Magazine article Marketing

Crisis: What Crisis?

Magazine article Marketing

Crisis: What Crisis?

Article excerpt

Big companies seem reluctant to insure their brands by employing crisis management teams. The damage to reputations could be huge. Clients should think again

Surprisingly, and disappointingly, this segment remains one of the smallest across the industry with only modest year-on-year growth. The offer of corporate and brand insurance simply hasn't taken off.

Odd, really. The importance of corporate reputation and the corporate brand to profitability is well understood by chief executive officers and marketing directors. It is a failing, therefore, that clients still see crisis management as an extra to their budgets rather than an essential, albeit defensive, part of their communications armoury.

Indeed, it comes as a shock to many brand managers to receive an explanation of exactly what, in brand and revenue terms, a crisis could mean to their standing in the marketplace. But the top three players in this market turn over under |pounds~2m between them. Overall, the top ten in this category turn over less than |pounds~3m.

There are, of course, a number of possible explanations. For instance, more companies may be taking crisis management seriously, but for most it will not be a major item of expenditure -- beyond planning and training -- until a crisis actually breaks. Almost by definition, this is a rare event.

It may also be worth noting that this area is one of traditional high secrecy and, therefore, some agencies may have been a little shy in declaring interests and turnover here. Certainly, many decline to name clients in this area. Additionally, as ABS Communications' managing director Alan Bailey puts it: "These days, everything includes crisis management." Some consultancies may have had problems stripping out from other turnover figures those only identifiable with crisis work. Furthermore, despite a fall in promiscuity among PR consultancies, clients still feel that such "secretive" plans are best handled within specialist in-house corporate communications teams.

Not everyone is pessimistic about prospects, however. Although the top 50 UK companies spend a considerable amount on crisis management, many more have actively supported this area of PR through the recession, perhaps in a more modest way, suggests Chris Woodcock, the director who runs Countrywide's crisis management unit. …

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