“Many PR firms are hiring social media practitioners and strategists, expect this trend to continue”
From where I am, I would certainly concur. In the Canadian community, Michael Seaton and Bob LeDrew, both ardent supporters/practitioners of social media, have been hired by Thornley Fallis while my old boss David Jones was hired by Hill & Knowlton.
You can barely go a week without reading about another blogger who has been hired by an agency (marketing/PR/advertising/whatever) to help get them up to speed on social media.
But I can’t help but feel that this movement is just a prelude to something more. If PR firms are hiring people, are they *just* testing the water for something bigger?
PR agencies will start buying entire digital agencies, bringing them in-house and really ramping up their own social media capabilities.
The direct, personal, one-to-one communication that social media affords organizations naturally lends itself, in my opinion, to the communications/Public Relations function so it’s no wonder that blogger relations, blog coaching and internal social media will be handled by a PR agency.
But once the client has signed off on doing a blog or interactive concept, an agency without technical capabilities has to push the actual heavy lifting to an external agency. Thus, the “lead” agency gives up high margin revenue to outside its own Profit and Loss column.
But, for agencies with in-house capabilities, this social media consulting leads to a (potentially huge) technical engagement.
Will this be allowed to continue to happen? Surely not.
If nothing else, Dell’s Da Vinci project shows us that big clients are looking to make one phone call to one, integrated, agency and have all their problems solved for them.
The PR/marketing world can definitely draw lessons from the software industry. In this industry, new upstart players, such as middleware providers or open source databases, come along and change the game for the bigger players by creating a new category. These new categories are then consolidated, through acquisitions into the bigger existing players. In fact, two examples of this happened this week. My old client BEA Systems (middleware) was bought for Oracle for $8.6bn and Sun Microsystems bought MySQL (open source databases) for $1bn.
The PR industry operates on slightly smaller numbers, but I’d imagine there would be a number of $1.5m – $3m digital shops with 10 – 15 employees being acquired by PR agencies in the next year or so.
In retrospect the credit crunch and impending recession (actually, is it already here? Two quarters of declining GDP?) in the U.S. means that client budgets may shrink. This could go either way: either agencies will be so desperate for new revenue streams that they buy digital shops for their clients and expertise or agencies considering acquisitions will hold off for a while and continue to hire people, not buy clients.