T

he 2011 Top 50 Consumer PR consultancies table makes for far more comfortable reading for the consumer PR sector than the previous year’s rankings.

While clients remained cautious about budgets, the majority of agencies saw their fee income swell since 2009, with some achieving high double-digit growth.

Freud Communications remained at the top of the table, with six per cent growth, taking fees to £23.8m. Former number two, The Red Consultancy, dropped to fourth place, after being overtaken by Exposure and Grayling, which secured second and third positions with 15 and 18 per cent growth respectively.

Exposure CEO Raoul Shah says his agency had its best year since launch. ‘That was driven by more integrated campaigns, fantastic growth in the US, and an increased focus on our existing clients, therefore incremental client growth,’ he says.

Edelman increased its consumer PR fee income by 17 per cent to take the table’s fifth spot. Other notable climbers included Four Communications Group with 76 per cent, PHA Media with 50 per cent and Consolidated PR with 72 per cent.

Agency bosses reported that consumer clients were, and still are, increasingly asking for counsel on how the marketing and media landscape will change as a result of rapid advances in technology. Grayling’s MD of consumer brands Daniel Cohen says the main buzz words in meetings are: content, community, influence, engagement and experience.

Consumer PR is perhaps the sector most exposed to the changes in the digital landscape, which allow brands to speak directly to consumers. It is also at the centre of the growing integration of marketing disciplines, with big brand contacts.

Consumer PR agencies have a great opportunity to grab a larger share of marketing budgets, as well as position themselves as the discipline to manage social media – a platform that requires a conversational approach to marketing.

But this will demand genuinely creative ideas and an ability to prove not only ROI, but a demonstrable effect on a company’s business.

Below we take a deeper look at the state of the consumer PR market.

Digital ‘Marketeers finally caught the social media bug in 2010 and advertising agencies woke up to find themselves without a voice,’ says Grayling’s MD consumer brands Daniel Cohen. Other consumer PR heads report that clients now see digital as an integral part of all campaigns and are allocating budgets accordingly. ‘Social media and digital have become less of a mystery to clients. They are committed and are seeking PR expertise to both create it and bring it to life. Virtually every brief now has digital as part of it,’ says Frank PR chairman and co-founder Graham Goodkind.

Exposure’s Shah adds that clients are increasingly asking for strategic digital planning and community outreach as part of the PR mix, no longer as a separate activity.

Word of mouth The importance of creating buzz and word of mouth has kicked in again, says Goodkind. ‘We’re moving away from traditional media PR tactics toward sparking new conversations with consumers,’ says Shah.

This may be due to the impact of social media, which The Red Consultancy’s CEO Mike Morgan says ‘is really turning into virtual word of mouth. Used properly, it can boost the reach, effectiveness and shareability of great PR content.

Marketing integration - Increasingly the role of PR has moved to more of a central place in the brand planning agenda, rather than something that once followed, says Shah. This means PR agencies have increasingly been asked to work with, and pitch against, agencies from other marketing disciplines, says Morgan. Goodkind believes this is because the value placed on ideas has increased:

‘Clients have become less silocentric. They don’t care where the idea comes from, they just want the best ones.’

Client spend - Clients are still cautious about spending and consumer PR budgets were slow to recover in 2010.

Frank’s Goodkind says he has seen a rise in the volume of new business enquiries but that budgets for total spend seem flat or slightly down. Although he argues the net effect is still positive, he warns there may be implications for the profit margin. Things may improve in 2011, according to Freud Communications MD Nick Mulholland: ‘Marketing budgets are beginning to show green shoots of recovery, but clients continue to be cost conscious.’ But clients’ reticence to spend is not a purely financial concern. The rapidly changing media and marketing landscape is leaving clients confused about where to invest. ‘It is as much about establishing what is the most effective channel as it is about economic uncertainty,’ says Morgan.

Potentially, this is good news for PR agencies. ‘The important point is that clients are thinking as much about where they spend their money as how much. More clients are seeing the real value in earned media and as a consequence diverting budgets to help support them,’ says Mulholland. But if PR agencies are to capitalise on this looser divide between marketing disciplines, they need to be able to demonstrate that their work delivers measurable ROI and can genuinely make a difference to a client’s business objectives.

Sectors - Unsurprisingly, technology is the burgeoning sector for consumer PROs. Mobile brands are becoming entertainment platforms and mobile networks are becoming media owners, says Exposure’s Shah. Gaming, for example, has become a mainstream entertainment activity with which companies want to be involved. ‘Brands are now ready to approach gaming and consumer electronics just as entertainment and fashion do,’ says Shah.

Other fertile sectors include health and wellbeing, as well as travel and leisure, and homes and property, which Cohen says showed double-digit growth last year.

In contrast, he identifies food and drink as a sector that is suffering: ‘It is being squeezed, largely due to the cost of raw materials.

Long-term impact - Freuds’ Mulholland says clients are looking for work that has a significant long-term impact on awareness, attitude, brand attributes and, ultimately, sales. ‘Of course this is a given for every brief, but we’re finding that “longevity” is being singled out as a specific and measurable requirement,’ he says.

Red’s Morgan adds that measurable content is the common theme echoing through all briefs. This is also affecting digital work, with Exposure’s clients increasingly asking for work that creates and sustains long-term conversations rather than one-off Facebook pages or microsites, Shah adds.

Live events - Goodkind says Frank PR has seen so much demand for experiential elements to campaigns in the last year, his agency has trademarked the term ‘prexperiential’.

Indeed, Grayling’s Cohen says brands are waking up to the fact live events can provide good content to feed a brand’s online community and connect with consumers. As consumers spend more time contacting each other through social media, mobile phones or email, Shah predicts live events will become an antidote to an increasingly virtual life: ‘Our belief is that the role of human interaction and faceto- face contact will be driven as a counter culture to the proliferation in digital comms.

Enough celebrities - Celebrity endorsements may be a staple of the PR repertoire, but consumers have become more sceptical about ties-ups between brands and celebrities. Mulholland says: ‘Consumers are not daft and even those with the most voracious appetite for celebrity can see when you’ve just “thrown money at them”. That approach is thankfully on the wane because it damages the reputation of our whole industry.’

Digital and direct communication - The evolution of the digital space will remain a key issue in the next 12 months. Perhaps its most powerful impact is the ability for brands to speak directly to consumers. ‘We’ll see less reliance on journalists and more importance on messaging directly from the brand via owned channels,’ says Exposure’s Shah.

Breakdown of PR silos - The changed digital landscape has made it easier for information to spread to different audiences. Mulholland believes this means corporate and consumer PR activities can no long be kept separate. ‘The biggest demand on agencies like ours is going to be about driving social movements that lead to real and long-term behavioural change, regardless of sector,’ he says. Consumer PR agencies are well placed to take advantage of the breakdown of traditional marketing silos. But to do so, Grayling’s Cohen argues: ‘We need bigger and more intelligent thinking with creative that competes with ad agencies.

The return of CSR With consumer trust in institutions at an all time low, businesses will come under increasing pressure over their practices. ‘We’re finding the number of people who refuse to take consumer brand information just on face value is growing,’ says Freuds’ Mulholland. Expect a resurgence of CSR.

London 2012 Olympics - Morgan expects an increased planning focus for brands around the London 2012 Olympic Games. ‘It will soon be the only game in town,’ he says.

Proving the value of PR - Agencies will need to prove their value, meaning measurement will remain a hot topic. ‘There will be an increased focus on consumer PR from the procurement teams. This means margins will get pressured,’ says Goodkind. But Mulholland says: ‘As an industry we’ve asked for this opportunity and now it’s up to us to step up to the challenge.’