Reality Check: PR Pros Reveal How the Market Roller Coaster Impacts Clients, Revenue and Staff — and Share Quick Tips for Coping

October 22, 2008

Much has been written in the trades, marketing communication blogs and beyond on how the Wall Street rollercoaster ride of these past few weeks is impacting the communications business. Op-eds have been filed on the topic, tips shared and white papers written on the topic — and the coverage is only going to continue, as the bottom seems yet to be found, and practitioners struggle to assess the damage.

So while we wait for the fallout to register — and while the media and public alike gear up for the election, now only weeks away — this is a good time to take a moment to hear how all the turmoil is impacting your peers and colleagues in PR. We queried several smaller to mid-sized agencies and asked them to share how they're coping—and what they're recommending now. Here's what they had to say:

1. Many clients are turning inward—counsel otherwise. As Wall Street and the markets continue to reel from recent turmoil, many financial companies instinctively turn inward and look to avoid the spotlight," said Richard Dukas, president and CEO, Dukas Public Relations. "However, they should be doing just the opposite — staying visible in the media shows companies are confident and working to protect their investors' interests and committed to easing their concerns during a time of intense economic uncertainty," added Dukas, whose New York agency's financial practice represents a number of hedge fund managers, investment banks and other financial luminaries that are frequently quoted as industry leaders during this time of economic crisis.

"We have seen prospects taking longer to sign new agreements and some of our clients are watching expenses more closely, which is only natural," Dukas continued. "This, of course, means that all agencies have to provide even more value — and results — during these tough times. We also are ramping up our own marketing efforts even more than we normally would, which I think is a bit counterintuitive. We realize that the pace of business is slowing down, but in order to continue to thrive as a business, we have to stay proactive, prospect for business and do our own marketing and PR. Again, that's the message we're sending to clients—now is not a time to slow down. PR and marketing needs to continue for clients and agencies alike."

To that, Dukas said the agency's clients aren't hiding or retreating into a shell. "While they certainly are attentive to the headlines and ongoing stress on the market, they continue to move forward, look to generate more business and utilize PR as a vital sales and marketing tool," he said.

2. Some clients are citing cash flow problems—revisit client rosters. Judith S. Lederman, with JSL Publicity & Marketing, had this to say, encapsulating some of the concerns and challenges faced by smaller boutiques at this time: "Suddenly, this month clients who have been steadily paying their bills are starting to fall behind on payments citing 'cash flow' problems on their end. It's scary how things are 'tricking down.'"

In addition: "Since we established a relationship with our clients, we're not about to pull the plug on their PR services. But it presents a hardship. We get stuck in a standoff of not wanting to dump the client, since they are waiting on their receivables just like we are — but we can't afford to float them the services. From a customer service perspective I would like to be able to keep them on the roster. But from an operational standpoint, it isn't feasible."

3. More clients are cutting back—consider a la carte services. Genna Keller, principal at Trevelino/Keller, said this: "Our take is that we are encouraging clients to stay the course — now is not the time to stop campaigns. We are advising clients to be smart, flexible — and we have to offer flexible solutions. Just last week, in fact, we rolled out a suite of a la carte services for companies and organizations that need brand work, content development or launch support and are not ready for a long-term or even short-term engagement. All services are priced at $2,500 in fees."

4. Many client stakeholders are skittish—emphasize safety, security, stability. Lisa Calhoun, president, Write2Market, said this: "Safety, security and stable growth are looking sexier than ever from a messaging standpoint. Our clients' biggest fears have been about unknown," says Calhoun, whose agency is based in Atlanta. "To counter that, we're helping them focus on what is known about their market dynamics. We're counseling all our clients whose businesses have been impacted by the market tumbles to quickly get out a message about their stability and long term commitment in letters and on their web sites. Now more than ever, customers need reassurance that they can continue to invest, spend and live normally. For those clients with large financial services divisions, we're further advising them to invest now in documenting procedures and standards in plain English so they are able to easily share with stakeholders their transparency and diligence."

5. Some clients can speak to the crisis—suggest thought leadership programs. Joan M. Vander Valk, vice president, Stern + Associates, said this: "While some agencies are struggling to retain clients, others are celebrating successful client relationships that have lasted more than a decade. In fact, the economic crisis is impacting our agency positively, with clients boosting their PR efforts and in many cases, streamlining advertising expenditures. Our roster is growing with new clients and expanded programming for existing clients," shared Valk, who is also president of the New Jersey Chapter of the Public Relations Society of America.

In addition: "Many executives believe that public relations professionals are only a valuable source for damage control. What they do not realize is that PR professionals don't just simply aid a company when it's down, but make constant efforts to maintain a brand. An economic downturn is the time when companies must promote themselves and stay on the public's radar," said Valk. "Organizations benefit by reminding customers they are operating and ready for business, and public relations is a cost-effective way to do this."

As for how the agency's clients are handling the market news, "The current climate is creating opportunities for our clients to become part of the dialogue and leverage their expertise in related topics," she said. "For example, clients in our Thought Leadership practice area are addressing issues of transparency, over-regulation, ethics, risk management, financial regulations, executive succession pitfalls, competitiveness and more, while manufacturer clients address cost savings, value and efficiencies provided by their products," Valk said. "While the current market changes are certainly bringing discussions about ROI to the forefront, clients are reading the headlines more closely and are more receptive to recommendations aligned with what's news."

Here's what she's recommending to clients now: "Informing the public of a company's health can help maintain confidence in the business. Investors want reassurance from the companies they are backing. Employees, who may fear layoffs want to know if their jobs are safe. Retaining the support of investors and employees can show clients the business is stable and able to attract new dollars. Our advice to clients is to continue to invest in public relations: Connect your story/message with the headlines in a positive way so you are positioned as a solutions provider or problem-solver in the midst of the mayhem."