Public relations outsourcing: India’s edge

I just saw a report on the increasing hourly rates in the public relations industry in the US. Slowly but steadily public relations is attaining as much importance as professions like legal and accounting in the US.

While this is heartening, there is a cause for worry for countries like the US on another front: outsourcing (read what I wrote just two days back). I will come to outsourcing a few paragraphs later…

In the US, hourly rates of public relations agency professionals have increased dramatically, according to a survey by M&A and search firm StevensGould Partners, New York.

Jack O’Dwyer’s newsletter reports that PR agency CEO’s billings are now in line with counterparts in the legal and accounting field. “The US average hourly rate of a PR agency CEO has hit $322, a figure that rises to $364 an hour in New York and $344 in Washington, DC… CEOs at firms with billings of more than $25 M billed out at an average of $470 per hour.”

In the US, the hourly rate of an account executive is now $140, senior account executive $161, account manager $202 and VP $226.

Now on to outsourcing. In India, though no authenticated data is available, one could consider a ballpark figure of around $40 per hour for an account executive working in one of the top agencies in Mumbai and New Delhi. The rate would fall drastically in the case of smaller agencies even in these cities. It would take a further dip in cities like Bangalore and Chennai.

Bangalore’s EmPower Research has been doing media monitoring for several PR and advertising agencies. Equally well known is the fact that organizations like Reuters have already outsourced journalism and data processing to India.

Sources indicate that at least one global PR giant has already initiated plans to outsource low-end work to India. The outsourcing trickle is expected to turn into a torrent soon. Watch this space.

Hoffman’s new Asia Pacific MD

The Hoffman Agency, a global public relations firm focused on the high-tech industry, has announced that Susan Tomsett will be the company's new managing director for Asia Pacific. Tomsett will begin her post on August 1, 2006.

Tomsett brings 15 years of experience in Greater China to the role. Most recently, she was chief operating officer of Burson-Marsteller Greater China where she oversaw a client portfolio of $8 million and 120 account professionals.

Her clients have included technology companies ranging from Microsoft to Qualcomm to Yahoo! to Intel. She also has experience beyond the technology sector with clients such as British Petroleum, Unilever,Wal-Mart and Virgin Atlantic.

"We're delighted that someone of Susan's caliber and experience will be leading our charge in Asia Pacific," said Lou Hoffman, CEO of The Hoffman Agency.

"Technology is changing nearly every industry in the world, and has become a key economic driver in Asia," said Tomsett. "I look forward to being part of a vibrant and entrepreneurial organization at the core of high-tech communications in the region."

Public Relations: India and outsourcing

Less than two years ago, the PR world saw many screaming headlines:

PR firms consider passage to India

...and now PR outsourcing!

Has anything significant happened since then? “Nothing substantial in terms of outsourcing!” If that is your conclusion, you might not be completely wrong! But you might not be bang on the dot either!

Driven by growing opportunities, the Indian PR industry has been witnessing fast-paced changes. More professionalism. More systems. More processes… And, of late, the entry of global PR giants.

Further accelerating change is the phenomenal growth of India’s economy and, in turn, the public relations industry. As for the PR boom, credit is due to the increasing awareness among Indian corporates about the potential of public relations.

Aware of the immense potential, many global public relations players are now looking at India, primarily to broaden their reach. WPP CEO Sir Martin Sorell is bullish about the PR industry’s growth in Asia.

“I use Indian companies for a lot of background work,” David Bell, Co-Chairman of the Interpublic Group, has said in a recent interview. “ For instance, if a new pet food is to be launched, I commission Indian companies to scour the Internet for high quality, background checks and research on pet foods, which doesn’t cost as much. But if you are referring to classic outsourcing, where I just pick up the phone and ask India to come up with a creative commercial for Microsoft, well, that certainly will not happen, in a long time to come!”

In other words, India’s cost advantage has been gnawing at resistance to outsourcing low-end work. To borrow Oscar Wilde’s words, the only way to get rid of the outsourcing temptation is to yield to it. Sooner or later!

Will this happen at the 2006 ICCO (International Communications Consultancy Organisation) Global Summit, to be held in just a couple of months in New Delhi? Difficult to find an answer! However, the fact that the annual ICCO Summit is being organised for the first time in Asia speaks volumes of the continent’s growing importance.

Equally important is the list of Summit speakers. Among those who would address the Summit include Burson-Marsteller Founder Chairman Harold Burson, Weber Shandwick CEO Harris Diamond, Porter Novelli CEO Helen Ostrowski and Text 100 CEO Aedhmar Hynes.

In case these speakers encounter the media, they will definitely face the Indian journalists’ probing questions on outsourcing!