Industry defiant as WPP results reflect downturn

The PR industry is refuting claims that advertising is

outperforming PR in the economic slowdown, following WPP's results last

week that showed a dramatic drop in PR figures.

Both the PRCA and the IPR have hit back at suggestions that PR has been

worse hit than advertising, saying the industry is performing well

despite the slump.

WPP's figures, published last week on PRWeek Worldwire, showed PR and

public affairs has been most affected by the slowdown.

Contrary to previous industry figures, WPP said advertising had showed

signs of surprisingly high growth, contributing to an overall group

pre-tax profit of £247.6m for the six months to 30 June.

Compared to advertising, which grew like-for-like revenues by 5.9 per

cent, WPP's PR and PA sector saw like-for-like revenues fall by three

per cent.

According to a WPP spokesman, PR has come out badly in the results due

to the slump in the technology, telecom and media sectors.

WPP chief executive Sir Martin Sorrell was reported last week as saying

the situation would get tougher before improvements are seen in the PR

market.

But IPR president Ian Wright said PR is resilient to the market changes:

'WPP results have a time-lag as they reflect the need to move away from

over-exposure to technology clients. Elsewhere the evidence is that good

ideas will be rewarded with serious expenditure. PR practitioners have

to keep their nerve and offer innovative communications solutions.'

PRCA director general Chris McDowall backed this, adding: 'We stand in

real danger of talking ourselves into a recession. PR is not doing worse

than advertising. Yes, PR budgets have been cut but not as much as

advertising.'

Industry analysts have, however, confirmed fears in the PR industry that

the market may not recover to the highs of the last two years.

Media analyst Alex de Groote of Credit Agricole Indosuez Cheuvreux said:

'Although advertising has been very weak, globally PR is the industry

that is suffering the most. I don't think we'll see a recovery to 1999

or 2000 levels for quite a while - if ever.'

Incepta Group is soon to release its six-month results to 31 August,

which are expected to report pre-tax profits in line with current

expectations.

The group, which owns the Citigate PR brands, said its US technology PR

business continues to operate in a weak market and that its financial

and corporate advertising businesses have seen delays and budget cuts on

certain projects.

Leader, p10.