Will PR Spending Rebound in 2010?

The majority of PR agencies saw revenues decline in 2009, according to a recent PRWeek article based on a year-end survey of PR agencies conducted by StevensGouldPincus. The survey polled 157 agencies and found 63.7 percent reported revenue declines from the prior year. While this data may come as no surprise to those following the economy lately, the survey also found that 23 percent of firms achieved higher revenues in 2008 – and 13.4 percent reported no change in profitability. Most of the firms reported average client and staff turnover rates – and most expect 2010 to be a much better year for business.

What’s Driving Optimism at PR Firms?

In light of most firms reporting a down year for 2009, why are most firms optimistic about 2010? Perhaps this recent Economist article can shed some light on the subject. Despite the downturn in the public relations industry from a revenue perspective, all signs point to increased corporate demand for PR. PR is now a major force behind business decisions for most organizations. According to data from Veronis Suhler Stevenson (VSS), a private equity firm, PR spending in America grew by more than 4% in 2008 and nearly 3% in 2009 to $3.7 billion. Services like word-of-mouth marketing, driven by increased use of blogger outreach and social media marketing, are fueling demand for PR services. Spending on these areas increased by more than 10% in 2009.

While there are still plenty of firms out there that have yet to capitalize on this increased spending, it’s hard to find an agency these days that isn’t at least dabbling in social media marketing.

What About the Economy?

Despite poor economic conditions the past couple of years, most PR agencies remain optimistic about prospects for a bigger 2010. For the obvious reasons, PR remains a good business to be in. PR has always appeared more cost-effective than traditional advertising, so firms often benefit from economic downturns when advertising agencies experience deeper losses. This time around, things are a little different. While PR has been an alternative to traditional advertising in the past, many PR firms are starting to offer true alternatives to advertising – and in some cases, are offering very similar services. Many PR agencies are now integrating traditional advertising and interactive marketing services with its suite of PR offerings. Even as we begin to see improvements in the economy, PR firms remain better positioned to capitalize on increased marketing spending than traditional advertising agencies.

Changing Media Environment

As traditional media outlets continue to cut staff resources, and new alternative media formats spring up, the role of PR has increased in importance. Most organizations rely on PR firms to keep up with all the changes in the media, to help them remain top-of-mind with their key constituents. PR software alone cannot solve this problem for most organizations. The rise of social media influence has only further increased the need for sophisticated PR support, capable of managing media relationships across a far wider range of outlets than ever before – from traditional media outlets to the individual Twitter user with thousands of followers and equal or greater influence over audiences.

Make Your Own Media

Parallel to these trends is the increased usage of social media by organizations looking to create their own media. Most obvious are organization blogs and social media outlets. Few agencies are better equipped to help organizations develop and manage content rich blogs and social media accounts than traditional public relations agencies. While strategies and tactics for reaching audiences have changed dramatically, the core fundamentals mastered by professional public relations practitioners are unmatched by other types of agencies. Social media is a natural extension of the public relations service offering, and most firms will continue to see a boost in this type of engagement in 2010.

According to VSS, spending on PR in America will surpass $8 billion by 2013, with much of the growth coming from online projects such as social media and corporate blogging initiatives. Organizations that are able to build large, loyal audiences through their own blogs and other social media will find they can build more sustainable relationships – and influence messaging faster – than using traditional media alone. These outlets enable organizations to interact and communicate with audiences faster, and to even attract more media attention than they were able to with press releases and focused pitching in the past.

What to Look for in 2010

Despite what you may read about how bad 2009 was from a revenue standpoint, expect things to rebound strong in 2010. There is far greater demand for PR services than there has been in the previous decade. Firms who are able to best adapt to the changing media landscape, and best able to help clients harness the power of social media, will greatly benefit from larger engagements from clients looking to transform the ways they communicate with all audiences.

What do you think? Will 2010 be a boom or bust for PR agencies? Are you seeing increased demand for these services in your agency? What did we miss?

(Image Credit: Hundreds of Dollars Money by Photos8.com)

About Jeremy Porter 214 Articles
Jeremy Porter has been passionate about the intersection of public relations and journalism since studying both Public Relations and Journalism at Utica College of Syracuse University in the late 90s. Porter launched Journalistics in 2009 to share his ideas and insights around both professions and how trends and developments in modern day marketing, communications, and technology impact those working in these fields. Porter also values the traditions and history of both professions and regularly shares his perspective in these areas - and related topics geared toward the next generation of journalism and public relations professionals.


  1. Great post as always. We were fortunate to come through 2009 in good shape, and we’re already seeing an increase in demand, as well as continuing expansion of client services as we take on more and more social media work for clients. As you stated so well, PR is a natural home for communications across social media channels. I believe separating the two (and using separate agencies for each) also potentially costs the client more money, as streamlining efforts via one agency decreases agency coordination needs, as well as ensuring consistent (and on-target) messaging, single source measurement, maximizes contact with traditional media contacts online, and more.

  2. Amen! Our firm has moved aggressively into social media work, and it now accounts for about 70% of our revenue. And you’re right about PR firms being the right resource. We’ve always known how to engage and educate audiences. Now increasingly we need to entertain them as well via social media.

  3. Coming from a corporate communications point of view, we’ve seen our marketing budgets decrease, making public relations and social media more important going forward. However, we are relying more in-house for our PR and social media needs instead of going to an agency. I am wondering if anybody is seeing this trend (i.e. hiring a PR/socmed pro instead of outsourcing work?) In any case, PR vs advertising will definitely be a focus in the year to come, especially in digital communications.

  4. PR firms are incredibly well positioned to grow in the manner in which you speak, as long as they approach their discipline as an integrated piece of marketing, not as a separate activity. What we do is increasingly more important, but as long as we operate in a “ghetto” away from CCOs and CMOs, we will continue to be marginalized in the future. We need to let the ideas win the day, educate people about earned media, tighten up our measurement protocols and “play well with others.”

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