NEW YORK: PR is set to be one of the fastest-growing sectors in the entire media and communications industry over the next five years, according to the new edition of the annual Communications Industry Forecast by the private equity firm Veronis Suhler Stevenson (VSS).The report forecasts an annual growth rate of 10% to 15% for PR in that time period, putting it in the upper echelon of growth, along with pure-play Internet and mobile services, branded entertainment, out-of-home media, and outsourced custom publishing.
The VSS forecast predicts solid growth for the entire communications industry over the next five years, although major shifts will take place as advertising and marketing dollars move to less traditional venues.
Total spending on communications grew nearly 7% to $885 billion in 2006, marking about a 6% overall growth rate in the industry since 2001.
For the next five years, VSS predicts the communications industry will maintain its growth annually at 6.7%.
In 2008, spending on the industry is expected to top $1 trillion for the first time. By 2011, total spending will reach $1.22 trillion, according to the report.
And in perhaps the most notable shift, VSS says that the Web will surpass newspapers as the largest ad medium by 2011. Internet ad spending is predicted to reach nearly $62 billion that year.
Marketing services was the largest overall sector of the communications industry, growing 6.6% last year to $254 billion in spending. And while PR is predicted to expand in double-digit annual leaps, advertising was the slowest-growing sector in the industry last year, posting a 4.5% growth rate.
Spending on "alternative" advertising, however, such as Internet, mobile, and video game ads, grew a whopping 36.6% in 2006, to $26.5 billion. That helped to buoy the category, as "traditional" advertising grew just $2.4%.