I don’t think that some firms are taking the threat of a downturn seriously enough yet. It’s really important to define value and give excellent client service but also to manage commercial relationships with clients. Too often in early stages of past downturns, good firms have come unstuck when a couple of clients either go down the plughole or have a loss of ethical behaviours when it comes to honouring contracts. The consultancy gets left holding big bills for time and bought-in services that often breaks them. So my advice is track the cash and manage the relationships assiduously.

I also agree with some bloggers (Liberate Media, etc) that there may be some reinvention of the PR advisory firms back towards virtual firms and alliances rather than the big structured extensive business. It’s a workable strategy in a recession, especially if it is prolonged, as costs can be managed tightly while service standards remain high. If you thought that ‘tech-wreck’ at the beginning of this decade was tough, I reckon it was only a training run for the coming downturn.

as a 1 man consultant I would say, outside of complete global market breakdown (shotguns / living off the land) I do feel strangley bullish

seems to me, the migration to social media monitoring / online PR, which offers a far more effective (and cost effective) way of engaging conusmers, can only be helped by a downturn

I also couldn’t leave a post without suggesting to ed that we are actually seeing is the final death of 30 years of Reaganomics - kidding ourselves that this crisis is based in the short term, will only make its re occurance more likely.

This isn’t a downturn. This is de-leveraging back to a 60s style economy.

As an agency (at parent company level) our global fees I think are not so very fsr off your tier.

At the moment PR agency bosses - myself included - are franly in the dark (and only a loon would boast oterwise). It is now - literally right now - that 2009 budget commitment for firms with a JAN 1st financial year start are being debated. Not by our ‘clients’ but by their CFOs.

Russia is a small PR market - compared to the USA or UK - and we five or six market leaders represent a larger than usual number global top 100 firms. So far we are seeing two things:

- an assumption that if sales are coming anywhere the ‘BRIC’ countries look pretty good (notwithstanding, as I have blogged today, less good than a week ago. But Real World respectable even so). That’s nice.

- but, secondly - and this of course gives me the sleepless nights - the decision-making process on 2009 budgets has shifted. If in most years clients with Calendar year financial years ‘tip you the wink’in October and raise the PO in November; this year I suspect POs for Q1 will not be signed off until deep into January.

It is easy to be a PR agency boss in a bull market. Between now and, say, June next year, agency bosses - even littl’uns like me - will earn their money like never before in the last ten years. I have budget plans for 30% growth and 30% retrenchment and everything in between.

Scary. But not uninteresting.

personally, i’m bullish about the next 12 months but i think after that we’ll see cutbacks from all marketing budgets across the board and it will be up to the measurement bods to really define the value of all the marcom functions. thankfully digital is well placed for this but you’re right, it will be rocky.

i couldn’t leave a post on your blog about this recession without reminding you that it was, in fact, Fannie Mae and Freddie Mac that caused all of this in the first place. good, to great, to calamitous in less time than it takes for jim collins to issue a new edition of his seminal work!

ed