Why a third of PR agency revenues are non-traditional

Several agencies have dropped 'PR' from their name because they expect non-traditional revenues to soon top 50 per cent of the total.

The business landscape for public relations agencies has seen an evolution in recent times. These changes are in tandem with newer forms of media or content consumption gaining prominence in India. 

Today, several PR agencies offer multiple communications services to their clients, and many identify themselves as integrated communications partners.

Heads of PR agencies, Ameer Ismail, president, Lintas Live, MullenLowe Lintas Group; Karan Bhandari, MD- integrated media strategy, Weber Shandwick; Kunal Kishore, founder-director, Value360 Communications; Pooja Chaudhri, executive director, Concept PR; and Vineet Handa, founder and CEO, Kaizzen, joined Sreekant Khandekar, co-founder and CEO, afaqs!, at a panel discussion on CommuniCon 2023.

The discussion was titled 'How far is too far for a PR agency'. As the number of communication mediums has evolved, it is now common for brand marketers to be in talks with multiple agencies for their communications at any given time, Khandekar highlights. 

However, brands are also often more comfortable working with certain agencies and tend to have one agency look into their communication on multiple platforms.

Hence, PR agencies, which have been around the block for a long time, are now seeing a demand to spearhead brands’ communications. These engagements may be beyond the ambit of traditional PR but agencies are rapidly evolving their capacities to meet these business demands. 

Ameer Ismail of Lintas Live informs everyone that 45 per cent of the company's business is brought in by its business foray into non-PR activities as of now. 

He divulges that certain clients of Lintas Live are engaged with 16 agency partners simultaneously. "Navigating the communication ecosystem can get confusing for clients. Hence, you can't blame them for wanting to integrate their business with a single agency partner. This has changed the dynamics of agencies' business models. I think the pandemic was a trigger for PR agencies to reimagine and re-strategise their business."

Lintas Live identifies itself as a digital-first creative agency and believes PR is no longer just about media stories. To stay relevant in conversations, brands need to harness the digital ecosphere efficiently. Hence, many PR agencies are focusing on developing resources that can optimise their efficacy in communication on the digital front. 

Kishore of Value 360 shares that now brands often approach PR agencies to drive communications for specific campaigns. Thus, the perception of PR agencies has changed from just PR to a more holistic marketing and communication partner, he deduces. 

Kishore has been heading the business for Value 360 since 2007. However, gauging the impact that social media influencers have on popular culture, they introduced an influencer marketing platform, ClanConnect, recently.

"Newer mediums, like social media, are expanding in scale. They will command a sizable share of ad spends. I believe influencer marketing will take centre stage for brand marketers moving forward." 

He estimates that 35 per cent of business for Value360 is brought in by non-PR activities. However, he points out that influencer marketing stands at about 2 per cent of total ad spends.

Given the increase in the number of content creators online in India, he believes the Indian industry has only touched the tip of the iceberg. He opines that 65 per cent of Value360's business will come out of non-PR activities within two to three years.

Bhandari of Weber Shandwick concurs with Kishore's estimates of the growth of non-PR businesses. Recently, Weber Shandwick won the social and digital marketing communication mandate for Adda52 and Games.

Bhandari observes, "We sometimes compete with creative or digital agencies. There are times when we compete against very specialised research agencies because our work is analytics led."

He says that other businesses often end up being more profitable for agencies. 35-40 per cent of Weber Shandwick's business is currently coming in from non-PR activities.

"PR should not be considered to be synonymous with press releases. PR means storytelling. It could be with internal or external stakeholders. Even as these business percentages increase, storytelling will continue to be at the heart of PR agencies. The outputs and outcomes will change. Agencies have always been looking into services that allow us to remain relevant to the C-suite and move beyond vanity metrics and that is something we will continue to do.

Vineet Handa of Kaizzen highlights that the agency dropped PR from its brand name. Its new brand identity is 'public relations and digital media agency'. However, more than 60 per cent of the company's revenue still comes from traditional PR.

"These changes were bound to happen. Lots of the PR agencies don't have PR in their names now. We have transitioned to being just brands now, looking beyond traditional PR. We are the custodian of brand messaging. If we remember that, all other things fall into place. Clients consult us for research, ESG, among other conversations,” he observes.

Speaking about non-PR business activities, Chaudhri from Concept PR highlights that paid or owned media, which was considered a taboo by brands, is now really important.

She believes that the PESO business model has become increasingly relevant. PESO stands for paid (generally ads), earned (sharing content with external stakeholders like media), shared (amplifying content by audience sharing) and owned (communication channels of a brand). 

"More agencies describe themselves as integrated communication consultancies. Agencies present paid media content solutions as part of their communication matrix given the increase of its relevance now," she observes.