fter the bubble burst: what now for Spain in the age of austerity?

8 years, 8 months ago

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Spain’s economic miracle proved to be unsustainable and the country now faces many difficulties. Yet even in tough times, opportunities remain. By Alberto Mélida.



t was only few years ago that Time Magazine wrote on its cover “In the arts and architecture, business and foreign affairs, food and sports...SPAIN ROCKS!”.  

 
In 2007 Spain surpassed Italy in per capita GDP and for a short period of time it became the seventh largest economy in the world. Almost nobody seemed to be worried about the huge property bubble behind this “Spanish miracle”.
 
More recently, whenever Spain has appeared on covers of the international press it has usually been to talk about financial instability if not about evictions, strikes, austerity and even hunger. Wordplays about “S-pain” have become commonplace. What happened?
 
The country that capitalized most on the benefits of joining the EU in 1986, is now paying a hard price in the European sovereign debt crisis, and its middle class – one that didn't benefit from the property bubble – is paying the price in the form of recession, unemployment and hard austerity.
 
So does it make sense to invest and do PR in Spain now?
 
It makes sense as much as in any of the other big EU countries. Spain is the fourth largest economy in the Eurozone, and thirteenth largest in the world. It is dynamic and with a solid grounding, despite the difficult current situation. 
 
Most of the growth of the pre-crisis years was based on construction and domestic demand, so it might look difficult to find new means of development, but the fact is that competitiveness and exports rapidly increased in 2012. Spain will grow when the rest of the EU does and doubts about euro are cleared out.
 
Key points to consider
 
If you are planning to do business and PR in Spain now, there are some factors to be taken into consideration. First of all, it is a country still suffering from recession, and this brings some obvious consequences. People consume less, many can’t afford to spend much, others can afford to buy but prefer to save money and even those that are well-off keep from showing off too much.
 
It doesn't mean that the economy has stopped. Indeed, people have continued buying smartphones, travelling, eating out, etc. It's just that people tend to be much more price sensitive and have developed a sense of “smart shopping”. They still need to buy clothes, but they will pay more attention to the price and look for designs that can be combined in different ways and last longer.
 
A good example of this change in consumption practices is the traditionally well-regulated post-Christmas Rebajas (sales). In general terms these have become almost irrelevant because aggressive promotions are offered year-round.
 
The decline of Rebajas is also related to the logistics revolution led by the Spanish clothing retailer Zara – an example of an important new aspect of doing business in Spain. Times of crisis are also moments of opportunity for companies offering something different and disruptive, so if you are offering something that for any reason is really different from what is currently available, now would be as good as any other moment to introduce it to the Spanish market.
 
PR in Spain today
 
Doing PR in Spain is not much different than in other developed western countries. Communication is becoming more and more global, and if you work for a global brand you will need to handle your reputation with a global perspective, but each country has its own specific characteristics that you will need to understand and respect. This is not limited to Spain alone.
 
The big changes that are currently taking place in the Spanish PR sector respond also to global tendencies, but with some specific aspects to take into consideration. The media landscape is changing fast all around the world, but in the case of Spain the changes and crisis of traditional media – print media, television as we know it, etc. –  have come together with other effects.
 
Media landscape in Spain
 
Imagine an economy growing fast (almost 4% in 2007, a lot for a developed country), with plenty of money from the construction bubble being invested in media with the aim of gaining political influence. At the same time, a lot of new private universities are offering communication-related studies. 
 
Imagine that the bubble bursts in the middle of a global crisis. Advertising investment almost vanishes and people buy fewer and fewer newspapers. Public television channels (national and regional) reduce staff and private broadcasters merge to reduce costs.
 
This is the current media situation now. Madrid Press Association estimates that around 10,000 journalists have lost or will lose their jobs between 2008 and 2013. Those that have kept their jobs have seen their salaries cut, are often overloaded with work, and tense due to the difficult conditions they have to face. On the other side of the PR arena, the number of people doing PR is greater than ever, as many of the unemployed journalists are trying to make a living out of freelance PR activities.
 
This means that media relations must be handled carefully, in an effort to simplify the job of the journalist by providing relevant information that allows them to do their job. More than ever, those professionals want to avoid anything that could be considered as SPAM or a waste of their time.
 
Regional PR
 
Maybe for some departments of a company, Spain could be considered a single market integrated into the EU. However, from a Media Relations perspective, Spain is an asymmetrically federal country, with 17 autonomous regions, 50 provinces, two autonomous cities and five official languages. Doing PR in Spain requires a sensibility and knowledge of the regional media that is sometimes ignored by Madrid-centric or Barcelona-centric PR Agencies.
 
As in the rest of the world – but at a faster pace due to the difficult situation previously explained – PR is changing, and conventional media has become much less important in terms of communication between companies and society. The communication tools in the hands of customers are more than ever bidirectional and conversational. Companies, media and advertisers are adapting and learning fast, sometimes the hard way, to listen to their customers. References to social tools such as Twitter, Facebook, Youtube are constantly present in the media.
 
Most mainstream media use Twitter as a conversational tool suggesting hashtags to their audiences while they watch TV shows and even political parties label their lecterns with twitter hashtags.
 
In this context of internet and social media overcoming traditional media, conversation and content are the keys to the future of PR, so long as they are not only oriented to journalists but to the actual audiences too.
 
There are unique situations in the use of social media in Spain (e.g. the social network Tuenti), but in general the social media landscape is similar to the one in other western economies, and what remains most important is the creation of quality and relevant content in Spanish.
 
Depressed and infuriated
 
And speaking of content, we'll close by pointing out that the more sensitive a society finds itself in moments of social unrest, the more attention should be paid to the messages delivered to our stakeholders. Spanish society is both depressed and infuriated. Credibility from all institutions has been seriously eroded, from the King's house to the local authorities. 
 
That lack of credibility affects the corporate sector, too. The Spanish people need positive messages, but now more than ever distrust any PR effort if they don't feel it to be honest, genuinely sensitive, and understanding of the current situation. 
 
So if you think you have something to say to a Spanish journalist, blogger or potential customer, you had better not start talking about how big you are and how strong your global leadership is. It would surely be better to listen, understand your niche, and make sure you have something really different to offer. 
 
Thought Leader Profile
 
Alberto Mélida is managing director of Dubsar PR in Spain, a Public Relations Agency based in Madrid. For almost five years he worked as information campaigns consultant for the European Commission. Before returning to Spain he worked on different communication-related projects in the US, Mexico, Brazil and Jordan.
 

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The Author

Alberto Melida

Alberto Mélida is managing director of Dubsar PR in Spain, a Public Relations Agency based in Madrid.

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