It used to be that when the financial markets dragged down the economy and corporate bottom lines, public relations budgets topped the list of spending cutback targets.
These days, even as the swooning markets erode consumer spending, there’s potent optimism that PR budgets will remain intact—and possibly even grow. The proof comes down to 10 years of ups and downs and, through it all, an expanding, almost recession-resistant PR industry.
In a frank conversation with PR Daily, WCG Chairman Jim Weiss said that he started his company 10 years ago, as a one-person shop. Since then, there have been numerous market slides, the Sept. 11 attacks, and political changes.
Still, Weiss grew his San Francisco-based firm to one of the largest companies in the sector. This year alone, the company’s business is up 30 percent and it has 250 employees. Even the big boys—who count a who’s who of corporate America among their clientele—are expanding. Independent PR giant Edelman logged global revenue of $575.1 million in the 2010-11 fiscal year, up 18 percent year-over-year from $487.2 million, according to reports.
A report from private equity firm Veronhis Suhler Stevenson (posted on the Public Relations Society of America website) found that annual spending on public relations services in the U.S. will increase 55 percent between 2008 and 2013, to $8 billion.
What’s changed to make the PR sector downturn-proof?
PR professionals said the industry is nicely situated on the frontlines of issues affecting companies and their customers in good times, and even more so in bad times. PR counsel has become especially valuable during times of turmoil, primarily due to the advent of social media and the changing communication landscape.
There’s also the value-added proposition that PR delivers more cost-effective results, particularly when compared with advertising and marketing.
“We are cheap and produce strong results, and I’m not sure you can say that about marketing budgets,” Weiss said.
Keith Trivitt, associate PR director at the Public Relations Society of America, said businesses have realized that those emerging faster and more robust in terms of revenue growth and sustainability after an economic downturn are those that invest in messaging during shaky economic patches.
“It seems counterintuitive, but it is often the businesses that retreat with their strategic planning, marketing, and PR that fare worse coming out of a downturn,” says Trivitt.
We’ve had a chance over the last decade to see the results of that PR planning, and based on a proven track record, it looks like we will get another opportunity to confirm PR’s resiliency.