The study, which attracted 437 respondents from across the globe, finds a concerted shift in attitudes, including an overall upturn in business and budget sentiment compared to the first two waves of the survey, which took place in March and May, respectively. All of the results can be viewed via the interactive slides in this story, with further coverage to follow this week.
In-house communications budgets, in particular, appear to have rebounded during the past four months. Just 32% of clients now predict a decrease in their communications budget, compared to 45% in May.
On the agency side, meanwhile, 53% of firms report a loss of earnings due to Covid-19, compared to more than three-quarters of respondents that predicted such an outcome in March and May. A similarly reduced proportion (35% vs 58% in May) said they implemented a hiring freeze, while support for pay cuts (27%, down from 42%) and layoffs (22%, down from 34%) has also dropped considerably.
Encouragingly, 25% of agency respondents report increased business as a result of Covid-19, up 11 points since May, while 16% point to a negligible business impact from the global pandemic, up from 7% earlier in the year.
That sense of optimism is reinforced by client attitudes towards hiring external counsel. 34% of in-house respondents are more likely to hire external counsel now, a jump of 23 points compared to four months ago.
So far, according to agency respondents, the downturn continues to result mostly in delayed/cancelled campaigns (71%). Agencies are seeing similar levels of retainer reductions (52% vs 56% in May), although payment delays have improved (29% vs 41%). 43% report increased work, slightly up on 39% in May.
“The results spell welcome relief for the industry because they are much more positive on every aspect we measure,” said Stickybeak founder David Brain. “That doesn’t mean it’s not still tough or that there won’t be further victims, but it does look as if the worst is behind us for now.”
Renewed business confidence is also indicated by the communications challenges facing clients. Workplace disruption (47%) regains the top spot it held in March, after being overtaken by customer disruption and sales/earnings concerns in May. Staff health also rises eight points to 44% while there is a corresponding decrease in those that cite layoffs (15%) as a challenge.
Even so, while employees remain the top priority for in-house respondents right now (39%), only 43% of agencies and 20% of clients report increased demand for employee engagement consulting. Indeed, 17% of clients say they are reducing employee engagement services from agencies, which may suggest that they are increasingly confident of their ability to handle the workplace changes that have ensued in 2020.
When it comes to specific services that clients are seeking, there is further cause for positivity. Only 30% of clients select ‘none’ compared to 40% in May, when it was the most popular choice. Instead, public affairs and corporate communications (33% each) now top the list, according to in-house respondents, while agencies point to corporate comms (72%) and crisis counsel (67%) as the top two services clients are seeking today.
Agencies report that consumer/brand marketing remains the hardest hit sector, with 55% making it the most popular choice under services that are being reduced, although that proportion reflects a 24 point increase in sentiment since May.
Meanwhile, a welcome development sees clients moving away from reducing agency services: 62%, by far the highest proportion, say that they are not reducing any agency services, compared to 38% in May — when they selected consumer/brand marketing as top choice. Instead only 16% point to a reduction in consumer/brand spend now.
“I’m still struck by the resilience our industry derives from its flexibility,” added Brain. “Most agencies and in-house teams seem to have been able to switch focus to the new areas of business priority like back-to-work issues and customer disruption as well the perennial tasks like revenue growth. Sometimes PR’s pragmatic and more generalist business advice approach is seen as a weakness. Not in this pandemic it appears.”