2017 was a mixed bag of sweets for the PR agency sector. There were plenty of brands that needed us. Hell, even the entire male gender needed us! Yet, taking the global view, the year wasn’t the kindest, particularly for the PR divisions of the big holding groups where results stumbled. And then a major international agency player was red carded, publically, globally, and sank into oblivion. Not the best poster child for what we do.
So, assuming the survivors are all upholding ethical practices, what do agencies need to do to be successful in 2018?
It’s now 10 years since the global financial crisis struck. In the final months of 2017, stock markets from New York to Hong Kong are going stratospheric, but actual economic growth (outside of emerging markets) is still asthmatic, including here in Hong Kong.
In those 10 years the communications environment over which we purport to hold sway has changed dramatically. In the last 24 months alone my social media feed has gone from ice bucket challenge to the 20 press up challenge to reposts of anti-Trump editorial to “mark yourself as safe” to #metoo. The connections between the social and traditional media environments get tighter and tighter with every iOS software upgrade. And, unlike our industry, consumers are platform blind.
The trinkets in our agency jewellery box that we put out for display have certainly changed over this time. But have these baubles distracted even agency leaders from spotting that the norms of how our businesses run have shifted too?
Earlier this year I presented the results of the Council of PR Firms of Hong Kong’s annual benchmarking survey; our regular barometer of how our industry is working. The results showed that the outlook in Hong Kong was largely positive. But, unlike in previous years, the number of people that held that positive outlook was smaller than in previous years. An indicator, perhaps, of the global headwinds recorded by the world’s biggest holding companies influencing the local climate.
The most significant finding from the research for me was the decline in retainer business and the increase in project-based business recorded by survey respondents. The fact that I’d heard this echoed among colleagues overseas makes me believe it is a “thing.”
Retainer business is good business because it is predictable business. It’s the platform upon which we invest in talent, resources and service offerings to keep ourselves competitive. Short-term business means higher new business costs, a much elevated need for flexibility – to scale up and scale down (rather than just up, up, up) – and a prophetic ability to plan at least two steps ahead that borders on the divine.
If I were to make a prediction it would be that 2018 should be "the year of the freelancer". Which is hugely ironic in a market where virtually none exist and has never been accepting of them. I pity the young communications graduate trying to explain to her parents that she’d read somewhere that going freelance would be a shrewd and lucrative move!
One thing for certain is that in 2018 we all must learn new ways of working and managing our businesses. To navigate short term seas more effectively we need to assess new business leads more critically, upskill through hiring, build loyalty in our client base, flexibility in our workforce, and be bold in our investments. Short term business doesn’t negate the need for a long term plan. Only then can we build some predictability into an unpredictable world.
Simeon Mellalieu is partner client development, Asia Pacific at Ketchum, and on the Board of the Council of Public Relations Firms of Hong Kong.