PR through a downturn: don’t put your head in the sand

In an economic downturn, effective stakeholder communications, including through the media, are more important than ever.

As the second half of 2024 begins, the financial picture in the US is looking increasingly positive, with the Fed indicating rate cuts are close, on the back of more good news on inflation that has helped to buoy the current bull market.  And, contrary to what research suggests many Americans believe, the US isn’t in a recession (yet, risks do persist).

But the economy is still pretty sluggish, with the IMF’s most recent projections for global growth being held back at least in part by flat-lining US GDP.

When deals are being made, companies are going public and borrowing money is cheap, speaking to the media can feel like, to use a baseball analogy, swinging at pitches down the middle for financial services professionals.

But then when the economy starts to throw junk pitches, and financial activity starts to slump, a head in the sand approach can be the instinctive reaction with conversations with reporters potentially more challenging, and on difficult subject matter. Nobody wants to talk about the misfortunes of their industry and find themselves the voice of an economic downturn – or even a potential figure of blame.

While apprehension is understandable, it’s misguided.

A major goal of media relations is to demonstrate deep subject-area knowledge so that clients, contacts, investors, or prospects will see it, reach out and start a conversation that can lead to new business. The need for this doesn’t go away when times are bad; arguably, it becomes more important. The start of a downturn is often the moment when clients most need to hear from a calm, steady and informed voice. Indeed, companies will be judged by how they are seen (or perceived) to treat their stakeholders, not least people and clients, during the tough times – making being present and visible essential. In a crisis, including an economic one, reputations can be damaged by “going dark,” and failing to communicate.

Being bold during the quiet chaos of a downturn is, when thoughtfully executed, a chance to bolster reputation – grounded in trustworthiness, knowledge and commitment to clients.

The Crash

Sometimes, negative economic news will begin with a sudden crash and later turn into a sustained downturn. A prime example is last year’s collapse of Silicon Valley Bank that sent shockwaves through the economy – from venture capital to regional banks to startups – that are still being felt today. When disaster struck, reporters were tasked with making sense of what it all meant and needed to be able to provide context in their coverage.

Experts who can provide nuanced and concise analysis of a given situation, including what those in the industry can do to weather the storm, will be valuable commentators for media hungry for knowledge and insight.

Have immediate advice for clients on what to do at the outset of a crash? Can you provide historical context for similar situations?  Do you have a strategy to offer for navigating the current climate? Whatever it may be, providing quick, high-level commentary to reporters, who are often themselves looking to cover the issue quickly, is effective and sets up the rest of your strategy for success.

In the following days, do you have additional analysis of what just happened and how the industry should prepare for the immediate future? That type of insight is valuable for clients, as well as reporters who are looking to file “second-day” stories that pick up the pieces of what just happened.

The Downturn

Once the dust settles from a crash, the prospect of a long, sustained downturn sets in during which a return to the boom times seems impossible. Even in this period, opportunities remain for engaging with the media and, more generally, companies who continue to invest in marketing and their reputations over downturns have been shown to come out stronger the other side and more ready to ride the wave of recovery than the competitors who cut back on comms.

Where economic events result in political or regulatory response, such as congressional hearings and federal investigations, there may be opportunities to be a cheerleader for your industry. It can be a fine line to walk but working with public relations and communications experts to fine-tune a compelling and credible stance can have significant payoffs. Yes, reporters want to hear from you, but clients and colleagues alike are also looking for perspectives from which they can find guidance.

Regulatory announcements, new guidelines and rules, are also often key moments for engaging in media commentary. Demonstrating a nuanced understanding of the regulatory landscape can create valuable business development opportunities and help foster relationships with reporters looking to provide straightforward, understandable content on complex topics. Commenting on regulatory issues is a relatively “safe” practice to continue to establish deep industry knowledge without needing to dwell on “rights and wrongs” or the actions of particular companies or individuals.

During a downturn, many may also look to alternative financial vehicles or areas that flourish during adverse economic times. Being able to speak to these can provide unique talking points when the larger conversation is focused on the negative.

Financial services professionals can also consider writing a contributed article for a relevant trade publication to provide analysis and demonstrate the application their expertise to real-world issues. Given the author has a degree more editorial control over the content, managing the narrative and avoiding potentially tricky questions are added bonuses to this approach.

The Thaw

As a recovering economy dawns on the horizon and the deep market freeze starts to thaw, providing look-ahead commentary can help sustain media relations efforts until a rebound is in full swing.

Examples may include analyzing quarterly trends and providing high-level guidance on what clients or potential clients can be doing now to best position themselves for a market boom. As the markets show signs of reopening, significant milestones – such as billion-dollar deals being made, IPOs being announced, interest rates falling, or other developments signaling confidence – can also serve as timely opportunities to engage with the media.

Offering a voice at this point to reporters covering the markets can also help drive relationships and establish your position as a source for commentary when things do turn around.

In Closing

During good economic times and bad, any media relations strategy should closely align with overall business objectives. Media engagement shouldn’t be abandoned when the economy hits a rough patch – but the story being supported may pivot from being one of growth and activity, to one of calm confidence and stakeholder reassurance.

A relative quiet among the markets and a need for reporters to provide context to readers increases the need for clear and insightful voices in the media, creating significant opportunities for Financial Services firms and experts to reinforce their reputations.