How to cut 50% spend on public relations

sale-header-1To paraphrase that old saying about advertising, is it possible that organizations are wasting half their PR spend?  In the face of plans by many governments – such as the UK and Italy – to cut their communications budget, how should the public relations industry respond?    Here I share some of my thoughts – and a suggestion from Toni Muzi-Falconi.

In the UK, the public relations professional bodies have not yet mounted any defence of existing communications spend, nor suggested strategies to guide those faced with making the cuts.  Already we have seen announcements that certain non-government organisations or particular campaigns will be chopped, and it is likely that tens, even hundreds, of communication practitioners will lose their jobs.

It appears that the knife is swinging indiscriminately with the usual strategy of looking for savings in individual functions with easy cuts coming from reducing headcount and cancelling contracts with external consultancies (who in turn will make redundancies).  Ideally a review of the success of previous projects could be used as a basis for strategic cuts – if the PR functions (and/or their consultants) have undertaken a robust analysis of results on which to make such decision (and I don’t mean advertising value equivalent figures).  Even more essential, would be the ability to look at objectives set for strategic PR operations and whether or not these had been achieved (and if not, why not).  That could give a guide to what approaches should be sacrificed and which saved.

Simply cutting junior staff, or more expensive senior ones, lacks any strategic merit.  Professional development and career planning methods should inform budget reductions.  What assessment of competencies, skills, potential and so forth has been previously undertaken?  Many organizations simply pay lip-service to appraisals, which means they have no real data on which to consider the best way to restructure personnel.  Likewise, few PR staff probably have defined career plans, or have looked at what return on investment they offer to fight their corner.

It is also essential that any review is not undertaken within communication silos – nibbling from PR here, advertising there, a bit off public engagement initiatives, chipping away at internal communications or taking a slice from social marketing – or chunks hacked off each area.  Integrated communications has to come into its own when trying to maximise resources.  Yes, PR can appear to be more cost effective than the big advertising-led campaigns, but that isn’t a universal rule and it is important to be clear about when each tool is best used alone or in conjunction.  The answer cannot be simply a shift to social media either.  It may look cheaper on paper to set up a Facebook group or Twitter the latest news – but without understanding what needs to be achieved, and whether this approach is appropriate, money will be wasted.  For example, targeting young people through social networking sites might seem a good idea – but do you know how they feel about such initiatives.  A recent University dissertation that I have supervised showed that teenagers are cynical about government and businesses in this environment.

Although best practice studies and analysis are useful in underpinning budget cutting exercises to identify our wasted 50% – we should also remember the 80:20 rule.  It is likely that 20 per cent of our activities actually delivers 80 per cent of our results.  The actions that are most successful are often not those that are planned – or require a large budget.  In my own career, the times I have felt most efficient have been when I have had few resources, but did have the ability to respond to opportunities, be creative and act fast without layers of bureaucracy or approval processes.

So my four recommendations are (1) set clear objectives to guide what activities need to be undertaken – or cut; (2) use career planning to manage any need to reduce team size (3) take a holistic view across all communication related functions and (4) cut bureaucracy to allow flexibility to respond to emerging opportunities.

Do you agree?  Is half of PR effort being wasted – or at the least, could you identify how to cut by 5 or 10 per cent if asked?  What are your tips for successful budget cutting?

Should the wider PR industry take a higher profile in this area?  That’s a suggestion from Toni Muzi-Falconi who has also been thinking about this challenge:

The Italian Government, similarly to other European governments, has issued a decree to reduce its expected public deficit in 2010 and 2011 to 3%.

The net to be achieved amounts to some 24 billion euro, most coming from savings in the public sector, others from a clamp down on tax evasion, a long time favourite sports of my compatriots.

Personally, I am afraid this move will have the effect of an aspirin and only delay by a few weeks/months the spasms that will be really necessary to allow Italians to finally acknowledge and grasp the ‘discontinuity’ that Europeans need to go through in the next 2/3 years, as the shifts in the global economy might partly stabilize given the rising economic, social and democratic expectations of people living in the BRICS.

Yet, the eyes of many (international organizations, rating agencies, hedge funds etc..) will be very carefully following what happens to the Government decree when it will reach Parliamentary discussion next week.

Amongst the 56 articles of the decree, a few explicitly call for a 100% cut of sponsorship, an 80% cut of all forms of consultancy, public relations, conferences, events and contests, and a 50% cut of all training expenses by the public sector, believed to be the major market segment of any single one of those activities, and specifically counting some 60% of the 100 thousand plus professionals operating in public relations in Italy today.

Although cuts in these areas have been decreed more than once in last decade but with little if any effect, this time – and for the above mentioned reasons – it is probably going to be different, even if the actual application of those cuts will not be easy as it seems.

Of course the tension within our professional community here is substantial.

What is interesting to note is that prominent members of our PR community have begun (jump-starting the application of the Stockholm Accords?) to argue with the professional associations of all the disciplines which fall under the decree’s axe, in order to reach a coherent positioning in what our overall efforts to modify the decree in Parliament will amount to.

Basically the idea is to:

a) recognize that it is more than likely that in the public sector (as well as in the private or social sectors, for that case) at least 50% of the expenses in those activities may be considered a waste (paraphrasing from the famous line attributed to many a CEO related to advertising) and not an investment;

b) insist that this is a tremendous opportunity for professionals to argue the real value of their trade;

c) form a joint task force of serious professional organizations which will offer (cost free for the State as for the local public sector organizations) timely advice to single organizations, highly diverse one from the other, so that – the final economic saving result remaining equal – rather than indiscriminate horizontal cuts each organization wanting to benefit will be able to select with some rationale where to cut and where not to cut;

d) of course, this ought to be allowed by the final text of the decree, and this is where the rationale and forcefulness of our joint advocacy effort will be tested.

Toni has promised to keep PR Conversations updated on the progress of his suggestion. Please let us know your views on this or any other challenge of reducing PR spend.

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9 Replies to “How to cut 50% spend on public relations

  1. David – I think you are right in terms of the opportunity that cuts present but building relationships takes time and may not be readily seen to be adding value as more flashy campaigns. Which means objectives and evaluation must highlight the purpose of PR in terms of relevant relationships and involve closer working with other functions which may actually have primary responsibility for those relationships.

  2. The cuts will happen. The reality is that big government expenditure foisted on our children is not sustainable.

    But what a wonderful opportunity. Now we are free from the dead hand of public sector corporatism, can take advantage of transparency and build on the true values of society to build relationships.

    The argument that this will cost jobs is a myth.

    If there was a job there in the first place, it has not gone away. It may mean that it has different shape and form but it is still there.

    The big issue now is to find where it has gone and grasp it. Quickly before someone else gets it.

    This is a good time for people who really do understand the value of values and especially how they are at the core of powerful relationships.

    1. very very interesting. Particularly Romeny Marsh’s comment:
      BUT it is a known fact that consultants are only hired to say exactly what the hirers wanted them to say, but could not say it themselves. All consultants are simple leaches.
      I have the idea we thoroughly deserve this……..

      1. Toni – just to say that Romney Marsh is a place not a person! We do have some very amusing UK place names though. In my village recently a play was performed where all the characters had names of local places – many of which are quite odd. For example, I live near three villages collectively called the Wallops…

  3. It is definitely vital for PR practitioners to grasp the nettle of evaluation and other core aspects of management that other colleagues use to demonstrate their effectiveness – and I’d look well beyond the communications functions/consultancies for models of behaviour to emulate.

    As well as looking at how we evaluate what we do, PR practitioners need to go further and be sure that the way in which they achieved their objectives (especially outcomes) was the most time and cost efficient. Not only do you need to demonstrate that you will achieve (or have achieved in retrospect) specific outcomes with your planned campaign, but that these outcomes could not have been achieved with a less costly (time and money) programme. We need to be thinking smarter not just cheaper.

  4. The debate is raging in my country …while sponsorhip specialists say that pr is fuff, …pr’s say that management consultancies are fuff ….and trainers say that both management consultancy and public relations are fuff.

    I visited yesterday a political appointee from a minor city and he mentioned having just been lobbied by a event organizer telling him that if he only put all his money on organizing events he would surely be re-elected….while the consultant was willing to risk doing it for free in case of non relection….
    The game is getting tough, as you see, and the least of worries is to bring value to the citizen whose tax money is being spent…

    Grateful for the tips fron Heather and Catherine.
    Paritcularly fond of Cathy’s approach as it applies equally to any organization, any professional discipline and which could certainly be the basic guideline of our proposed task force.

    Let me just reiterate the if we learn to apply this correctly (i.e. if we begin to teach these things in universities and professional development seminars) the distinction between evaluation and measurement; the need for each single activity to have defined objectives and kpi’s, these drastic cuts which we face today will not be necessary any longer because ‘cutters’ would not by default turn to pr whenever cuts are needed….

  5. Heather,

    Many practitioners will struggle with your first question simply because their organisation does not have a robust measurement and evaluation system in place, so they have very little idea as to whether the work they undertake is effective or not. Trouble is, there is no excuse for not having such a system in place as the tools and techniques for implementation have existed for many years, so those responsible for running consultancies and public relations departments only have themselves to blame in this regard. Rolling from one tactic to another might make a department look busy but doesn’t demonstrate the value of the work undertaken.

    Evaluation of outcomes, aligned with measurable business/organisational objectives, designed to move the organisational-stakeholder relationship forward is the only way to consistently demonstrate that the work we undertake has value for all involved. The other consideration that most frequently fails to make it to the discussion table is the difference between measurement and evaluation. A measurement provides you with a fixed unit – e.g. how long is a piece of string – while the evaluation provides you with the significance of the outcome – e.g. how well did my string tie up my shoes; was it indeed the right string for the job; would an elastic band have been better? The measurements provide us with some of the material we need in order to conduct the evaluation of the outcomes we set out to achieve.

    If practitioners do not operate a robust system, then they are – and it pains me to say this – probably going to face the type of cuts you outline as there will be very little evidence against which they can prove their worth. If evaluation processes are in place, then any cuts can be readily identified against activity that is not proving effective. Indeed, good practice would be to alter, adjust, reduce or increase activity against your evaluation as you go along – not just wait until someone, somewhere believes there is fat to be trimmed.

    Strategic programmes, properly evaluated are rarely wasteful. Maintaining lean, effective strategic operations demands excellent evaluation procedures, so that when there is a marathon to be run in dark streets in dark times, participants are fit and able to stay the course. The irony is, of course, that during darker times, the need to communicate more effectively, foster understanding and sustain essential relationships is more important than ever, so by not evaluating and appearing ‘trimmable’ practitioners have pretty much shot themselves in the foot.

    So second question – briefly. In the absence of an already ‘fit’ department, I would run an immediate audit on all activity, look closely at the organisation’s required outcomes (and help them fix those if none exist, which is often the case), then revise, reboot and implement a public relations and communications strategy robust enough to demonstrate it can add value to the organisation’s ability to operate in straightened times. I would also balance this against what I have always called my ‘silence report’ which looks at the cost *not* communicating would have on the organisation and its licence to operate.

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