PRCA reports slump in new business – is this “an ever-more mature and reassuringly vibrant profession?”


According to today’s PR Week.

One interesting stat was that overservicing levels in agencies are soaring. Apparently 33pc of agencies have reported an increase in overservicing. This compares with 26pc last year.

Says PR Week: "The new business climate has become increasingly quiet, while overservicing of accounts by its members is at an all time high."

Let us remind ourselves what PR Week said back in April: "the fact that 90pc of the (PR Week) top 150 have seen fee income rises year on year is testament to an ever-more mature and reassuringly vibrant profession.”

As I’ve said many times before, increasing top line revenue is meaningless if there is no corelation with rising profits. The PRCA themselves say: "Overservicing at 33pc is unsustainable for most agency business models." (I’m curious to know under which business model overservicing is sustainable).

So is an industry that tolerates this level of overservicing really "more mature and reassuringly vibrant"? Quite the reverse. Overservicing means either a) services are being mis-priced (which isn’t very mature) or b) agencies are too scared of clients to ask for the renumeration they believe they deserve (ie a lack of confidence).

Hence why the debate now being stirred by Andy Lark and others is so important.

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Comments

  1. Discounting, overservice and piss poor profits is a cycle common at many a UK agency.

    Check the Plimsoll reports on the PR sector – there is a cracking story here if someone is prepared to spend the time analysing the data.

    Recognising the issue is all very well and grown-up. But how the hell do you deal with agencies that discount in order to secure business.

    Like

  2. Perhaps some of us should club together to pay a journalist to do the analysis? 😉

    Like

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