Bubbles need not apply

“Bubbles need not apply…” emphasises the recruitment pack of the Lexis PR agency. I had no idea what they meant when a mentee from my alma mater showed their excellent guide to me (to my mentee, however, the meaning was obvious, so Lexis are ‘on the money’).

Presumably hoping to attract the cream of the crop, Lexis is indicating that this character, shown on the right, from the BBC’s ‘Little Britain‘ comedy show represents the worst perceptions of the public relations profession. I understand that Bubbles spends her every waking moment being pampered and preened in a health spa.

It’s an ironic perception, because the media relations industry is far from pampered. Competition is brutal, work processes are often primitive, working conditions are often poor and barriers to entry are low. The mainstream of the industry is hugely unattractive, with a few larger groups probably making more profit from treasury operations and real estate than from core operations.

I’ve had a few sharp reminders of the harsh industry environment over the last month.

  • Plimsoll, which analyses the 1,000 largest PR agencies, told me that half are suffering falling sales and one quarter are trading at a loss. Its financial analysis now rates one in seven as ‘Danger’: principally those who are overtrading and with deepening debt. Only 9% of firms are growing at the 20% growth rate that was the normal aspiration a few years ago.
  • Kensington Group, which my colleague Efrem Mallach was CEO of until 2002, seems to have finally closed its doors.
  • Sunesis, the analyst outreach unit of Insight Marketing, has laid off two of its four staff.

As Tolstoy once observed, “All happy families resemble one another, but each unhappy family is unhappy in its own way.” So it is with communications consultancies. They fail for different reasons, although there are some common trends. Because there are low barriers to entry and a low minimum economic scale, price competition is harsh. Higher quality providers (which both Kensington and Sunesis have been) face stiff challenges to prove the value of added quality: some competitors will price below cost to win market share and to erode the profitability of incumbents; others will deliver lower quality if the client can be tempted enough by the lower price.

All of these trends look likely to sharpen in the year ahead. Lighthouse is in a slightly stronger position than most. In 2004 we deepened our focus on measurement and evaluation and withdrew finally from our orginal niche which now has the most price-competition: organising outreach to analysts. In 2005 we continued that trend, withdrawing some services in order to focus on fewer. That’s been successful, and we’ll continue that strategy on 2006 accordingly.

P.S. I had a lovely comment from Hugh Birley, Lexis’ chief executive… “we are still doing 20% growth and sensible margins – perhaps because Bubbles doesn’t work here!”

P.P.S. A disturbing article in PR Week reminds us where these illusions come from. One PR agency’s staff development budget is being used to send two women on pole-dancing classes. The CEO is quoted as saying that the agency “won’t be paying for their thongs”. Could it be anything other than the agency which has pitched this story to PR Week? And could it be anyone other than the CEO who thought up the idea (for, if not, would it not be one of these women interviewed by the magazine)? If this is, indeed, the brand position that this agency is attempting to occupy then it’s a horrible reflection of everything that is bad about the industry.

Duncan Chapple

Duncan Chapple is the preeminent consultant on optimising international analyst relations and the value created by analyst firms. As the head of CCgroup's analyst relations team, Chapple directs programs that increase the value of relationships with industry analysts and sourcing advisors.