Will Social Media Help PR Weather the Storm?
When I talk to my PR industry colleagues, there’s a fair bit of trepidation about all the economic woes.
We’ve been here before. We’ve seen the bloodletting. We’ve seen corporations slash marketing budgets at the exact moment when they should be pushing more of their chips into outbound efforts.
In fact, the Harvard Business Review noted earlier this year:
“It is well documented that brands that increase (marketing) during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.”
Still, sure, we all worry about the headlines. Even the marketers who know better can’t seem to resist cutting their budgets (as seen in the graphic above). No one will be immune from a truly vicious economic hit.
Smart agencies took a hint from the last downturn. For our part, having been founded in the fiery ashes of the Dot-Com Debacle, much of our own strategic planning has gone into hardening ourselves for the next recession. And meanwhile, I can’t help but wonder:
Perhaps Social Media will provide some additional protection for forward-looking PR agencies?
A recent CMO Study by Epsilon (covered in MarketingVox) provided some insights that support this hypothesis. While 2/3rds of the CMOs acknowledged that the recession will ding their budgets, “digital marketing” was a bright spot:
- Social computing (including word of mouth, social networking sites, viral advertising, etc.) was the most popular emerging channel with 42% of marketing executives expressing interest in adding it to their marketing mix.
When the going gets tough, the tough start talking. Despite the recessionary climate, most of the marketers surveyed viewed Social Media as a worthwhile addition to the mix. They know that now is the time to rally and reassure customers and prospects.
That’s the critical factor to remember about Social Media: it is not only helping brands spread the word; it also helps the brand to shore up support among its current customers.
The agencies that survive the coming crapfest will be actively helping their own clients realize the benefits of socializing through the recession.
How about you? How are YOU feeling about the economic news? Do you expect it to affect you and/or your agency?
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End of the day Social Media is just a tool, how it is used is what makes the difference. There are good campaigns and there are bad. The storm will be weathered by agencies that understand how to deliver value to brands and their clients.
Agencies who offer corporate reputation repair should do pretty well. Litigation PR should also do well.
Excellent work Todd! Those companies who intentionally pull themselves from the radar screens of their existing and prospective customers will find themselves absent from the decision making process.
Reducing or eliminating costs on strategic marketing, whether it’s traditional and/or social, fills a void that prevents competitors from enjoying a frictionless insertion into the decision making process. Industry leaders are forged during economic downturn as these conditions create new opportunities to cost effectively earn market share and cultivate new relationships – using the tools and channels that mirror their customer’s activity.
Todd — I think that a solid expertise in social media will be an advantage to any agency during the current and future financial crisis. The more you know and can do, the better of you will be.
However, I honestly do not think it will make that big of a difference. From all appearances, we are headed for an economic decline the likes of which none of us have ever seen. Because of that, social media expertise or no social media expertise, I think we are all in for one rough, tough ride.
Todd
do you have any examples of companies using social media to shore up their customers?
Social media is cost effective; question is where will PR agency role be related to their ability to get a profitable price for their services.
Great ROI today on social media for CMOs is the tens of thousands of dollars of free advice they can get just from participating in social media. Ah Ha! now that’s a cold slap in the face I tell ya.
On the less controversial side, social media allows companies to navigate around general news cycles and topics if necessary to their brand.
Given further divisive nature of news camps, especially in cable, social media can supplement coverage through back channels.
All the best Todd. See you at SNCR Nov 14 I hope
It’s now more important than ever for PR/Marketing firms to prove value and make themselves completely indispensable. All PR/Marketing efforts should directly relate to increasing the bottom line and tracking this will prove great value.
@Dave – I am not sure I agree that Social Media is “just” a tool; I think it represents a change in mindset and strategy that is too little understood my many marketers … thus, smart agencies can – as you say – offer real value on this front.
@Mel – I hope you are wrong!
@Mark – Off the top of my head I would point to Dell, Comcast, H&R Block, RealNetworks, etc. And these are brands whose primary approach is to engage in-house community managers. There are other who take a more creative, outbound approach as well.
Todd
I started a similar discussion on LinkedIn, with some interesting responses.
http://www.linkedin.com/answers/marketing-sales/public-relations/MAR_PRR/333850-26769689?browseIdx=0&sik=1223309874221&goback=%2Eamq
I agree with those in the comments section about it not making a difference. What matters is the relationship and the quality of your work.
My boss just wrote a post on being visible during economic hardships. He knows a thing or two as he came to set up shop in the 80’s during the downturn then. http://www.piercom.com/now-is-the-time.html
But it’s true. The little you do during a hard economic time for everyone, can pay off. While others hold their PR spending, some use it.
Even still, PR firms that keep a good relationship with a client that go away during the lean times should feel confident that they’ll come back when things pick up again.