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The New York Times’ Half-Empty Report on Health of PR Industry

May 8 update: A letter to the editor was sent to the New York Times to present facts that counter the article’s premise.

Writing for Sunday’s (May 3, 2009) New York Times, Eric Pfanner reports (a bit too gleefully, it seems) that the public relations industry is suffering in the current economic slowdown. As evidence, he cites financial reports showing a decline in public relations revenue at major communications holding companies WPP, Omnicom and Publicis.

The extent of the revenue drops at those companies are consistent with industry findings put forward by the respected USC Annenberg Strategic Communication and Public Relations Center (SCPRC). In January, the SCPRC surveyed nearly 200 senior level public relations and corporate communication professionals at U.S. corporations, non-profits and government agencies; it found that organizations have reduced their public relations spending 3.9 percent relative to their planned 2009 budgets, after starting the year already having pared such spending by 7.4 percent when compared with 2008 expenditure levels.

Putting the data in context, however, the SCPRC says damage to the public relations profession as a result of the recession is “relatively modest.”

“Overall, the news appears to be somewhat heartening for the profession,” says Jerry Swerling, director of the SCPRC.

Hardly the “downward spiral” that Pfanner breathily espouses.

The SCPRC also notes that the current budget-cutting trend breaks from historical industry patterns, and sometimes in significant ways.  For example, previous periods of economic decline spurred profound budget cuts, and in some cases the virtual elimination of public relations and communications programs. Against such a backdrop, an 11 percent drop in revenue doesn’t seem quite so spiral-like.

Our industry is also better positioned than ever before to shake off the effects of a recessive economy and seize market share from other communication and marketing disciplines.

The explosion of consumer engagement through new and social media means it’s more important than ever before to continue communicating, lest positive relationships turn negative and die. And for public relations practitioners, digital and social media are just the latest in a long line of tools: It’s not about the technology, it’s about how professional communicators use the technology to engage and interact with important stakeholders.

Additionally, the changing media landscape puts consumers in control, and public relations is accustomed to operating in an environment in which others have the control. Plus, public relations is unique in its ability to keep pace with and react to the rapid flow of information today.

Public relations is also closer to the perspectives, needs, objectives and concerns of the CEO than any other communications or marketing discipline. Public relations sees “the whole corporate picture” as it relates to issues that CEOs worry about, and its practitioners are trained to engage all key stakeholders — internal and external “clients,” public policymakers, key influencers, regulators and investors among them.

Finally, with financial institutions and automotive manufacturers struggling to survive, there are any number of opportunities for public relations professionals to help rebuild reputations and restore institutional trust. The Federal Reserve has said that as much as 47 percent of American companies’ net worth is tied up in intangible assets like brand equity and reputation, and public relations professionals are the keepers of these assets.

In fairness, Pfanner does seem to get some of this, citing “durable” changes in consumer attitudes and media technology that have fueled prior industry growth and are likely to do so again. By the end of his story, he’s even talked himself into the idea that the public relations business seems well-positioned for a recovery.

“For a business built on the notion that the glass is always half full, every setback creates opportunities, including the economic kind,” says Pfanner.

Too bad his story, like much of what we read in the media today, was built on the notion that the glass is half empty. I’ll take a full dose of reality every time.

Michael Cherenson, APR, is Chair and CEO of PRSA.

2 Comments

  • It’s so funny they report that – PR is ans should be the lifeblood of the new hot medium – social media. In my opinion – only true marketers and Public Relations experts can and have been capitalizing on Twitter and Facebook – seems the NYT is buying into the whole guru in their slippers movement. I can profess to be Jesus – doesn’t make me a savior. Real PR firms and marketers are still being hired, they are still making money and companies still need their services – perhaps more now than ever.

    Very well said here – I think all you are really seeing is a shift in budgets from the online to the offline – the costs are lower for the engagement but the fees to the PR firms remain steady – just their expenditures changed.

  • I have to agree, public relations is the cornerstone of branding, and reputation is everything. Although public relations spending may have gone down some as a result of the slowdown, I don’t think it is unique to our industry. In fact, spending has gone done everywhere.

    At the same time, there are innovative companies that are doing the opposite. They are spending more on their public relations and branding, hoping to capitalize on the economic situation. It just depends where you look.

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