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
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
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.