The survival of the PR industry is reliant on growth and success of other industries, so naturally the industry is heavily affected by any period of economic downturn. When it comes to budget cuts, marketing is usually one of the first business areas that is targeted, despite it being essential to business growth. The challenges the industry have faced include lockdowns, remote working, a restricted news agenda and job losses.
The Government Covid-19 Communications Advisory Panel commissioned a report exploring and analysing the impact of the pandemic on the industry, with contributions from key stakeholders to include the Chartered Institute of Marketing, the Chartered Institute of Public Relations and the Institute of Internal Communication. The report identified that PR can power the UK’s recovery, through engagement with community and society, providing targeted and reliable information. The industry has shifted to virtual communication, enabling flexible work environments. Multi-agency networks have increased, allowing businesses to grow through collaborative working.
Industry trends impacting PR going forward include:
Communicating compassion – an increased emphasis on health and safety, requiring an up-to-date awareness of impacts on culture and society.
Social listening – an emphasis on effective two-way communication, monitoring and analysing feedback from PR campaigns and making relevant adjustments
Effective media mixing – combining traditional and digital communication, tailored to the requirements of relevant consumers and industries with an adaptable and diverse strategy.
The Chartered Institute of Public Relations annual report for 2020/2021 found that more than one in five PR practitioners changed their role during the pandemic. Interestingly, 40% of survey respondents reported that Covid-19 had a positive impact on their businesses, with 29% reporting a negative impact and 20% a mixed. Positive impacts included an increased demand for crisis management services, more innovation, remote and flexible working and positive digital transformation. Negative impacts included staff morale, decreased value of PR, increased job losses/furlough, negative financial impact and uncertainty in the profession.
The assets that a communications and public relations company can own are included but not limited to; IT equipment and office furniture, vehicles, trademarks and branding, websites and social media accounts, websites and goodwill. There is also potentially a leasehold interest (which can often be a liability rather than an asset) and occasionally a freehold interest, although this is rare due to the rising costs of property.
However, due to the move to flexible and remote working, we are anticipating it to be less common for agencies to have the overheads of large office spaces.
So how can we help? A valuation is a key part of early advice. It can clarify your position and aid with the decision-making process. It is also a way of identifying surplus assets or elements of the business that can be sold off to raise capital. In an insolvency situation, any sale of a business or assets is going to be subject to scrutiny, and a valuation report will demonstrate to creditors and any proposed insolvency practitioners that Market Value has been achieved.
If we can be of assistance to you or any of your clients, please do not hesitate to get in touch on 01425 200366 or op@proudleyassociates.com