The USC Annenberg Strategic Communication and Public Relations Center has issued a report analyzing the recession’s impact on the PR industry. The good news? PR seems to be pushing through today’s economic problems with less bloodbath than previous recessions. OK, so maybe it’s not “good” news, but it’s encouraging.
Think about the dotcom crash. Working in Boston, with its large number of technology companies, in 2001/2002 was not pretty. Large firms got significantly smaller, small firms disappeared, “sole practitioners” filled the streets, and internal PR and marketing teams were decimated. Granted, that recession was not as widespread as today’s, but in this town so many agencies had so much skin in the tech sector, pain was all around.
Did agencies learn lessons from the early part of the decade? I think so. We manage our businesses better, staff more appropriately, and the stronger firms have become more judicious about working with clients that “get it.”
Is there still pain? Sure. Many firms have had layoffs. My “Smith Index*” is running high. Budgets are lower.
But there is still activity. We are getting a steady stream of RFPs across our primary PR sectors: financial/professional services (they need us more than ever), education, healthcare, consumer goods and travel. The USC report states that financial services and healthcare are two of the revenue growth industries for PR. That’s good for Castle; we started our firm with a focus on healthcare and financial services; while we’ve expanded our offerings, these industries still drive our core PR business.
Highlights from the USC report show that:
- Three-quarters of firms expect no staff size changes this year
- Staff compensation will suffer; more than 50 percent expect to freeze wages
- Digital PR and measurement/monitoring are expected to drive revenue
- Research is playing a bigger role in PR, further blurring the lines between PR’s role and that of the ad agency, marketing companies and digital firms
What’s next? I’ve always believed that audience-facing efforts should be the purview of PR — websites, digital/social engagement, media, content creation/distribution. And I think the best PR firms will consider how all these elements can work for their clients and emerge from this recession stronger and with a bigger share of marketing mind-share and budget.
*Smith Index: My economic gauge is driven in part by my “Smith Index.” John Smith (name changed to protect the freelancer!) is an area PR freelancer. I never hear from John when things are good. But when I do hear from him with the “do you have any work” e-mail, my stomach churns. John has become a leading indicator for me; when I get his note, it’s usually about six months before wider spread economic issues hit. This time I heard from him in the summer of 2008. Historically, his e-mail has been a pretty good forecast of problems to come. And he was right again. Let’s hope, for all our sakes, that John’s business improves. And John, next time, try getting in touch when business is booming.
Two-Way Street 