Oversupply Hurting PR Company Margins, Sir Martin Sorrell Tells PR Leaders

LONDON - Sir Martin Sorrell, chief executive of WPP, believes that overcapacity in the PR industry means that companies are offering their most valuable asset - intellectual capital - for free.

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Speaking at the first conference jointly hosted by CorpComms Magazine and the Public Relations Consultants Association (PRCA), Sir Martin said that, in no other professional services sector, would companies be expected to pitch for free.

‘Since when do McKinsey, Bain and BCG sit in front of clients and deliver for nothing?’ he asked. ‘The Request For Proposal process is still a long process and it’s all for free.’

WPP recently participated in a pitch involving four major groups, and in one global pitch delivered a 36,000 page document - both at no cost to the potential clients.

But Sir Martin said that the situation was unlikely to change because overcapacity in the industry meant ‘there will always be competitors that are prepared to pitch for free’.

He also pointed out that other professional service companies would alter their pricing structure or cancel a contract if the client changed the terms of service, and that the PR industry was alone in absorbing these ‘charges’.

The conference, which was entitled ‘Emerging from Recession’, was attended by more than 150 PR professionals and took place at Altitude in London’s Milbank Tower.

Francis Ingham, director general of the PRCA, said: ‘We have had a clear message over the past few months from our members that, on balance, the worst is over. People no longer expect things to get worse. Difficulties haven’t suddenly disappeared. PR budgets aren’t suddenly going to go up hugely but there are positive developments.’

Other speakers included Harriet Green, chief executive of Premier Farnell; John Waples, business editor of the Sunday Times; Howell James, corporate affairs director, Barclays; Ed Williams, director of corporate communications, BBC; and Colin Byrne, chief executive UK and Europe, Weber Shandwick.

For further information please contact: Richard Ellis PRCA Communications Director +44-20-7233-6026 Helen Dunne Editor CorpComms Magazine www.corpcommsmagazine.co.uk +44-20-7250-0607

Source: PR Newswire

For further information please contact: Richard Ellis, PRCA Communications Director, +44-20-7233-6026; Helen Dunne, Editor CorpComms Magazine, https://www.corpcommsmagazine.co.uk, +44-20-7250-0607