Take an Economist article on the rising fortunes of PR firms as you will. Big PR firms with crisis-prone clients and those who have gotten a handle on social media apparently are doing quite well. Others, however, have been hurting.
"According to data from Veronis Suhler Stevenson (VBSS), a private-equity firm," The Economist reports, "spending on public relations in America grew by more than 4% in 2008 and nearly 3% in 2009 to $3.7 billion. That is remarkable when compared with other forms of marketing. Spending on advertising contracted by nearly 3% in 2008 and by 8% in the past year."
"PR’s position looks even rosier when word-of-mouth marketing, which includes services that PR firms often manage, such as outreach to bloggers, is included. Spending on such things increased by more than 10% in 2009."
Yet, adds The Economist, "Not all PR firms did as well as IPREX, a global consortium whose revenues increased by 14% last year. Many had to shed jobs, and some estimates show the industry’s overall revenues declining, although not nearly as sharply as those of most of the businesses it serves."
According to a survey by StevensGouldPincus, a consulting firm for the communications industry, nearly 64% of participating firms saw revenues slide in 2009 and only 23% saw revenues increase, perhaps because businesses put their faith only in the biggest and most established firms."
Certainly building and promoting a PR firm's strategic or social media capacities makes a lot of sense. That's where PR seems to be really cooking, along with taking advantage of changing media patterns.
"PR has also benefited from the changing media landscape," The Economist notes. "The withering of many traditional media outlets has left fewer journalists from fewer firms covering business. That makes PR doubly important, both for attracting journalists’ attention, and for helping firms bypass old routes altogether and disseminate news by posting press releases on their websites, for example."
The really good news for PR in these troubled economic times is apparently lots of room exists for imaginatively conceived initiatives capitalizing on the Internet (like business blogging) and/or shifting media tides. We thank Ragan Communications for alerting us to the Economist piece.
Illustration by Claudio Munoz