MediaBistro.com is an important and widely read source of news for the media community.  It is very robust in its scope of coverage, and provides a constant diet of news, features, information of interest to people in the business, and interactive conversation.  They link to a number of blogs they have created for several niches of the industry.  One of those blogs is called PRNewser.  It has become the custom at the end of one year for PRNewser to solicit predictions about what might happen to the public relations business in the year ahead.  They like these predictions to be concise and pithy.  Anyone who has read a previous post here on Death of Time knows that I am rarely concise, but nevertheless, here is my attempt to create a series of concise and pithy predictions about the PR business for 2009, with one caveat:  What I am predicting tend to be events occurring within the process of an evolutionary process, so whereas I am willing to bet these will occur (with some shades of difference), they may not begin and/or end precisely within the confines of the next twelve months.

1. How Busy PR People Are – They Only Care About The Value Of Their Work.

Time is money only when you live by the standards of the manufacturing economy.  But we are transitioning ever quicker to a knowledge economy, and public relations is far from a manufacturing business with lots of fixed hard assets.  So why is the PR business still based on the outdated concept of billing by time?  The process of creative destruction associated with the financial crisis will accelerate the destruction of the old model, as The Washington Post’s Pulitzer prize winning business columnist Steve Pearlstein predicted in October 2006, when he discussed the Qorvis model.  In 2009, we’ll start seeing more firms set fees on the basis of a fixed retainer based on the value of the effort rather than the time it may take to make it happen.

2. Segmentation Within PR Firms Will Begin To Crumble.

In a world where the desired audience for a message can be highly targeted and can be reached through many distribution channels, why are there silos and “practice groups” inside PR firms?  Isn’t the idea to share experiences, approaches, and contacts to maximize all the firm’s human assets for the benefit of the client?  Silos are non-productive.  The only reason they exist is because time sheets allow Management to measure everything into little segments of time, so that’s what drives management actions.  And time also determines how people get paid and how bonuses are awarded.  And who is deemed “profitable.”  And how to tell which clients are most cherished.  Crazy.  Chunks of time have nothing to do with what the clients want.  They want great work.  They are no longer going to be making their budget decisions by how many chunks of time it takes to do something; they are going to be determining the value of every dollar they spend against results delivered.  Delivery on that expectation will be directly related to the degree of collegiality among talented people seeking shared goals.  The silos have to go.  It’s only a matter of time.

3. The Communications Business Will Stop Defining Itself By Virtue Of A Distribution Channel.

Think about it.  An ad agency is an “ad agency” because it buys time or space on a distribution channel to deliver its message to its targets.  And a PR firm is a “PR firm” because it “earns” coverage in a distribution channel controlled by others.  A digital shop focuses on digital distribution channels.  Sports marketing uses another distribution channel: perhaps a stadium.  But wait.  Is “communications” about the distribution channel or about getting a well-crafted message to a targeted audience to achieve specific goals?  So, why has the industry defined itself by the distribution channel instead of the goal of the effort?  It’s about time to change the way the industry has organized itself.  We’re going to see the end of PR firms, ad agencies, new media shops, etc.  We’re going to see communications firms, where distribution channels are simply tools to get messages to audiences, and not the center of gravity of the effort.

4. Social Media Loses The Hype.

Wait!  That’s crazy.  Social media is THE thing.  It’s going to revolutionize communications.  Yup.  Except for one thing:  it isn’t going to revolutionize communications 100%.  It’s important.  It’s going to hurt other ways of communicating.  It is NOT going to kill all other ways of getting messages to people.  It has been over-hyped.  If social media is going to become as important as it can be, it will be because it is a part (a very important part) of a total and robust communications campaign.  To get there, all the proselytizers of social media have to take a breath, get a grip, get real, and bring down the hype.

5. At Least One Of The Multinational Communications Conglomerates Bites The Dust.

Impossible?  Sure, just ask everyone from Lehman and Bear Stearns (should I mention the rest?) who also never believed that they would go bye-bye virtually overnight.  Look at the big conglomerates.  Massive and duplicative overhead structures.  Silos within silos.  Outdated business models.  Offices in parts of the world where the clients have gone into comas.  Offices dedicated to verticals that are on their back.  Large amounts of debt from their acquisition binge.  The ongoing need to make earn-out payments – and just how are they going to do that?  With stock that is so low that the dilution will be enormous, or with money that (if they have it) they have to preserve?

6. The Bifurcation Of The Communications Industry Into “Consumerism” and “Supporterism.”

Since the post WW II expansion, the messages that have inundated the American public have been “buy this” messages.  Whether targeting a business or an individual, the message has virtually always been to buy something.  A small sliver of the total universe of messages has been of the “support this” variety – that is, messages that ask people to do something else: to vote or influence or urge or make a call or go to a rally or do a wide range of other things for the sake of keeping or changing public policy.  That is about to change.  The economy is going to lead to severe cuts in consumer campaigns, and the frequency of those messages is going to drop sharply.  At the same time, the Obama Administration is giving every signal that it is going to address fundamental, game-changing issues in a large number of businesses and arenas of daily life.  Every special interest group in the nation is going to have a mission critical need to defend the status quo or promulgate and promote new proposals.  That will lead to a surge in “support this” campaigns.  Those communications firms with a portfolio of “buy this” campaigns are going to face difficult times as they experience budget cuts from their existing clients and difficulty competing against firms that have a strong portfolio of “support this” campaigns.  What should we expect?  A lot of communications shops are going to try to retool, redefine and reposition their expertise to go after “supporterism” campaigns.  We’ll start to see seminars and college courses and papers all about “how to run a campaign to get people to support a public issue.”  Asserting expertise in running advocacy campaigns will become very hot.

7. That Will Be Good News For Washington; Bad News Elsewhere.

I realize that my own company, Qorvis, fits this description, so I keep poking myself and saying: “Make sure this isn’t wishful thinking.”  But I’ve also spent four decades in this market, and have become a part of it.  Here’s what I see:  During the tech boom, if you ran a software company, it didn’t matter whether you were in San Jose, St. Louis, or Scotland, you were inclined to go to Silicon Valley to at least interview for your VC, lawyer, communications firm, etc.  As the surge in “support this” campaigns occurs, prospective clients will gravitate to Washington communications firms, lobbyists, lawyers, and their industry trade associations, all of which comprise an existing and interlocked community.  Top talent from New York and other traditional centers of the communications industry will relocate to Washington and become part of the culture of advocacy.

8. The Death Of The PR Lifestyle Business.  The Rise Of The PR Lifestyle Consultant.

A public relations business can grow large enough to go public and expand to a global presence.  But that size isn’t necessary to succeed.  In fact, the PR business can be a great business for individuals who pull together to form a small group of professionals and simply want to make a very good living, control their own destiny, and enjoy their work.  I consider those to be “lifestyle” businesses.  I understand the attractiveness – I operated as the ultimate lifestyle business (a one-person shop) for almost seven years.  But very often, these firms do not have significant financial depth; nor do they have a very diversified client base.  In other words, they are always vulnerable to getting hurt by a relatively few number of bad events.  And those bad events are coming, part and parcel of the economic meltdown.  The PR firms are going to have to do one thing to survive: cut back.  And after they cut back, they will likely have to cut back more.  There are only so many expenses they can cut back: people and office, and they will cut back both.  What will be left will be the initial entrepreneur working out of their home.  In addition, those who were cut from lifestyle firms as well as larger firms, corporate organizations, and non-profits will also move to their homes and set-up shop as one-person consultancies.  Many will achieve substantial success.  I think their success will be attributable to the degree of expertise they provide and their ability to find a large universe of potential clients via the web.  I also think those who try to compete on the basis of being the low cost provider don’t have a prayer.

Whether right or wrong, there is an interesting year ahead of us.  It will be easy to count blessings.  Best to all.