Viewpoints: Growing pains in the digital era

In Hong Kong we’re used to asking each other, ‘how’s business?’ and typically responding ‘busy.’ Whether the economy is in an upswing or a downswing the response is always the same. So it’s useful every now and then to look under the hood to see what’s really going on in the PR industry.As a bannerman for the PR agency sector, the annual benchmarking survey of the Council of Public Relations Firms of Hong Kong (CPRFHK) is one of its most valuable assets. Polling both member and non-member firms, agencies large and small, local and multinational, the survey examines all aspects of agency management from staff to clients.For the first time in the survey’s eight-year history, social media equaled media publicity as the most used communications channel employed by agencies. Social media and digital services are expanding agencies’ portfolio of services and are having a significant impact on top line revenue. But it’s not all clear sailing. Unlocking the business potential digital offers can be difficult to realise.Gaining access to digital briefs is a challenge. Client-side, ownership of digital communications is often siloed beyond the responsibility of corporate communications teams, the PR agencies’ natural go-to client contacts. Agency competition in the space is increasingly fierce with PR agencies sparring with digital boutiques and advertising agencies, themselves offering an expanded range of services.[caption id="attachment_131116" align="alignnone" width="600"] Top channels used for client campaigns[/caption] PR agencies are investing to expand in digital, but turning a profit is not automatic. There appears to be an expectations gap agency side to client side on the value of services on the digital rate card. In an increasingly competitive environment, price cutting continues with a third of firms admitting to the practice to win business. This is something the CPRFHK would like to see the back of. As an industry we should be standing firm on fair pay for fair work.The knock-on effect of all of this is on talent, which is always a pain point for agencies. Over 40% of survey respondents reported a staff turnover rate of more than 20%. The agency brain drain to the client side continues, and recruitment remains a challenge, particularly as agency services diversify in the digital era.Charged with juggling this bundle of challenges, it’s no wonder Hong Kong’s PR agency leaders always say that they are busy. The good news is that even in an increasingly competitive environment firms are adapting to new challenges and are growing with a positive outlook for the year ahead. That’s great news for those looking to build their career and for clients who’ve never had so many options for agency support. It’s very much a buyer’s market.The writer is Simeon Mellalieu, partner, client development Asia Pacific at Ketchum. He is vice chairman and former chairman of the Council of Public Relations Firms of Hong Kong (CPRFHK).