January 18, 2024
- There's a lot of chatter coming out of Davos about AI's impact on the way we work. I'd argue the PR landscape is already going through a major shakeup — and AI is only a small piece of the puzzle. Let's jump in. ...
Today's newsletter is 1,782 words, a 6.5-minute read.
1 big thing: The rise of "challenger" firms
If it feels as if every shrewd communicator you know is jumping ship to start their own firm, then you're not alone. I've noticed this too.
Why it matters: These challenger firms — or high-level, strategic communications advisories that are more agile than the agencies of lore — are changing the PR business model and its offerings.
Driving the news: Joele Frank alums launched Collected Strategies, Laurel Strategies and BCW alums are leading One Strategy Group and Edelman and Brunswick alums started Velocity Partners, all to provide specialized, executive-level counsel with lower overhead.
- In-house talent is increasingly going off on its own too. Amazon and Boeing alums recently joined forces to launch Shallot Communications, and a collective of former Twitter executives opened the strategic communications advisory Blue Owl Group.
State of play: Specialty communications firms with expertise in health care, public affairs, corporate affairs and finance were more resilient against last year's economic challenges, per a recent Davis+Gilbert report.
- Yes, but: The PR industry as a whole is bracing for a volatile 2024, with only 53% of the firms reporting an optimistic business outlook — down from 66% last year.
Zoom in: Firms' biggest concerns include client budgets remaining flat or decreasing, the rising cost of talent and retaining existing talent, per the report.
- Leaders of challenger firms argue they can solve these concerns by attracting both rising talent who crave ambitious projects and remote work models, and clients with high demands but shrinking budgets.
- Plus, the addition of artificial intelligence will empower smaller firms to work faster and smarter with fewer people.
The big picture: AI is expected to impact 60% of jobs in developed economies and 40% of jobs globally, according to the International Monetary Fund.
- The adoption of AI will not only change the work of PR professionals but it'll disrupt the business model as a whole.
Between the lines: Gone are the days of billing several hours of work for a press release, briefing document or media list.
- Instead, firms will need to serve as trusted, strategic advisors who can guide the new generation of C-suite leaders, says One Strategy Group president Brian Ellner.
- "The C-suite is getting younger and more diverse, and companies are facing more pressure from more sides. Our team is embedded in the C-suite and all of our communications work is driven by strategy — we are not replicating the model of pushing work down to junior associates."
What to watch: PR firms are ripe training grounds for communicators who are new to the workforce. Elevating the work of these firms could alter the future talent model and leave some behind.
2. The collective strategy
Macroeconomic factors like shrinking budgets and an influx of available talent have normalized the collective model — which is being embraced by firms and consultancies of all sizes.
Why it matters: Collectives allow for "Avengers"-like communication teams to assemble for one-off projects or particularly thorny assignments.
State of play: The Weber Shandwick Collective recently began tapping outside experts — like former White House officials, CCOs, academics and policy experts— to service their clients in advisory roles.
- There's also the so-called 1099 strategy (named after the tax form for consulting work). Gray Wolf is the latest firm to operate on this "fluid workforce" model — meaning its founders, Endeavor alums Shaun Clair and Layton Lassiter, run the day-to-day operations and tap a network of 30 freelancers, independent consultants and small independent agencies for special projects as needed.
What they're saying: "Our industry and how people use our industry has not been very dynamic over the last several decades — but how we are leveraging talent is starting to shift," says Mixing Board founder Sean Garrett.
- "Collectives are tapping senior-level experts — all of whom are doing their own thing — to come together and collaborate on different projects that they each bring in."
Zoom in: This is disruptive for a few reasons, says Garrett.
- "One is that you can now pull together the top people from across the globe, which used to be something that only a huge, well-capitalized international firm could do. And two, these supergroups are formed by people who have collaborated in the past and have deep expertise, but operate in a leaner way."
Yes, but: For these collectives to work, they must also hire strategic do-ers — people who can both come up with the plan and execute it.
The bottom line: The freelancer economy contributes $1.3 trillion to the U.S. economy — up $100 million from 2020 — and both independent consultants and in-house comms pros are increasingly teaming up through membership organizations and collectives.
(Disclaimer: Hawkins is a Mixing Board member).
3. Time to get creative
The ability to develop content is another huge advantage in 2024 — and top firms are doubling down on these narrative-driven efforts.
Why it matters: This could lead to an even murkier relationship between communications and marketing, which historically oversaw this domain.
Zoom in: It's about sourcing creative ways — beyond earned media placements and the traditional scope of PR — to communicate a thesis to investors, employees and brand partners, says Adam Mendelsohn, founder of Upland Workshop, a communications firm working with high-profile leaders like LeBron James.
- "The new reality is about connecting a narrative to audiences that have real influence on your business by providing them with compelling content that actually breaks through. ... It's not just about the publicity, but the broader storytelling effort."
Zoom out: Owned content has evolved from thought leadership posts to memoirs, television shows and podcasts, while media outreach has extended beyond legacy outlets to include social media, newsletters and influencers.
- For a brand to show up across all of these channels effectively, there must be a culturally relevant narrative that serves as the thread.
What they're saying: "The way you break through is by treating brands just like you would treat the Rock or Serena Williams," said Ed Horne, president of 160/90.
- "We must create a narrative [explaining] why people should pay attention to the brand. This means thinking less like advertising and thinking more like a producer. ... It's not so much about product placement — it's more about connecting audiences to a story."
State of play: The most successful firms of the past year — those that outperformed the market and increased profits by more than 10% — plan to invest in their creative storytelling capabilities, per an industry report.
Yes, but: 70% of PR professionals struggle to create effective content, according to a recent study from the Institute for PR.
- Plus, the latest Creativity in PR report found that only 47% believe PR agencies are best for developing these earned-first creative campaigns.
This could explain why PR firms and content marketing agencies continue to merge.
- Highwire PR announced the acquisition of content marketing firm Candor Content, FINN Partners acquired international creative agency Outré Creative, and digital marketing agency Mod Op acquired Crenshaw Communications late last year.
4. The fractional CCO takes shape
It's fairly common to see fractional chief marketing or chief financial officers — and these temporary or part-time opportunities are starting to normalize in the communications role too.
Why it matters: This represents yet another flexible and cost-effective way for companies or brands to tap into senior-level expertise.
Driving the news: A group of former CCOs and an experienced recruiter recently launched CommsCollectiv, a firm specializing in fractional employment for seasoned communications professionals.
- Since its launch in November, CommsCollectiv has filled roles for Fortune 500 companies, professional services firms and smaller, private-equity-backed entities looking for senior-level executives available on a short-term basis.
Zoom in: Fractional CCOs are being brought in to help build up a communications function, manage the transition during a corporate restructuring, or raise brand awareness.
- These fractional roles are particularly intriguing for senior leaders looking to take on a few projects at a time.
- And unlike outside advisers, these roles are embedded with the team and often have a seat at the decision-making table.
What they're saying: "Ultimately, the fractional leadership model is beneficial for both the CCO and the company," Ant Steel, founder of Steel Communications, told Axios.
- "The CCO is able to set clear parameters, primarily that they will focus solely on strategic matters that utilize their specific skills, [and] the company knows the leader will bring a fresh perspective, unencumbered by office politics and at a more affordable price," Steel said.
5. Communicator Spotlight: Leslie Cafferty of Booking Holdings
As chief communications officer of Booking Holdings, Leslie Cafferty considers herself to be the voice of the company.
- Why it matters: Booking Holdings is the parent company of travel and leisure brands like Booking.com, Kayak, Priceline and OpenTable and reaches millions of travelers each year.
📍How she got here: She started her career as an executive assistant at the internet holding company IAC and worked her way up to director of global communications.
- As an executive assistant, "I saw the communications team advising our CEO very specifically on what to do and what not to do. I got a glimpse into the role of communications and how interesting it was — and it was unlike anything I had ever known."
- After roughly a decade at IAC, Cafferty joined Nielsen to oversee marketing and communications before joining Booking Holdings in 2013.
🏗 How it's structured: Cafferty reports to CEO Glenn Fogel and manages a team of four communicators within Booking Holdings and a team of 60 communicators at Booking.com.
- The communication teams within each of the other brands have a dotted line into her and manage corporate communications, consumer and product communications, internal communications and owned social media.
🗣What she's saying: "When I started [in the workforce], businesses didn't speak about anything other than business — and even then it was only four times a year during earnings calls and that's it," says Cafferty.
- "Now, the expectations of employees and you can argue society, is that CEOs should have a point of view on things. ... And I think there's value in some scenarios to have a voice on things and not on others, but that too is constantly changing."
📈 Trend spot: The fluctuating channels of communication.
- "How you tailor a message and decide which channel to put it on — whether that's social media, traditional media or elsewhere — is incredibly complex. Gone are the days where you write a press release and push it over a wire, it's just a lot more nuanced than that."
🧠 Best advice: Don't procrastinate.
- "I love the saying, 'Don't put off until tomorrow what you can do today' and I try to keep that in mind in both my career and my personal life."
Go deeper ... Read her spotlight in its entirety.
6. 1 quote to-go
"Every single one of us will need to write a new job description, just like we did in the mid-'90s with the internet."— Salesforce AI CEO Clara Shih speaking at the Axios Haus in Davos, Switzerland
🙏🏻 Thanks to editors Nicholas Johnston and Kathie Bozanich.
And thanks to you for reading! Hit us up with feedback or story ideas.