USC study reveals smaller PR budgets, staffs in 2003

LOS ANGELES: Shrinking budgets, smaller staffs, and diminished respect characterized 2003 for the PR industry, according to a recent study by the USC Annenberg Strategic Public Relations Center.

LOS ANGELES: Shrinking budgets, smaller staffs, and diminished respect characterized 2003 for the PR industry, according to a recent study by the USC Annenberg Strategic Public Relations Center.

In its second annual Generally Accepted Practices Study, USC researchers looked at a sample of 266 US corporations for insight into their PR operations. The study further divided respondents into corporations that appear on Fortune's Most Admired Companies list and those that do not.

The results showed a year characterized by a "bunker mentality" of limiting or cutting PR spending and initiatives.

For example, Fortune's most-admired companies showed a second year of PR budget reductions, down 5.5% over 2002. Among Fortune 500 companies in general, PR staffs shrunk by an average of 15 people. However, the most-admired Fortune 500 companies had significantly larger PR staffs, averaging 66 people, compared with 44 for those not on the list.

Those practicing in-house also said they are not valued as highly by their organizations as in the previous year. For the second year, PR ranked as the sixth most important corporate function, well below areas such as finance and marketing, and just slightly above HR. Respondents also indicated that senior management took their recommendations less seriously than in 2002 and that they had less of a role in strategic corporate planning.

On the agency side, corporate PR practitioners said their number one reason for hiring outside help was "extra arms and legs." The previous year, strategic counsel won out as the best reason to hire outside practitioners.

Despite the negative findings, the study's authors stressed that it was important to view the results in a larger context.

"The last year or two have been extraordinarily tumultuous for society in general and the PR profession in particular," said Jerry Swerling, director of the USC Strategic PR Center and lead author on the study.

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