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Corporate 50 2013 Back to Reports & survey Listing

The results are in for this year’s Corporate 50 survey and the corporate communications sector, like the rest of the economy, doesn’t seem to be out of the woods yet.

There are encouraging signs though. Many describe the past year as “busy” and “tough” but easing with hope that the next year will be better. The Olympics played a big part in the sector’s overall fortunes providing a welcome boost for those that were lucky enough to land the clients that wished to ally themselves to the Games. Many report a year in which the climate felt like it was warming up again. “Clients were commissioning more projects than in the previous few years, but budgets were still challenging,” says H3 Productions. Cheerful Scout echoes that sentiment saying that “undoubtedly there have been more opportunities than in the previous year, although budgets often remain challenging.”

So budgets aren’t easing, but the work is returning. And there’s a sense that clients are beginning to value creativity and ambition in their communications once more rather than sticking to the safe option. “Clients have become more daring in their creativity,” says Pretzel Films. “This is partly due to the competition of the markets they are in and their need to fight for their space with the best, most creative films.” Many report that clients are beginning to be in the right frame of mind to try new things again. “Clients continually look for more for their budgets,” says Speakeasy. “However we have seen a bit of a shift for these clients to be willing to look at fresh ways of communicating with their audiences. We arre starting to leave behind the ‘let’s go with the same safe route’ approach.”

The good news is that the turnover of the average corporate communications outfit is up on last year’s figures. 63% of respondents reported that their turnovers were healthier this time with 20% saying they had stayed roughly the same. That average turnover figure now stands at £6.7m for this year’s survey, a rise of over a million from last year’s £5.57m.

But while every cloud has a silver lining, a lot of silver linings often have the unfortunate attachment of a cloud. While turnover has risen, the same can’t be said of the average budget and profit figures. The average pre-tax profit figure has dropped to £258k in this year’s survey from last year’s £289k. There’s been another decline in average budgets too. The average budget for a “moving image content” project that the stats throw up is now set at £23k, down from £29k last time. Budgetary constraints now seem to be part of the picture with no one predicting an eventual rise, whatever happens in the larger economy.

The figures reflect much of what the respondents to the survey are saying, that there is more and more work out there, but clients are screwing down hard on cost. And alongside that, clients, who are looking to communicate in many different ways across many different channels, are looking for a larger number of ‘smaller’ projects a year rather than a few big budget films. “The era of big budget corporate films telling the world a little about a client has gone,” says Tailwind Media. “However in its place is an explosion of smaller much more commercial video for marketing and sales purposes.” Straker Films has also noted the change. “We are finding that there are less of the ‘all singing all dancing’ commissions out there but the volume – the number of productions per year – continues to increase.”

Asked for the challenges and concerns that their company and the sector as a whole is now facing, many respondents put the Eurozone crisis and fears of a triple dip recession high up on their list. These things affect everyone of course, not just the corporate communications sector. But lack of confidence in the business world means spending is reined in and the marketing budget is often on the tightest leash. After so many years of economic uncertainty though, most corporate producers have had to adapt to a climate that now seems entrenched. “The climate is still tough but after several years of recession it’s a case of getting used to the way things are done now,” says Big Button. “So clients expect more for their money, they deliberate for longer when commissioning, and they tend to be generally much more cautious about the ideas they pursue. That’s the way things are, so we work around these challenges and always try and innovate and add value.” Barford concurs that this is now the lay of the land. “The current UK, European and global economic climate is the new normal – and we have the survive and hopefully thrive in this environment.”

But that environment causes nervousness among clients and that’s borne out by many respondents’ comments. “The occurrence of cancellation and postponement has been more frequent than we usually experience,” says Aspect and that’s echoed by Radley Yeldar which reports that, although things have been “very good in some respects with lots of opportunities, many clients have had limited visibility of projects meaning lots of last minute projects and requests and also lots of last minute cancellations and postponements.”

The greenlight for a project comes later and later, meaning corporate producers have to think on their feet when the work comes in. “2012 has been another challenging year for production, as lead times become ever shorter,” says Imagination. “We focus on quickly generating fresh ideas that can be delivered within a restricted production period, without compromising on ambition or quality.”

Nervousness among clients also means increased demands to see what they’re going to get before they get it. “Some clients are demanding more creative upfront, endless iterations of proposals only in some cases to come back and say the budget has been pulled altogether,” says ST16. “The cost of acquiring business is currently extremely high with some clients.”

And, as many clients are slow to commission work, they also seem more reluctant to pay for that work. The Edge says that the “way in which many large organisations still persist in abusing contracted payment terms” has created “huge pressures on cash flow. This continues to cripple small businesses and is the one single biggest issue that the government should be addressing if they were ever to become serious about helping SME’s in this country.”

A more endemic problem is caused by camera and editing technology becoming cheaper and cheaper, reducing the barriers to entry. Now, corporate production companies don’t just have to compete with one another, they also have to compete with a whole host of others who will provide some ‘video’ at a knock down price or simply as an add on to the PR or website build they’re already providing. The challenge for corporate communicators is to show to clients that what they provide isn’t just the kit. “The cost of making videos has never been lower but what has not changed is that a film is only as good as the team behind the camera,” says Proudfoot. “Commissioners from many companies, even the large ones, simply don’t understand that, when it comes to film, the old adage about peanuts and monkeys really does apply.”

So producers need to be able to push their credentials more and more. “Production companies will need to be able to prove that they offer value for money and not just more of the same,” says Dene Films. “Fortunately, some clients will continue to pay for excellent creativity.”

And that creativity now has to range across a wider range of mediums. The age of production companies just providing a piece of film is disappearing. Clients want to communicate in lots of different ways across many different platforms. And that means as well as film, corporate producers must understand how to push a message though “websites, social media, social video, video search, mobile content on mobile apps,” says Brandcast. “Our key offer is video content creation – and then video content marketing through all the channels. Integrated video and digital media service offering is the key for our future.” That offering will be crucial for all. “Production companies who cannot help clients with their delivery needs will find themselves running behind in the race,” says World Television. “Clients are increasingly concerned with distribution.”


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