INTERNATIONAL: US PR budgets set to rise by nine per cent this year

NEW YORK: Despite recent cutbacks, and in a market where caution is

the watchword, US PR budgets are set to increase by a resilient nine per

cent in 2001, according to the PRWeek US Corporate Benchmarking Survey


However, the survey results also show a marked shift in PR budget

allocation away from PR agencies. After years of dismantling, in-house

teams will see an increase in their share of PR budgets, from 49 per

cent to 60 per cent on average.

One agency chief said: 'Some companies believe in-house people can get

closer to the business and the product, and they can manage the

productivity better.'

Agency heads said the survey showed the PR industry was returning to

normality. 'Last year was phenomenal by any measure,' said

Fleishman-Hillard CEO John Graham.

'It's going to be a real opportunity for PR firms to prove their value

to corporations and clients in these difficult times.'

At Ogilvy PR, which laid off 70 people in its technology practice this

week, CEO Bob Seltzer described last year as a binge.

'We're back in the real world. Last year, business was being delivered

like chocolates on a conveyor belt. Everyone was gorging. Now, we're

back to a hunter/gatherer model, where you have to go out and look for

the business.'

Graham predicted: 'There will be a shake-out among firms who are not

providing high quality service. Smart agencies will spend less time

looking for people, and more time training the staff they've already


'The good news is that turnover is down,' added Seltzer, 'which will

allow us to do this.'

Ironically, in the technology sector - which has been hardest hit by the

current slowdown - PR budgets will actually rise the most, by 14 per

cent, although this sector records the highest cuts in budget.

And the survey sample cannot account for the loss of income from clients

who have gone out of business.

Published this week, the survey polled 1,405 corporate and non-profit

clients with PR budgets ranging from pounds 14,000 to pounds 35m.

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