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
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
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
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
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