✅ Navigating agency growth through economic uncertainty
A week in management, media and public relations
Scaling Service is a newsletter by Hard Numbers’ founder, Paul Stollery. He writes about launching, managing and selling agencies. I recently spoke to Paul about trading through a downturn for a three-part series.
I’ve supported the Hard Numbers team as a professional adviser since its launch three years ago. During that time, the world has been in a perpetual economic crisis. We're technically not in a recession right now, but inflation and high-interest rates make it feel like we are.
I bear the scars of managing agencies through three recessions: the dot com crash and 9/11, the financial crisis of 2007-2008 and COVID-19. There are some fundamental rules to apply. The critical one is financial discipline.
Do a zero-based budgeting exercise to critically evaluate all costs rather than incrementally budgeting based on past years
Revenues were achieved profitably at lower levels in the past. Review what costs looked like at those levels.
Be transparent about the financial situation with your team to avoid anxiety and uncertainty. Smart people understand how an agency works.
Managing through a recession process will strengthen agencies for the future and place a focus on the balance sheet and building reserves.
In the following two parts of this series, we’ll look at how you work with a management team to develop a sustainable business plan and then shift back into growth.
If you’d like to book a 30-minute meeting with me to discuss any issues covered in Paul’s newsletter, you can contact me via email at stephen.waddington@wadds.co.uk.
I also recommend signing up for Paul’s newsletter.
Media
📱 HARRY HACKING WIN: Prince Harry won a legal victory against Mirror Group newspapers, which he accused of hacking his voicemail in the 2000s. Harry, who blames tabloid culture for tensions with the royal family, was awarded $180,000 in damages over articles the judge said came from illegally obtained information. Source: NPR.
👩 MONE SINKS: Michelle Mone and her husband, Doug Barrowman, gave a disastrous interview with Laura Kuenssberg about profiting from PPE contracts during the pandemic. The interview was likely intended to redeem Mone's image but instead further damaged her credibility through her arrogant and contradictory claims. Source: New European.
Research and books
📚 REPUTATIONAL REHABILITATION. An organisation used to take up to four years to recover its reputation after a crisis, but political polarisation means damage is longer lasting. Brands must back up values with action, engage with both sides of an argument and stick to their principles when future controversies arise. Source: Harvard Business Review.
📙 TOOL BOOK CHAPTERS: We’re publishing chapters from my book about AI PR tools daily on the #FuturePRoof website. Last week’s included media writing tools Anyword and Jasper AI, media analysis tool Overtone, meeting transcription services Fireflies and Otter.ai, and design platform Canva. The book is also available to purchase in print and Kindle formats. Source: #FuturePRoof.
Artificial intelligence
↪️ AI WINDBACK: Five months ago, Axel Springer joined a coalition planning to sue AI companies, including OpenAI, for stealing their content. Now, it has teamed up with OpenAI to allow content from outlets, including Bild, Business Insider and Politico, to be used as training data in return for a favourable position in AI results. Source: OpenAI.
🏛 EU AI ACT IN WORKS: The EU has provisionally agreed on landmark regulations to govern the use of AI technologies and facial recognition systems. It plans to vote on rules early next year to provide the first comprehensive legal framework globally for developing and deploying trustworthy AI. Source: European Union.
♊ GOOGLE UNVIELS GEMINI: Google has launched a new multimodal AI model called Gemini, capable of processing images, video, audio and text. It lags behind ChatGPT in capability, however its ability to natively work with video indicates strong potential. The credibility of Google's claims about Gemini's capabilities have been questioned by its use of pre-trained demos. Source: Google.
Best and bad practice
🙃 ACTIVIST FARMERS REVOLT: Angry French farmers have launched a protest campaign, flipping thousands of road signs in rural areas upside down. The goal is to draw attention to the precarious state of farming and force the government to offer tax concessions, though no attempts have been made to right the inverted signs. Source: BBC.
🚫 BRAND BACKLASH: Zara pulled an ad campaign after backlash on social media that some images showing models with mannequins wrapped in plastic resembled war-torn Gaza. It says the misunderstanding was unintentional and the campaign was meant to showcase garments in an artistic context. Source: BBC.
🧶 JUMPER PULLED: Next has pulled a Christmas jumper with a Pan Am design from its website after complaints it was offensive and insensitive to those affected by the 1988 Lockerbie bombing. The retailer apologised for any upset caused by the £36 jumper, which a third-party brand created. Source: Sky.
♻️ UNILEVER PROBED: The CMA is investigating whether consumer goods giant Unilever is misleading consumers with broad environmental claims about its products. It will examine if statements and logos about "greenness" and recyclability on Unilever brands like PG Tips tea and Persil laundry detergent can be substantiated. Source: CMA.
Thank you to the following members of the House of Marketing & PR community of practice for sharing and debating stories covered in the newsletter over the last week: Ann-Marie Blake, Julian Christopher, Slavina Dimitrova, David Edmundson-Bird, Michael Greer, Alan Morrison, Nigel Sarbutts, Andrew Bruce Smith and Sarah Waddington CBE.
This is our last newsletter of 2023. We’re on holiday until 8 January. Have a good break and see you in 2024.