According to several recent research studies and industry surveys, the economic impact of the current recession on the PR efforts of companies in the United States has been somewhat modest compared to other industries. Communication budgets may have shrunk a bit and purse strings are being watched more closely, but on average, PR firms have been holding their own. By avoiding dramatic reductions in staff, reducing payments to external agencies, and freezing or reducing salaries for internal employees, most PR firms are succeeding in meeting the challenges of the economic downturn.
Jerry Swerling, Director of USC’s Annenberg Strategic Communication and Public Relations Center (SCPRC), says that the results of a study they recently conducted are heartening for the PR industry as a whole. “While the recession has certainly hurt, and there will undoubtedly be more pain in the future, our survey respondents have experienced significant but not debilitating budget cuts,” Swerling says.
He goes on to say that wise strategic budgetary shifts by PR firms have made it possible for most companies to avoid widespread layoffs, which is a significant change from historical patterns, where difficult economic times resulted in almost total elimination of PR across all industries. Swerling suggests that the reason for the change in the current recession appears to be that the global economy thrives more than ever before on information and transparency.
Therefore, companies in all industries need to be able to communicate with customers and the public effectively, or their relationships with key audiences will quickly disappear. So although companies are more vigilant than ever about keeping an eye on their bottom line, they can’t afford to do away with PR altogether. Even when times are tough, companies need to be able to communicate efficiently and effectively with their customers and the public, and ramp up efforts to attract new customers. In a severe recession, it is no longer merely optional for companies to find cost-effective ways to engage with stakeholders—it is absolutely essential.
By recognizing this fact, PR firms can actually leverage the current economic downturn to keep their clients successful while remaining profitable themselves. It’s a win-win situation for everyone.