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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As the owner of my own boutique PR agency, and someone who has been extolling the virtues of why PR agencies need to embrace social media for a long time now, the current financial climate hasn’t affected me.
I very rarely conduct what would be classed as “offline PR” now – my work is predominantly with the online field, and this continues to see me through situations like the one we are currently in.
That’s not to say that I will ignore offline branding – but at the same time, the very fact that online PR and social media opens up a truly international client base cannot be ignored either.
http://dannybrown.me/social-media-pr/
Good work, Todd. I agree with most comments, particularly re: demonstrating ROI and that SM is a way to supplement coverage through traditional media channels. I would just add that SPEED is now important. We need to get together with clients and C-suite execs NOW to introduce the SM discussion and position ourselves as part of the indespensable “survival” team. We’re in an econ crisis – not the time to ditch the PR partner. Perhaps scale back the program, yes, but not ditch.
Jen
If anything I think the economic downturn will force agencies to demonstrate a real and measurable return on their marketing efforts, particularly on the digital and social media front. In the end we may see a “weeding out” of agencies that can’t make those connections and prove real value to their clients. Those that do will weather this storm and prove to their customers why a recession necessitates a strong communications and marketing plan, not a budget cut.
The biggest challenge for agencies/consultants: we can offer strategy for a client, but can’t implement all aspects of a social media program for them. They need some in-house ownership.
Proving the balance makes sense (that they need to invest in-house but still rely on an outside expert) gets more interesting in the current economic environment. Way too easy for companies to drop the agency (or the in-house resources), and for the program to fail.
While many SM tools are free, the time to manage them is not, and ROI is less defined than in traditional marketing.
During the dot com bust, I was busy building websites for corporations that still had millions to burn on their online presence. The big projects were fewer and farther between, but they didn’t go away. Meanwhile, the firm I worked for, Sapient, shrunk to a shadow of its former self. They are still on the comeback trail as far as I can tell.
This time around, I expect to see budgets shrink, but the marketing mix will change to include a higher proportion of more cost effective forms of communication. For example, sparking an information cascade among bloggers has been proven (at least to me) to be exceedingly cost effective. I hope my clients see it that way, too.
I also take heart in corporate layoffs. Marketing departments are often eviscerated at times like this, yet campaigns still have to be conducted. That’s typically a boon for agencies and free-lancers (former employees).
Smart agencies should steer clients towards Social Media not as an experiment, but as a proven tactic.
Do I think that Social Media can save agencies? No, not at all. It’s just another service to be sold and that decision is in the hands of the buyer.
@Anya is right, it’s about measurability… traditional PR agencies should get their hands on the best SEO (specifically off-page link building) and social media marketers and bring them in-house.
SEO and PR are merging anyway and SEO is going to be less prone to cuts because you can demonstrate measurable ROI and extremely low customer acquisition costs.
If I owned an PR agency, I’d be looking at acquiring an SEO agency ASAP. I don’t think you have time to build this…
Social Media is both a tool and a mindset, and conflating the two tends to lead to poor budget decisions.
Used correctly, social media provides a great return on investment when added to traditional online marketing means.
That’s where the opportunity lies for the client. Cutting a $100,000 budget to $50,000 and adding $20,000 worth of social media can provide the same or better results to a client.
That’s still $30,000 less than was spent for the vendor and for advertisers.
Our struggle will be finding/training enough people skilled in social media who understand how to create and track those results.
Most “consultants” already struggle with selling projects, because they lack metrics or a solid background in integrated marketing.
Expect small agencies and individuals to do very well, and big agencies and single channel firms to make big cuts/go under.
The only ones who will use social media to whether the storm are the ones who get it. In the PR field, that’s not many. Sad, but true.
Social media won’t help PR weather the storm any more than having a Cision media database account will help PR weather the storm.
The smart people who can use social media to deliver cost-effective results will weather the storm. The hucksters who push the “next big thing” will hopefully be shaken out by the turbulence.
It’s encouraging to know that this economic downturn is forcing companies to re-evaluate the way they are marketing themselves. It will pay off big time for those willing to “go there.”
@Todd: On a personal level I’m not letting these tough times get the best of me. In fact myself and a few friends are launching a web startup called Nectar http://tastynectar.com/blog in 27 days. We’re praying for the best.