With just weeks until the winter solstice, dark rumours came like icy gusts. There is isolated talk of chill winds blowing through the PR industry.
It began with disappointing results from Huntsworth, the biggest UK-based PR group. Overall revenue growth was just above flat for the third quarter but, more worryingly, the group's financial PR division, Citigate, saw a 17 per cent slump in revenue. Another big name generalist PR consultancy also expressed worries to i, with bosses concerned about revenues post-Olympics. It has told staff to immediately tighten belts.
This should be a concern to us all. The British PR industry has increased overall spending for the past eight years and, excluding 2009, at near double-digit revenue growth per annum. This makes it a sector of the economy now worth more than £8bn, employing more than 60,000 professionals. But before we start envisaging the next ice age, we should recognise a complex outlook.
Certainly 2013 could be tougher than 2012, not least because next year will feature no Olympics, no World Cup and no major political election campaign – all of which boosted PR and marketing spend this year. And financial PR is indeed difficult for many. Derivatives trading is down by 20 per cent this year, domestic mergers and acquisitions activity down by a third.
But this is balanced by some warmer winds of change. An industry survey to be published this week will confirm continued growth in spend over the past 12 months. The big PR agencies have also increased their profit margins. This is driven by corporate demand for strong advice to enhance and protect reputations; and by brands that are turning away from traditional advertising and implementing the sort of conversational and peer-to-peer marketing campaigns at which PR excels.
And while some of the bigger consultancies are struggling, there are many exciting small agencies – from Pagefield on the corporate space, to Brooklyn Brothers in integrated PR/marketing – that are showing confidence and stellar growth figures.
The forecast is unsettled but, until evidence shows otherwise, British PR remains a growth business. Moreover it is the envy of the rest of the world.
Danny Rogers is editor of PR Week