A number of economic indicators, along with President Obama’s op-ed in The Wall Street Journal last week, point to a recovering economy. Noting that the Dow Jones Industrial Average has passed its July 2008 high, President Obama said he’s making an all-out effort to reduce the number of regulatory hurdles for businesses, large and small, to grow and prosper; optimism on a number of economic fronts appears to be increasing. But how is this recovery translating to the public relations business?
The View from Charlotte
Earlier this month, the PRSA Charlotte Chapter was one of nine local professional organizations hosting the annual “Charlotte Marketing Forecast: Surviving and Thriving in 2011″ (summaries of the event can be found here and here). This event has become an annual opportunity to take the temperature in the local public relations, advertising and marketing community and do some “crystal ball gazing.”
The program started with the moderator asking the audience who felt that we’re out of the recession. Only a dozen or so persons raised their hands. Most thought Charlotte was still in a recession. One agency owner was asked if people were starting to spend more. He said businesses were just starting to spend more than they did two years ago. He also said agencies were being held more accountable and there had been a lot of belt-tightening.
A quick review of key economic indicators (unemployment rate, economic development announcements, etc.) showed Charlotte doing better than most cities, but the show of hands at this gathering was telling. In Charlotte, larger agencies have survived and even thrived during the downturn, but several smaller agencies have gone out of business, and many public relations professionals who used to work in an agency setting have become solo practitioners.
Media: TV and Print Spending Trend Down
Advertising Age noted last week that, “This year isn’t likely to be as pleasant as the last — though it won’t be a return to the harsh recession-tinged downturns. With the elections over, 2011 will likely see a 7.9% drop in local-TV revenue, according to a forecast from media consultant BIA/Kelsey.”
According to a May 2010 article in MediaPost, “print revenues have dropped sharply in the past five years. While the report suggests stabilization in print revenue in 2011, the long-term forecasts are grim . . . tantamount to simple collapse — although many years may pass before their actual extinction. . . . The sustained declines leave no doubt about the general trend … total newspaper ad revenues plummeting from $47.4 billion in 2005 to $18.8 billion in 2015 — a 60 percent drop in 10 years.”
So where will those media dollars go?
Is Public Relations Spending on the Rise?
In talking with PRSA friends around the country, prevailing opinions had public relations spending on the rise and competing on a more favorable footing with other marketing tactics for those precious client budgets. More clients seemed to be seeking the credibility delivered by third party endorsement in media articles driven by effective public relations strategies.
At our agency, Luquire George Andrews (LGA), we take pride in our integrated marketing expertise and have strived to make “media neutral” recommendations that best serve our clients’ business objectives. Our agency has recommended moving dollars once assigned to advertising programs and media buys to more robust public relations and social media initiatives. The rise of social media has demanded increasingly nimble communications and public relations practitioners who are ideally suited to navigate this ever-changing dynamic.
Reflecting the New Normal
Are we seeing increased optimism from clients and the agency business as a whole, or are there still some broad concerns for the year ahead?
In certain markets — health care and energy sectors come to mind — 2011 client budgets appear to be on the uptick, so a sense of optimism is beginning to take hold. Other market segments — construction and real estate, for example — are still suffering due to tight credit and lingering uncertainty in the financial services industry. Public relations initiatives, especially those with a social media component, should continue to claim a larger share of overall marketing budgets as the recovery continues.
I would say a sense of “cautious optimism” is reflecting the new normal in our still recovering economy. That’s the view from Charlotte. What do you see in your community?
Philip Tate, APR, serves as treasurer on the PRSA Board of Directors and is senior vice president at Luquire George Andrews (LGA) in Charlotte, N.C.