PR, word-of-mouth spending to outpace TV advertising

NEW YORK: PR and word-of-mouth marketing spending will grow 14.6% this year due to an improving economy and the changing nature of the industry, according to a study from investment firm Veronis Suhler Stevenson.

NEW YORK: PR and word-of-mouth marketing spending will grow 14.6% this year due to an improving economy and the changing nature of the industry, according to a study from investment firm Veronis Suhler Stevenson.

Total communications spending, including advertising, marketing, and communications, increased 4.2% in 2011. It is expected to grow 5.6% this year, outpacing GDP growth of 4.4%, according to the study. The company predicted total communications spending will grow 31%, or by $343 billion, to $1.4 trillion by 2015.

The industry segment with the highest expected spending growth this year is pure-play consumer Internet and mobile services at 18.1%. PR and word-of-mouth marketing were next, followed by broadcast TV ad spending (9.3%), subscription TV (7.7%), and branded entertainment (7.5%), according to the study.

“Social media and digital media enable a company to deal with their communities easily, frequently, and in a manner that doesn't seem like marketing,” said John Suhler, president and co-founder of Veronis Suhler Stevenson. “PR and word-of-mouth marketing now are very much in tune with the marketing and branding of corporate identity in a manner that is far beyond sending press releases.”

Only three marketing segments were downgraded in the firm's mid-term update, compared with the most recent VSS Communications Industry Forecast: consumer book publishing, newspaper publishing, and local consumer directories.

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