ICYMI: The demise of New Brunswick’s Mad Men (and women)

I’m not sure why this bugs me so much but it does.  I really dislike the fact that New Brunswick’s advertising and PR business is so piddly compared to everywhere else in Canada.  Below is a recent column I wrote on the subject.    After the column, I got a few emails from the biz with some interesting viewpoints.    I like what Derek Riedle is proposing as a new direction for Revolution in Saint John.  I have a soft spot for that firm – not sure why – kind of a gritty group.   At a fundamental level I don’t get why we (NB) can’t get good in some niche areas and compete far and wide. 

 

Statistics Canada published its latest data on the advertising, public relations, and related services sector this week and the numbers for New Brunswick’s industry continue down a grim path. We are witnessing the demise of the Mad Men, or more accurately Mad Women, in this province.

Operating revenue for the industry dropped by another $4.6 million between 2010 and 2011. Total industry revenue is down by 32 percent between 2007 and 2011 while it has increased by seven percent across the country.

Total revenue in the New Brunswick advertising, public relations, and related services sector equates to only $30.70 per capita. That means our Mad Men/Women preside over the smallest industry in Canada adjusted for population size – by a wide margin. Across Canada, this industry generates over $200 per capita.

To illustrate just how small our industry is, New Brunswick’s advertising and PR business generates 85 percent less revenue than the industry across Canada and 40 percent less than its nearest competition in Newfoundland and Labrador – adjusted for the size of the population.

I have been tracking this downward spiral for several years and, despite talking with many of the industry’s luminaries, I haven’t received a satisfactory rationale for this decline.

I’m told that the regionalization of the industry means that more work is being down outside the province than ever before. Several industry leaders told me big firms such as Bell Aliant have been whittling away work in New Brunswick for years. Others say more traditional clients – including government – are moving work in-house furthering the decline of the industry.

Industry profit margins continue to slide. In 2011, the industry’s operating profit was only 6.4 percent down from an annual average of around 10 percent for most of the past decade. In fact, New Brunswick’s advertising, public relations, and related services sector has the dubious distinction of having the lowest profit margin among the 10 provinces across Canada.

I have been raising the red flag on this for several years but all I get is a collective shrug. Industry leaders tell me the decline is mostly inevitable. Government types ignore the sector all together because it doesn’t fit into one of their ‘target’ industries. Meanwhile, a font of creativity and the knowledge economy gets whittled down to virtually nothing. It is a failure both entrepreneurship and economic development policy.

Contrast this debacle with engineering services in New Brunswick. Through entrepreneurial ambition, the engineers have built tremendous expertise over the years in areas such as energy, water/waste water and municipal infrastructure. Using their business in New Brunswick as a base to build expertise, the industry has gone global.

In 2010, the engineering services industry in this province generated $516 per capita – not much below the $660 per capita generated by the industry across Canada. Importantly, engineering services revenue in New Brunswick has exploded in recent years rising from only $150 per capita a decade ago.

If it is not too late, we need to see if New Brunswick could carve out its own niche in the advertising and PR sector. Built it up here and take it global – just like those stuffy and buttoned-down engineers.

New Brunswick has several software firms active in the social media space and a pile of national and international call centres and back offices. With a little thought and creativity – and a little more ambition on the part of the industry’s leaders – maybe we could become really competitive in this area.

Government needs to step out of its comfort zone as a bank for industry and be far more creative itself when it comes to economic development. It also needs to get away from strict ideas of what ‘target’ sectors should be. Opportunities can come from anywhere and we need to keep our eyes open and our ear to the ground.

Economic development has a lot of moving parts. Maybe we should put the engineers in charge.

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One Response to ICYMI: The demise of New Brunswick’s Mad Men (and women)

  1. NB still has not figured out it’s approach to trade development and has not really put the big push on t
    o make it a key piece of economic development. Nova Scotia is really kicking our butts in my opinion. Check out the programs delivered through Nova Scotia Business Inc. They have 4 different funding programs to encourage trade. NB has 2 and one is so tech specific that is is not very…well..useable to the common SME. The other is some funding reimbursement to attend tradeshows etc…but, that has been shown not to be enough. Every province is pondering this right now. NS, BC and Sask seem to be leading the way.

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