Those who are familiar with the Public Relations companies recognize that this industry comprises of organizations and agencies spanning over a multitude of factors. One of which is the annual turnover, based on which, these organizations can be classified into 5 type’s i.e.
- Super Giant Firm/s with an annual turnover above INR 100 Cr.,
- Giant Firms with an annual turnover ranging from 50 Cr. and 99 Cr.,
- Very Large Firms with an annual turnover between 20 Cr. and 49 Cr.,
- Large Firms with an annual turnover between 10 Cr. and 19 Cr. and,
- Small/Boutique PR agencies, with a turnover ranging up to 10 Cr.
Due to the onslaught caused by the COVID-19 outbreak, the journey has become harder for each of the aforementioned companies but the most severely affected will be the Boutique agencies. They already struggle with a lot of factors and face obstacles even in their day to day operations but its during a crisis that they are bound to take the worst fall. Those who are not aware of what makes a boutique PR agency, let me throw some light on the factors that compile:
They are usually headed by sole founders or a duo. These companies are built by either former PR professionals, with their experience varying from one year to any extent, or former communication professionals. Last but not the least category of founders are former journalists who opine they have a fair hand to try in this lustrous green industry.
Founding an agency is easier as compared to the struggle that comes after. Acquiring clients and retaining them is the most difficult part of any business. This is the reason; these boutique agencies welcome clients from any size, any industry, and any background. To begin with, these agencies get their first set of clients who are either brought from the last tenure by the founder himself/herself, or it might be a friend, who is a founder/owner of a startup or an MSME (Micro, Small, and Medium Enterprise).
Furthermore, these agencies are massively dependent either on digital marketing or referrals from current/former clients whereas big agencies usually do not spend massively on digital marketing.
Businesses that could never imagine getting PR services can now usually find themselves in media due to the emergence of these boutique PR agencies. Public Relation is a very expensive service which was only available for the wealthy and deserving few, the ones who had made their mark with the work done by them. Now, with the emergence of Boutique agencies, the scenario has changed, anyone from any background can hire these boutique agencies with a not-so-extravagant fee and can experience the service which was reserved for the deserved.
They usually hire either interns or fresher who are looking for early experience in their careers and want to get first-hand experience in the PR industry. The team size ranges from 2-10 and succeeds this mark rarely. There are no subject/industry experts in these agencies, and consequently, employees are drowned with work pressure and deadlines. Henceforth, only self-learners and strong-willed people can survive and thrive in the boutique PR agencies. Many times they provide one of the best industry exposure possible to an individual.
Novel COVID19 Outbreak:
The catastrophic effect of the Coronavirus pandemic has permeated every country and every industry in the world. The result of this endemic is certainly going to showcase its result on the Public Relations industry as well. Super Giant Firms & Giant Firmsmay easily survive the humungous impact of Corona owing to their vast capital reserves and available resources. There will be casualties for sure, but the wounds of these large organizations will heal. Similarly, midsized agencies too would survive but with severe casualties and they might need to furlough or lay off their people depending upon client retention during and after this period. But, the difficult journey is now made even harder for the boutique PR agencies.
They were massively dependent on small businesses, food retail outlets, startups, and MSME owners. Considering the current situation where the country is still covering from lockdown and navigating its way back to normal. On 23rd May 2020, RBI Governer, Mr. Shaktikant Das, said, “Given all these uncertainties, GDP growth in 2020-21 is estimated to remain in negative territory, with some pickup in growth impulses from H2: 2020-21 onwards.” If rumors are to be believed, when the businesses will not be able to sustain in this environment, there will be a recession. Many business have been already forced to lay off their agencies, and subsequently, these boutique agencies will be forced to lay off their employees as well. Only the cash-rich agencies & businesses can survive a few months, but the boutique agencies and their employees are looking for tough times ahead.
Agencies need to ensure and speak in a clear way with their clients well in advance to draft a contingency and survival plan. If a client sounds uncertain, takes it as a no and starts looking out, don’t wait for the official notice or else, you will be forced out of business very soon. Similarly, if you happen to be one of the employees of a boutique agency, my advice to you is to be ready for the battle ahead. Sharpen your skills, sign up for a course, speak to your seniors and colleagues, reach out to your friends in the industry to catch hold of the scenario. You have to be ready with a backup plan in case you are asked to leave due to the current economic condition.
This article is authored by- Vineet Sharma, Senior Associate – PR & Client Servicing, Ketchum Sampark.