"No silver bullet for PR agencies in a year of crisis" - BPRA's annual media conference did not take place
Business development in the PR sector is an indicator of overall economic development in Switzerland. The results of the full survey should have been presented today, Friday, at the annual media conference.
This included comments on fee income and employee figures for the public relations agencies that are members of the BPRA, as well as the causes and drivers of business development. However, the press conference was canceled due to a lack of interest from the media, according to the association. This was despite the fact that the results of the survey, which were then sent out as a press release, revealed some interesting facts:
No silver bullet for PR agencies in the crisis year either
After the market for agencies united in the Swiss Association of PR Agencies (BPRA) had already stagnated in 2008, fee income fell by 9.2 percent in the year of the economic and financial market crisis. This means that the crisis did not spare the PR sector, which had been growing in previous years, writes the BPRA. Although the decline is less marked than in other communication disciplines, the market survey makes it clear that there is no silver bullet for PR agencies through the crisis. This is because there are both winners and losers in all market segments and fields of activity.
The PR industry is confident about 2010. The leading PR agencies in Switzerland generated fee income of CHF 64.5 million in the 2009 financial year with 287 employees (previous year: 297). In the previous year, the figure was CHF 71 million. After several years of constant growth, fee income stagnated at a high level in 2008. This decline of 9.2 percent is attributable to the majority of the
According to the BPRA, the decline in the number of agencies can be attributed to budget reductions caused by the economic and financial market crisis and a generally more volatile market environment. While the largest agencies in particular were able to make further gains in the 2008 financial year and the medium-sized and smaller agencies came under increasing pressure, the PR year 2009 showed greater fluctuations in all provider categories.
The two leading agencies in Switzerland - Farner Consulting and Burson-Marsteller - continued to grow slightly in 2009. The former Trimedia, whose successor organization will operate under the name Grayling from the current financial year, experienced a significant drop in fees. As a result, it fell from second to third place in the agency ranking. Farner Consulting remains at the top of the ranking for net fee income with CHF 14.9 million.
According to Roman Geiser, President of the BPRA and Chairman of Burson-Marsteller Switzerland, the market survey carried out among BPRA and non-BRPA members shows that there was no strategic panacea or no real silver bullet in the year of the economic crisis. Large, medium-sized and smaller agencies or providers with different strategic positioning experienced both fee growth and decline, Geiser continues. These fluctuations covered an enormous range from minus 37.5 percent to plus 9 percent. Although this is painful, PR agencies fared better in 2009 than other communication sectors, such as advertising, emphasizes the BPRA President.
The trend towards increased specialization and the need for size that has emerged in recent years has only continued slightly. According to the BPRA report, the majority of agencies see growth opportunities in the area of digital media (social media, online PR, web services) and in the area of reputation management and trust building. This fact also allows the industry to look to the current financial year with confidence, in which a recovery is emerging. Demand from the energy industry, the pharmaceutical/medtech/biotech sector, politics and the public sector is developing encouragingly.
Per capita turnover, which is important for the profitability of agencies, also came under slight pressure, falling by 6.3%. The fact that the larger agencies in Switzerland that are members of the BPRA continue to have a profitable business model is shown by the fact that their per capita turnover is significantly higher than that of the smaller PR service providers, which offer selected partial services with 1-4 employees. According to projections, these small providers with around 590 employees generated fee income of just over CHF 97 million. At CHF 165,000, the per capita revenue of these small providers is significantly lower than that of the agencies. The BPRA agencies reacted quickly to the market environment by reducing their personnel capacities compared to the previous year.
As in the previous year, there is no pronounced tendency towards further internationalization of the PR business in 2009. The fact that 9 of the 16 leading PR agencies are affiliated with a global network does not change this.
No silver bullet for PR agencies in the crisis year either
After the market for agencies united in the Swiss Association of PR Agencies (BPRA) had already stagnated in 2008, fee income fell by 9.2 percent in the year of the economic and financial market crisis. This means that the crisis did not spare the PR sector, which had been growing in previous years, writes the BPRA. Although the decline is less marked than in other communication disciplines, the market survey makes it clear that there is no silver bullet for PR agencies through the crisis. This is because there are both winners and losers in all market segments and fields of activity.
The PR industry is confident about 2010. The leading PR agencies in Switzerland generated fee income of CHF 64.5 million in the 2009 financial year with 287 employees (previous year: 297). In the previous year, the figure was CHF 71 million. After several years of constant growth, fee income stagnated at a high level in 2008. This decline of 9.2 percent is attributable to the majority of the
According to the BPRA, the decline in the number of agencies can be attributed to budget reductions caused by the economic and financial market crisis and a generally more volatile market environment. While the largest agencies in particular were able to make further gains in the 2008 financial year and the medium-sized and smaller agencies came under increasing pressure, the PR year 2009 showed greater fluctuations in all provider categories.
The two leading agencies in Switzerland - Farner Consulting and Burson-Marsteller - continued to grow slightly in 2009. The former Trimedia, whose successor organization will operate under the name Grayling from the current financial year, experienced a significant drop in fees. As a result, it fell from second to third place in the agency ranking. Farner Consulting remains at the top of the ranking for net fee income with CHF 14.9 million.
According to Roman Geiser, President of the BPRA and Chairman of Burson-Marsteller Switzerland, the market survey carried out among BPRA and non-BRPA members shows that there was no strategic panacea or no real silver bullet in the year of the economic crisis. Large, medium-sized and smaller agencies or providers with different strategic positioning experienced both fee growth and decline, Geiser continues. These fluctuations covered an enormous range from minus 37.5 percent to plus 9 percent. Although this is painful, PR agencies fared better in 2009 than other communication sectors, such as advertising, emphasizes the BPRA President.
The trend towards increased specialization and the need for size that has emerged in recent years has only continued slightly. According to the BPRA report, the majority of agencies see growth opportunities in the area of digital media (social media, online PR, web services) and in the area of reputation management and trust building. This fact also allows the industry to look to the current financial year with confidence, in which a recovery is emerging. Demand from the energy industry, the pharmaceutical/medtech/biotech sector, politics and the public sector is developing encouragingly.
Per capita turnover, which is important for the profitability of agencies, also came under slight pressure, falling by 6.3%. The fact that the larger agencies in Switzerland that are members of the BPRA continue to have a profitable business model is shown by the fact that their per capita turnover is significantly higher than that of the smaller PR service providers, which offer selected partial services with 1-4 employees. According to projections, these small providers with around 590 employees generated fee income of just over CHF 97 million. At CHF 165,000, the per capita revenue of these small providers is significantly lower than that of the agencies. The BPRA agencies reacted quickly to the market environment by reducing their personnel capacities compared to the previous year.
As in the previous year, there is no pronounced tendency towards further internationalization of the PR business in 2009. The fact that 9 of the 16 leading PR agencies are affiliated with a global network does not change this.
