Social media: ad agencies “falling behind” as PR pros cash in

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Social media: ad agencies “falling behind” as PR pros cash in

Submitted by Bernhard Warner on March 21, 2011 – 12:05 pm

That’s one way to interpret the findings of a new study that pits ad agency vs. PR practitioner and asks: which sector is better positioned to take advantage of big brands’ push toward social media? The study comes courtesy of Worldcom PR Group and the Transworld Advertising Agency Network which surveyed 25 PR agencies and 25 ad agencies to get their take on how each sector has performed to date in social media implementation work and what are its business prospects going forward. Let’s go straight to the money first. As eMarketer *notes:

In 2010, 28% of PR agencies reported that 15% to 33% of revenues came from social media, and that number has jumped to 44% in 2011. On the advertising side, 16% of respondents reported that social media revenues were greater than 15% of their total revenues in 2010, and were expected to increase to 20% in 2011.

As eMarketer rightly points out, this makes a lot of sense. Ad agencies tend to bring in more revenues. So, a small but growing social media business is bound to make up a smaller part of the business for the “Mad Men.”

But we’ve also observed something here at SMI recently that suggests there’s another factor to consider: that PRs are winning the business for not just daily branded social media communications, but for campaigns as well. We saw this recently with two social media marketing efforts we’ve spotlighted for Aunt Jemima Pancakes (handled by Weber Shandwick) and for a Ford Explorer social media campaign as well. To put it bluntly, PRs are scoring some early wins that used to go to the digital creative guys.

Of course traditional PR communications skills, you could say, are better suited for a brand’s social media strategy. Throw in the need to monitor ongoing conversation, conducting outreach with influential writers and bloggers and you can see why a lot of social work is going their way. Maybe that’s why, as the study shows, the PR sector feels more satisfied with the body of social work they’ve already conducted. As the blog, PR Strategies 2.0 merrily notes:

PR Leads Social Media

  • 84% of PR respondents were pleased with their profession’s approach to social media campaigns.
    • Approximately 20% stated it was an “innovative marketing communications leader.”
    • About 64% said it was “keeping pace.”
  • By contrast, only 52% of the advertising respondents rated their profession either “innovative” at 12% and “keeping pace” at 40%.
  • Another 40% of the respondents said the advertising industry was “falling behind.”

This last finding surprised me the most. While more than four out of five PR pros gave themselves a pat on the back for their social media work to date, just half of the advertising execs were similarly satisfied. Maybe the latter feel as if we haven’t seen the best of what’s to come from social media advertising. Or, worse. Maybe they feel as if the PRs are going to take an unassailable lead in social.

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PR Pros Use Social Media More Effectively

MARCH 21, 2011

Both ad and PR agencies see social media revenue growing in 2011

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Public relations and advertising agencies see increased social media revenues and plan to work together on social media as a growth strategy for 2011.

A joint study from the Transworld Advertising Agency Network and Worldcom Public Relations Group surveyed principals at 25 advertising agencies and 25 PR agencies in January 2011 on how effectively the industry is using social media. The groups found fees from social media made up a greater percentage of overall revenues in 2011 for both types of agencies.

In 2010, 28% of PR agencies reported that 15% to 33% of revenues came from social media, and that number has jumped to 44% in 2011. On the advertising side, 16% of respondents reported that social media revenues were greater than 15% of their total revenues in 2010, and were expected to increase to 20% in 2011.

Percent of Revenues from Social Media According to Ad Agencies and PR Firms Worldwide, 2010 & 2011 (% of respondents)

There are several reasons why social media makes up a greater percentage of PR agencies’ revenue, including the fact that advertising agencies generally see greater revenues overall. But in addition to that, principals from both agencies think the PR industry is more effective when it comes to leveraging social media.

The survey found that 84% of PR agencies and 67% of ad agencies reported that PR is “innovative” and “keeping pace” in the space, while 68% of PR agencies and 52% of advertising agencies said the same about the advertising industry. Often, PR agencies are considered better at communicating to and having a dialogue with consumers than their advertising counterparts, and those skills translate well to social media.

Yet, while both industries give public relations the upper hand, they also see a need to work together and integrate social media into all marketing communications campaigns.

Social Media Growth Strategies Among Ad Agencies and PR Firms Worldwide, Jan 2011 (% of respondents)

Social media continues to become a bigger part of agencies’ day-to-day work, long-term strategy and revenues. As different marketing disciplines work together on social media, it can improve the effectiveness of social media outreach for clients and continue to bring more work into these agencies.

My Take:

I think it is so interesting that so much revenue from advertisements comes from social media websites. When I am on facebook or twitter, I always find the advertisements to be obsolete and annoying. I never click on them. I am surprised that so many people would click on those advertisements on facebook. What also intrigues me is that most advertising executives are not completely satisfied with the amazing increase of advertising sales on social networking sites. At this time in my life I cannot see the future of advertisements. The execs know that so much more is to come and I cannot wait to see how they evolve.

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