Public relations industry rapidly expanding

Bruce MacLellan was determined to become a major player in the public relations industry when he started Environics Communications Inc. with just 3.5 employees in 1994.

Now with more than 100 employees and 15 consecutive years of profit growth - even through the recession - Environics Communications is among the top players in a rapidly expanding industry.

"Overall there is a trend toward increased spending on public relations," MacLellan says in an interview at his Toronto office.

He says the industry is almost "recession-proof" in the sense public relations agencies are experts at delivering both good and bad news, the latter being heightened at times of economic hardship. But the industry has much more going for it than simply being the bearer of bad news.

Businesses, particularly those that are small or operating with tight budgets, often find PR to be more cost-effective than traditional advertising and find it particularly suited to taking advantage of increasingly popular social media outlets, such as blogs, Facebook, LinkedIn and Twitter.

The ability of PR agencies to adapt to this changing environment has helped them continue to grow at a time when spending on traditional forms of advertising in print and broadcast has declined.

Veronis Suhler Stevenson, a leading private-equity firm that releases an annual report on the U.S. communications industry, said there was a major shift in spending patterns in 2008 with advertising spending becoming the smallest of the four major sectors tracked for the first time since records began in 1986.

Andrew Patricio, co-owner and head trainer at BizLaunch, a free training service for small businesses, says small businesses in particular are turning to PR because media exposure is more effective than advertising at building a brand and credibility.

"We're a big small business and we've always used PR because you get much more value for your dollar," Patricio says. "PR is really becoming quite mainstream for small businesses. Not only are we trying to get into the local media or national media, but we're also trying to get on to important blogs or important websites."

While many businesses have begun to engage in social media on their own, it has not been at the expense of PR. Amanda Sutton, who runs her own agency, Catalyst Communications Choreography out of Barrie, Ont., says businesses have turned to PR to take a strategic approach to these new online audiences.

"More and more people are learning to harness free online tools, but when they want to learn what to say, they are thinking about PR," she says. "PR companies have the opportunity to make themselves more relevant and take hold of this medium before it is 'siloed' into a marketing and sales role."

While demand for public relations services is growing, MacLellan at Environics says it takes more than just being present in an expanding market to be successful.

"Success in business comes from having the right strategy and the discipline to follow it," he says. "From our first day, our singular objective has been exceptional customer service. And now the proof is there; if you focus on that, your other business objectives will take care of themselves, namely revenue."

While customer service has played a central role, other strategies have also generated success. A key decision at the company's conception was to link the public relations agency with research and consultancy firm Environics Research Group, which provided it with startup capital, resources and a respected brand name.

Another strategy has been to stay ahead of the game. In 1995, Environics Communications became the first Canadian-owned public relations agency to open a U.S. office, a move MacLellan says was critical to improving competitiveness. Then, in 2008, the company was proud to become the first carbon-neutral public relations agency in North America.

MacLellan says he also believes in establishing healthy workplace practices, including recognizing the importance of staff spending time with their families.

"Your people are your business," he says, noting that the retention of good staff strengthens client services and relationships and also helps maintain and build skills.

To do this, Environics Communications offers more than annual bonuses. There are annual company outings to concerts such as Coldplay, company retreats (last year's was in Fort Lauderdale, Fla.) and paid overseas vacations for long service -- rewards that include every staff member from the receptionist to senior management.

MacLellan also encourages regular training in anything from communications to pottery.

All this has resulted in Environics Communications having one of the highest staff retention rates in the country.