Annenberg study shows stability in PR industry

LOS ANGELES: The PR industry saw "a more stable, healthy business environment" in 2005, according to the results of the fourth annual Generally Accepted Practices Study (GAP IV), published last week by the USC Annenberg Strategic Public Relations Center, Los Angeles.

LOS ANGELES: The PR industry saw "a more stable, healthy business environment" in 2005, according to the results of the fourth annual Generally Accepted Practices Study (GAP IV), published last week by the USC Annenberg Strategic Public Relations Center, Los Angeles.

Based on responses from almost 500 senior-level PR pros from corporations, government agencies, and nonprofits, the study is "not just an annual report of how the profession is doing," said Jerry Swerling, director of the Strategic PR Center and the study's principal investigator.

The study provides "real, tangible" data, which can be accessed to "make important management decisions," he added.

According to the study, PR budgets rose 4% in 2005. While money spent on PR amounts to less than 1.28% of ad budgets, projected growth is "encouraging." Fortune 500 companies averaged $646 spent on PR for every $1 million in gross revenue. Fortune 1,001 to 2,000 companies averaged $962 spent on PR for every $1 million in gross revenue.

The study also found that 79% of Fortune 500 companies are working with agencies, 9% fewer than in GAP III. While the overall number of organizations using agencies dropped, the average percentage of total PR budgets allocated to agencies increased 25% versus 2004.

The findings were "a double-edged sword for us," Swerling said. While "it was very reassuring to see stability in the numbers," some overly enthusiastic growth expectations set in 2004 weren't met. Still, he acknowledged, "normalization, that's important. The overall feeling is one of great optimism for the profession."

In addition, the study shows that PR is seen as most effective when it reports to the C-Suite rather than other organization levels. Swerling said PR was "more likely to get support from management, [be] taken more seriously, and communications functions were better integrated" into overall marketing plans when pros reported to a CEO, COO, or chairman directly.

While the GAP IV study itself is finished, the work is far from over: Swerling and his team are currently in the process of designing a "user-friendly data base," so PR pros can key in answers to specific questions and receive real-time information regarding budgets, salaries, and staff size, among other subjects.

If all goes as planned, Swerling said, that should be "up and running by the end of the year."

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