In the annual StevensGouldPincus Best Practices Benchmarking Survey, it was discovered that PR agency profitability in America was 18.6% in 2011. This number is 3% higher than it was in 2010, and it is 5.1% higher than it was in 2009 when it was 13.5%. If you factor in the 15.6% in 2008, which was preceded by 19.7% in 2007 (pre-recession), you can see that profitability has not recovered since the recession happened.
On the bright side, 2011 showed the highest percentage of profitability in 3 years, and even though it’s not at 19.7% like in 2007, it sure looks like it is headed in that direction.
So what does that mean for PR professionals?
The way I see it, the farther away we are from the recession, the more prosperous we are going to be as a nation. Although that seems like common sense, I am going to explain the correlation between the two and WHY one leads to the other.
The recession, which can be compared to a down period in any area of life, is an era that is marked by fear of taking action. What this translates to, in terms of PR agencies, is less spending by clients and less risk-taking by the agencies themselves. This results in less creativity and a more baseline approach when it comes to dealing with a situation. Ultimately this leads to profits which are closer to zero because instead of trying to win, these agencies are trying to not lose. And, as you know, just like the baseball player who refuses to swing the bat, or the football team who decides to run the ball and trust their defense, playing not to lose is usually a prolonged way to end up losing.
So as we move farther away from the recession and the fear of taking action, the more we are trying to WIN. Trying to win leads to success. Trying to win leads to higher profits, better work, happier clients, and genius-like creativity. The more we think with a winner’s mindset, the higher our profitability is going to be. So if there’s a positive we can take away from the recession it’s this: You need to remain strong and take action, especially in the face of adversity.
So the next time you get caught up in another recession-like mentality, it is important to remember that you need to try to WIN. Don’t play it safe. Take a risk. Follow your instincts. And when push comes to shove, go out and achieve the success you know you are capable of. Will your efforts work out 100% of the time? Of course not. But at least you can say you gave it a shot. And based on the latest SGP Survey, it appears PR agencies are doing just that.