Inside The Beltway: Once upon a time, a sagging economy meant PR budget cuts. Welcome to the new century

Now, it used to be an article of faith in the American business community that the slightest dip or tremor in the economy - unemployment up, the markets down, inflation up, housing or auto manufacturing down - meant a corresponding cut in advertising budgets and PR spending across the board.

Now, it used to be an article of faith in the American business community that the slightest dip or tremor in the economy - unemployment up, the markets down, inflation up, housing or auto manufacturing down - meant a corresponding cut in advertising budgets and PR spending across the board.

Now, it used to be an article of faith in the American business

community that the slightest dip or tremor in the economy - unemployment

up, the markets down, inflation up, housing or auto manufacturing down -

meant a corresponding cut in advertising budgets and PR spending across

the board.



But as the new century begins (how long will it be before people refer

to the 1990s and the present decade as the ’turn of the century?’), we

are clueless, since the latest economic downturn was pre-Clinton, and

the Reagan recession is shrouded in the mists of antiquity. And with Mr.

Greenspan’s hand renewed at the tiller and companies becoming both fewer

and larger - the unimaginable dollars 350 billion merger of AOL and Time

Warner is causing barely a ripple - it begins to appear as though all

the old rules may be out the window.



But some data from the turn of the century (ah, those carefree, fin de

siecle days of the 90s) seem to suggest that the old order has changed

while we weren’t looking. Corporate executives now look on advertising

and PR as tools for more than hyping new products, increasing market

share, distracting customers from disasters or even reinforcing a

brand.



Thus a survey last year by Burson-Marsteller and this publication found

an overwhelming majority of CEOs now believes management of corporate

reputation affects stock price, previously thought to be responsive

almost entirely to old standbys like revenue, profit and the tangible

elements of the balance sheet.



Additional turn-of-the-century research by the Council of Public

Relations Firms seems to confirm this new emerging doctrine. Its polling

revealed that the Top 200 of Fortune’s ’Most Admired’ companies spent

twice as much on PR as companies with weaker reputations.



Does this mean corporate CEOs are getting smarter, or are they merely

discovering a new business (and communications) landscape? Probably

both.



The new ’Age of Communications’ has turned more of us into investors and

has also provided everyone with tons of new information with which to

judge companies, products and brands. We pass on this information to

friends, colleagues, friendly merchants and, through the Internet,

countless strangers as well.



We not only know which cars sell more, for example, but which are

better, and now there may even be a connection between these pieces of

knowledge.



The next time the markets turn bearish and the numbers head south, we

can test the new theories. Right now, it looks as though reputation and

a good name are our best stock in trade.



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.