NEW YORK: PR spending in the US will rebound from 2009 and grow at an annualized rate of 5.6% over the next four years as companies reestablish customer relationships in the wake of the recession, says an industry report.
The report from private equity firm Veronis Suhler Stevenson predicts that, by 2014, spending on PR will reach $4.4 billion, up from an estimated $3.4 billion this year.
The projection is welcome news for an industry that suffered during the recession when companies drastically reduced their marketing budgets. When taken together, PR and social media - or word-of-mouth - spending slipped 2.8% to $5 billion in 2009.
But the rate of PR and social media spending by clients is now poised to grow faster than the US' nominal GDP, the report says. Spending between 2009 and 2014 will grow at a compound annual rate of 9.7%, reaching $8 billion in 2014.
Yet the report also acknowledges the changing landscape of communications and the shift from traditional PR tactics. As more companies embrace digital social media and metrics improve, word-of-mouth spending will increase 12.8% to $1.9 billion by 2014.
"Technology has changed the game," said John Suhler, co-founder and president of Veronis Suhler Stevenson. "Social networking is the real stress test for PR."
But while PR spending will grow, it will not match the days before the recession, which produced a compound annual growth rate of 10.1% between 2004 and 2009.
Veronis Suhler Stevenson compiles the annual report using industry expertise, historical spending data and current industry trends.