Dorothy Crenshaw January 18, 2010 | 08:33:23

What PR Boom? Why The Recession Hasn’t Helped Public Relations

Like  my peers, I was interested to read the latest article about our industry in The Economist. Titled “Good News,” the piece posits that PR has profited during the recession, since so many companies have suffered business and reputation declines. It cites the latest Veronis Suhler Stevenson data indicating a 3% growth for the PR business in 2009, although the gains have come amid layoffs and declining budgets for many firms.

Good news for PR? I don’t think so. The recession may have underscored the need for a long-term, strategic approach to reputation management. But, I seriously doubt that it’s been good for PR firms. I don’t know enough about Veronis’s methodology to challenge its numbers, but nearly everyone I know in the business has experienced layoffs, compensation freezes, or furloughed salaries in the past year.
My straw poll is more in line with the 2009 survey by StevensGouldPincus that’s also mentioned in the piece. It reports a revenue slide for nearly 64% of participating PR firms. (Happily, my own firm exceeded its revenue targets for 2009, but as a newly branded spinoff of a larger company, we’re an anomaly.)

In fact, the very example cited as evidence of the industry’s strength is ironic. It’s the Domino’s Pizza YouTube incident, by now well-known both in and outside of the industry and held up by many (including yours truly) as a fine example of crisis response and use of social media. Yet Domino’s didn’t use a PR firm to manage fallout from the rogue employee video that nearly took down its brand. Its response was led by the internal communications group and ad agency partner Crispin Porter Bogusky.

To me, that’s a reminder that, in many cases, PR firms still aren’t the chief social media gatekeepers and strategists, although we’re well-suited to the task.

But, let’s not quibble about one example. What really bothers me about The Economist article is the implication about the respect factor. It quotes a large-agency exec who touts PR as “the organising principle” of business decisions. Yet, it presents public relations as a band-aid for corporate misbehavior or poor or sloppy business practices.

I’ve no doubt that the reputation battering experienced by many companies has made PR more top-of-mind. But, in cases where the wounds were self-inflicted,  I can’t help but wonder where the PR counsel was when things went wrong in the first place. Was corporate communications a dissenting voice when Goldman Sachs advised clients to buy mortgage-backed securities, while lightening up on them for its own investment purposes? Was a reputation officer at the table when the Big Three auto companies planned their remarks and (private jet) trips to D.C. for the government bailout hearings…let alone along the road that led them there?

I don’t know, but I doubt it. The “quick-fix” characterization of PR makes me cringe, because it’s anything but a band-aid. It brings to mind Bill Sledzik’s 2007 post about our professional responsibility to say no when the party line goes against corporate or societal values. (If you haven’t read it, please stop and do so here.)

PR isn’t a magic bullet for an economic crisis. But, I’ll think we’ve come into our own when organizations of all stripes make PR a fundamental part of business planning, and when communicators are free to express an independent or contrarian view at the corporate table where we so badly crave a seat. Until then, it’s nice to have the reputation lift for our industry, but it feels a little like…well, just another PR piece.

7 thoughts on “What PR Boom? Why The Recession Hasn’t Helped Public Relations

  1. At the PRSA International Conference someone made the comment that “Down 10% is the new up 10%,” suggesting that a modest decrease in ’09 was as good as a modest increase in revenues in a normal year (okay, probably didn’t need to explain that). So it is interesting that some in our industry insist on suggesting that the billings continued to be strong. Like your firm, ours did hit our growth target last year — and it WAS primarily due to helping organizations that faced reputational challenges. But the bedrock of any good year is the long-term client relationships and trusted counseling role we have with our CEO clients.

    1. Yes, many of my colleagues were saying that “flat is the new up” and it seemed appropriate. Whether the industry was truly up for ’09 or not, it impresses me that much of your work was on behalf of companies with reputation challenges, presumably caused or worsened by the downturn. Thanks for the comment.

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