Recession. It is deep and broad and more likely than not to grow before we see a plateau and the beginnings of a recovery.
Unemployment, nationally and in Nevada, is growing. In Nevada, December unemployment exceed 13 percent and nationally, the jobless rate stands at 10 percent. Consumer spending is increasingly frugal and discerning and in Las Vegas we are seeing an increasing number of shuttered businesses and one of the highest personal bankruptcy rates in the nation.
This environment didn’t occur in the past month. It has been building, as we’ve said in A Stern Glance, for nearly two years. As such, it remains a surprise how many companies are now paying the price for following ineffectual communications counsel and strategic planning over the past year.
In terms of strategic communications, public relations, marketing communications, whatever your characterization may be, the economic environment is now a crisis matter and calls loudly for a crisis communications approach.
A startup or early stage company that has a strategic or technological edge but a thin PR budget can communicate effectively in this enviornment if its communications function, whether internal or an agency, is innovative, resourceful, tech savvy, and not wasteful.
Unfortunately, many companies simply don’t have the knowledge required to select that function appropriately. The focus is on “ink.”
As our economy stagnates, companies must reassess communications practices and strategies if they are to remain competitive in a challenging marketplace. They should be questioning whether their current communications effort is using less experienced or junior staff, if the agency is truly strategic or simply uses outdated communications tactics, e.g. a plethora of non-strategic and shot gunned news releases, events with little or no objective that would impact revenues.
The current economic environment is one where, in most cases, clients can now get more for less by eliminating many traditional agency inefficiencies like rigid 12-month retainers, the marking up out-of-pocket expenses and outside vendors, and under qualified junior agency staff that is uninformed or wholly reliant on “traditional” communications tactics. For example we frequently see Nevada public companies making material disclosures on National basis, when a state dissemination through a release dissemination service fulfills regulatory disclosure requires and is broadly disseminated through the Internet. It is a cost difference of thousands of dollars that is frequently overlooked by traditionalists.
Economically, astute companies will outsource strategic communications to battle-tested veterans who can pick up the slack and provide services on a smaller, flexible scale; developing and executing the strategic approach while leaving tactics to their internal communications functions.
Experienced strategic communications professionals bring core competencies that enable them to do a better job in less time, thereby reducing costs and maximizing results. These smaller agencies, virtual PR teams, and individual practitioners are a growing alternative for companies of all sizes, especially those with small public relations and marketing budgets. Like their clients, these outsources have to work smarter, faster, and cheaper.
Periods of economic challenge force companies to reassess their outreach strategies in order to be substantially more nimble and dynamic in their approach to simply retaining market share, to say nothing of increasing it. For a small, development stage or emerging growth high or biotech company, is retaining the services of a large agency a prudent investment, especially in industries, where virtually every communications decision can affect millions of dollars?
Large agencies have many overhead costs that must be passed along to the client, and large agencies generally require larger retainers to make sure financial goals and obligations are met, as well as utilize less experienced or junior employees.
Boutique, or smaller agencies find ways to efficiently service smaller clients and produce results. For many clients, outsourced strategic, as well as marketing communications has an economic rationale even in a strong economy.
As we said at the outset, we are in a period of economic challenge, especially in Southern Nevada. Companies work leaner, fighting more intensely for market share and reducing their budgets to derive the cost efficiencies required to battle their way through this environment. Read the rest of this entry »