Primary challenges are being recognised for the value we provide, and being paid for it,” admits Rogers-Ellis. “Staying on top of receivables has never been more critical – PR services tend to slip down in order of priority in payment schedules and ironically, the most longstanding clients are often the ones who delay their payments the longest. They exploit your goodwill which can be disappointing.”
As with boutique advertising agencies, the arguments for going it alone in the PR field are similar: That the old operators lack creativity, are slow to make decisions and even slower to react. Independents, in contrast, are free of the bureaucracy and politics that weigh their network rivals down.
With PR, however, it’s not quite that straightforward. In a climate of transformation, embracing new technologies and integrating your offering takes money. Money that, by and large, only the multinational networks have.
Sunil John, the founder and chief executive of Asda’a Burson-Marsteller, defines the PR market in the MENA region as having four segments (read separate interview). The first, which is made up of more than 100 firms, consists of those agencies with up to $1 million in fee revenue. The second features the 20 to 25 agencies with fee revenues of between $1 million and $5 million. The third consists of the 10 agencies (maximum) that have fee revenues of between $5 million and $15 million. There are two players at best in the heavyweight division of $15 million to $25 million, with Asda’a Burson-Marsteller one of them.
The majority of agencies are fighting for survival at the bottom of the rung, with limited innovation taking place and cashflow a serious concern.
Georges El Assad, chief managing officer at Front Page Communication, an independent PR agency with offices in Beirut and Dubai, says achieving the numbers is both the biggest priority and the greatest challenge for independents, with ‘unfair’ competition from PR agencies that are part of international communications groups making life difficult.
“PR agencies that are part of international communications groups can afford to wage price wars on independents in terms of PR fees while relying on that kind of cushion [from a consolidated bottom line across adverting, media and PR].”-- Georges El Assad, chief managing officer at Front Page Communication
“They can afford to wage price wars on independents in terms of PR fees while relying on that kind of cushion [from a consolidated bottom line across adverting, media and PR],” says El Assad. “Within a strategy of wearing out the independents financially (and perhaps driving some of those out of the market) then hiking up their fees when the theatre of operations has become freer to them.”
Yet, as with advertising, the number of independent agencies is increasing, providing more and more competition in an already competitive market. Competition from elsewhere is also on the rise.
“The world is becoming more familiar with the value of PR, but consequently our area of expertise is attracting new competition,” says Rogers-Ellis. “We’re at risk from digital, social media and SEO agencies, as well as the very media companies that traditionally worked with us, who are now working directly with our clients. Our most recent competitors are consulting companies who are adding the reputation management element traditionally managed by PR agencies to their own portfolio of services.
“If we want to stay in business we have to make sure that our services are integrated, that we’re nimble, smart, creative, add value beyond the standard, and become so integral to our client’s business that they forget we’re not permanent members of their team.”
Dubai-based Mojo Group is growing, as are others, but not without tackling the transformation affecting the entire industry. Its PR team now includes creative directors, filmmakers, graphic designers, UX designers and digital strategists.
“Our office reflects the new order too,” explains Rogers-Ellis. “We now have a photographic studio, an editing suite and a podcast station, as well as almost a dozen breakout zones to accommodate the millennial work style. It’s a completely different environment to a PR office less than a decade ago – and we love it.”
“Let’s not forget the crucial role that start-ups can play,” says El Assad. “There are very young, bright, and illuminated minds which enter the scene every day, injecting new blood and new perspectives of how to devise solutions in all sectors, communications included.”
Rogers-Ellis adds: “The future of PR is bright, not least because of millennials – there has never been a generation more suited to our craft. They are strategic by default, wanting to understand why they are doing something and where it fits in to the bigger picture; they need change, flexibility and diversity in their day; they are natural researchers; they need to learn new tasks and new skills constantly to remain engaged. If we understand how to embrace their talents and skills without trying to fit them into the old style of working, they are perfect raw talent for PR.”