To 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.