Public Relations Client Spending 2009 Analyzed and 2010 Forecast

Posted on November 30, 2009

Will PR For Love

Guest Blog

Rumor has it that when Christ was born, John Tsantes organized the press conference. While I can’t substantiate that, I can confirm that John, along with his staff, has been the go-to-guy for deep tech PR for as long as I can remember.

Currently, John is the president of Tsantes Consulting Group. However, his former agency, Tsantes & Associate, which was acquired by Porter Novelli, had an impeccable reputation, too. That was why 10 or 15 years ago I eagerly applied with them when they had an account executive opening. My hopes were peaked when I was called for a phone interview, but they were soon dashed when I didn’t get a call to come in and impress them in person.

However, I don’t hold a grudge. (In an unrelated note, be sure to look for my next blog post, “Is John Tsantes The Most Dangerous Man In America? Why Hasn’t The FBI Taken Action?”

It is a little surprising that during the years I was practicing deep tech PR I never had the opportunity to meet John. It wasn’t until recently that John and I met virtually on Twitter when we exchanged tweets about the future of client agency spending. It was then that I had the pleasure of getting to know him a little. John was kind enough to compile his comments and insights in to this guest blog, for which I thank him.

–Steve Farnsworth

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Public Relations Client Spending 2009 Analyzed and 2010 Forecast

By John Tsantes, @jtsantes

Over the past 18-24 months, many technology-based companies have all but stopped spending money on marketing and PR. Advertising was the first to go followed by aggressive (and costly) marketing programs and, later, PR.

Today, those that are considering PR want $20k/month worth of services for $10k, and all the research that goes along with it thrown in for free. Although I had expected a business up-tick (more spending, that is) by the 3Q09, it hasn’t happened. Most of these deep-tech companies are stuck in what I call an “emotional recession.”

Indeed, companies are not doing badly. Their product-demand pipeline is starting to build, lead times are increasing and factory inventories are low. But they are stockpiling cash instead of spending even modest amounts to a) position themselves against their competition, who also are not spending, and b) to continue to grow in this new age of social networking. Many don’t know what to do from a (social media) PR perspective and believe that it is an altogether new world out there when it comes to marketing and communications. They’re partly right and partly wrong. They’re sitting on the fence.

Getting Unstuck and Back To Basics

The real problem is that most can’t get unstuck from their (emotional) recession even though there are positive signs with the economy. In talking to half a dozen of them over the past three to four months, it seems that they want to get unstuck and move forward. More important, I’ve determined that what they seem to really need is “PR 101” types of programs with social-media activities thrown into the mix.

The good news is that many companies understand that it takes time to build their social channels and are willing to wait (somewhat) for it to evolve. Meanwhile, the more immediate task at hand is to bring their awareness level back up to pre-Web 2.0 levels. Indeed, most emotionally recessed companies almost need a re-launch to undo the 18 to 24 months of fence sitting.

Those suffering from emotional recession include the firms that still are trying to position and message using “speeds and feeds,” and with mass mailings of press releases that usually go unread by the media, but which do show up on Web “alerts.” It’s important to note that many technology-based companies embraced new media channels early to complement traditional PR programs. I refer to a host of Web 2.0-savvy companies that want to stay ahead of the competition. Most of these never really stopped marketing communications activities…they merely cut back spending.

Just as I saw signs of evaporating PR budgets in 2007, I see positive signs as we move into 2010. Indeed, once more companies come out of hiding and realize that strategic thinking, not “clicks,” will serve them better in this new era of communications, that realization will reinvigorate PR budgets and overall spending on marketing communications.

The Good News

Looking into my crystal ball (a combination of experience, gut feeling and industry G2), I think PR spending will increase gradually throughout next year. Conversations I’ve had with a number of execs and their communications folks in deep-tech companies and my own network of PR agency principals indicate that they will increase their budgets by five to 10 percent in 2010. But that increase comes after their 2H08/2009 budgets had been slashed by up to 90 percent. Thus, an overall growth metric is hard to predict and perhaps not meaningful for all practice areas.

The good news is that many companies with no 2009 budgets seem to be putting together modest plans. And these plans combine seminal PR programs with nascent social media activities — new to many deep-tech companies. So, there should be a renewal of PR opportunities in 2010 for both consultants and full-service agencies. I can’t speak to other practice areas, but I think increased PR spending in the deep-tech arena will come from three areas: “trusted guest blogger” opportunities in on-line trade media; content creation and placement for all on-line media (articles, viewpoints, etc); and what I call “vision” content for the business media: More specific, what’s the next technology ladder that will lead to overall industry growth

Last But Not Least

This last area is perhaps most important, not just for companies wishing to reposition themselves as they exit their “emotion recession,” but to reinvigorate commentary and discussion on where we are going as an electronics industry. What is the next “thing” that will drive innovation, create market opportunities and, more important, create real growth as we move forward. It will be easier to get a business writer’s attention if you predict where exactly we’ll be in three years and what will get us there, than sending made-for-the-spam-file news releases. But that is the subject of another post…

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