Lower cost alternatives like…public relations!
“Madison Avenue is fastening its seat belt as the cascading effects of the financial crisis begin to hit the advertising economy,” wrote Stuart Elliott in the New York Times this week (it was also reprinted in the National Post). “As consumers suddenly cut back spending on everything from cars to clothing to cold cuts, companies are reducing their ad budgets or shifting to lower-cost alternatives like e-mail marketing and public relations.”
Maybe that’s the only good news we will receive this week.

PR practitioners, many of whom are enjoying enhanced business opportunities, must be grating on the nerves of industry outsiders with their casual approach to today’s market meltdown. Crises, shutdowns and layoffs can often provide work for PR experts—just as journalists thrive on negative events.  While other sectors are pummeled by the one-two punch of inaccessible credit and decreased consumer spending, communicators still see opportunity. Such is the PR game, where tough times for others can reap big rewards for savvy strategists.

Businesses can’t simply stop talking when profits are down. Regardless of the message, companies need to articulate it clearly, using the right tactics, reaching the proper stakeholders. PR is thus needed at gloomy company announcements as much as it is at celebrations and positive news. Opportunity is always abundant with the right positioning and good news judgment.

Communications, however, is far from “recession-proof.” PR prospects are certainly out there, but the approach necessarily changes when profits are down. What remains important? Knowing where opportunities lay, what venues are no longer viable and which audiences remain relevant. Do people buy luxuries during recessions? Not really but they do go to movies and eat at McDonald’s (which just announced strong results, while Starbucks’ profits dropped).

Here are some helpful pointers to set you on the right path:

• Contract Work is In – Reduced budgets mean large, long-term retainers are unlikely in many companies. Short-term, one-time projects are increasingly available, especially during crises situations. If you were ever planning on heading out on your own, now – ironically enough – may be the time.
• Internal Communication is Key – When companies face hard realities, their employees do too. The need to communicate effectively within organizations becomes especially necessary in the instance of layoffs (such as is happening at Canwest now), pay-cuts or hiring-freezes. Leverage your practice toward these areas, showing clients that your external PR successes are only half of the equation.
• Public Sector Pays – In bad times we are all Keynesians; governments will start pumping money into job-creating public works projects as unemployment rises. This investment can prove costly and     contentious despite its benefits. PR expertise will be needed to broaden massive government spending’s appeal.
• Diversify Your Portfolio – Balance investments – and client portfolios; loading up on clients in one industry is asking for undue risk. If you mainly deal with resource companies, try to land contracts with a retailer or entertainment firm. Depending on your experience, this may be unrealistic; however, any hedge you can afford against overexposure can’t hurt.

Lastly, get out there and hustle. As you’d advise clients to step up their marketing efforts and ramp up PR, who are you to retreat? Now is the time to invest for your business’ future. It can’t last forever, the experts say but it might last for a while. Be ready; don’t stop thinking about tomorrow; create your own strategic plan for a post-recession Obama economy. That starts January 20.

Tags: ad agency layoffs, Downturn, PR, recession, Writing