Global credit crunch, unrest hit PR agencies

Thailand's public relations industry is expected to suffer a sharp decline this year due to global economic problems. Plus, the unrest caused by rallying pro- and anti-government camps and political turmoil have destroyed the confidence of investors and tourists.

It has been suggested that public relations be used strategically by the government to regain the trust of investors.

Danai Chanchaochai, chief executive officer of DC Consultants and Marketing Communications, said the total spending allocated by government and private sectors on PR activities was expected to slowdown this year.

"We expect overall spending on PR campaigns to drop to just 10

per cent in terms of growth this year. This is down from between

15 and 20 per cent of average growth annually over the past several years," Danai said. He added that the company had seen a delay in PR spending by its government clients.

"The ratio of government projects dropped significantly this year from 25 per cent of our PR revenues to only 10 per cent. About 55 per cent of our revenues came from private clients, and another 35 per cent by international firms," he said.

"We expect to see more intense competition between PR agencies next year, which will provide not only general services, but specific solutions to their clients," he said.

Hasan Basar, managing director of Bangkok Public Relations, said 2009 would be quite unpredictable because the state of things depended largely on a stable government and its ability to soften the blows of unemployment, dropping incomes due to a decline in exports and the suffering in the tourism sector.

"Bangkok PR's strategy to focus only on a select list of clients and provide them with high-quality counsel and services is helping us. Our 2008 billings and performance has been higher than 2007," Basar said.

Nimitz Modrakee, chief executive officer of 124 Communications, said this was the first time in history that Thailand had suffered the double blow of political instability and a global economic crisis.

"We don't think the local PR industry will see any positive performances this year," Nimitz said, adding that private companies had cut their spending heavily.

"The ratio of private clients dropped this year from 50 per cent to just 40 per cent of our revenue. However, we can increase a crucial portion of the revenue from government projects," said Nimitz.

The company's government clients included PTT Exploration and Production, Thailand Post, Intellectual Property Department, Airports of Thailand and the Office of the Senate Secretary.

"The political unrest has had an impact on Thailand's image and the confidence of foreign investors and tourists. The government needs to step up its PR activities to rebuild the 'Thailand' brand, and regain the country's reputation," he said.

Nimitz said 124 Communications was not expecting any increase in revenues this year.

"During these difficult times, we need to think more about survival than growth. However, we are still confident in Thailand's great economic fundamentals and its promising future," he said.