WASHINGTON: Spending on PR will increase by 8% in the next four years, continuing a trend that has already seen it rise more than 11% since 1998, according to a new media study.
Spending on communications overall - including ads, PR, marketing, media, and event planning - increased 4.6% to $648.3 billion last year, according to the Communications Industry Forecast, an annual report by merchant bank Veronis Suhler Stevenson. Ad spending rose by just 3.2% in that period, less than PR growth (4%).
Jim Rutherfurd, VP and managing director at the bank, credits the rise in PR spending to an increased desire among marketers to target more specific demographics.
"There seems to be a trend that marketers want more and more targeted efforts," he said. "Arguably, there are aspects of PR that can be far more targeted for a specific product launch, for example, than maybe in general-interest advertising."
Other factors Rutherfurd cited as contributing to PR's rise are an increased desire for measurement and a down economy that makes cost-effective PR more attractive than pricey ads.
The report predicts PR growth through 2008 to proceed at a far greater rate than any other communications practice aside from event planning, which is predicted to grow by 8.9%. The other fastest growing practices are b-to-b promotion at 6.8% and direct mail at 5.5%.
The study also found that revenues for publicly reported communications companies rose in the past five years. Adjusted total revenues went up 9.7% to $361.2 billion last year and grew at a compound annual rate of 9.3% from 1999 to 2003.